Richard Stevens, et al. v. GlobeTel Communications

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Richard Stevens, et al. v. GlobeTel Communications Powered By Docstoc
					                                               UNITED STATES DISTRICT COURT
                                               SOUTHERN DISTRICT OF FLORIDA
                                                       MIAMI DIVISION
                                       CASE NO. 06-CIV-21071-ALTONAGA/Tumoff


RICHARD STEVENS, on behalf of himself
and all others similarly situated,

                                 Plaintiffs,


GLOBETEL COMMUNICATIONS CORP.,
et al.,

                                 Defendants.

                                        NOTICE OF CLASS ACTION SETTLEMENT
TO:   ALL PERSONS AND ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED COMMON STOCK ISSUED
      BY GLOBETEL COMMUNICATIONS CORP. ("GLOBETEL") DURING THE PERIOD FROM DECEMBER 30, 2005
      THROUGH AND INCLUDING AUGUST 24, 2006.
        YOU ARE HEREBY NOTIFIED that a Settlement Hearing will be held on February 4, 2008, at 9:00 a.m., before the
Honorable Cecilia M. Altonaga, United States District Judge, at the United States Courthouse, 301 North Miami Avenue
(4'h floor), Miami, FL 33128. The purpose of the Settlement Hearing is to determine, among other things: (a) whether the
Settlement should be approved as fair, reasonable and adequate; (b) whether the proposed plan for distributing the
proceeds of the Settlement (the "Plan of Allocation") is fair, reasonable and adequate; (c) whether the Action should be
dismissed on the merits with prejudice; (d) whether the release by the plaintiffs in the Class Action and the members of
the Class who do not request exclusion therefrom of the Released Parties should be approved; and, (e) whether the
application of the Lead Plaintiffs' Counsel for an award of attorneys' fees, costs and expenses should be approved. The
Court may adjourn or continue the Settlement Hearing without further notice to the Class.
                               YOUR RIGHTS MAY BE AFFECTED BY THIS LITIGATION.
                                        PLEASE READ THIS NOTICE CAREFULLY.
  TO CLAIM YOUR SHARE OF THE SETTLEMENT PROCEEDS, YOU MUST SUBMIT A VALID PROOF OF CLAIM
                         FORM POSTMARKED ON OR BEFORE MAY 5, 2008.
       For further information about this Action, this Notice or to obtain   a copy of the Stipulation and Agreement of
Settlement, dated October 26, 2007 (the "Settlement Agreement"), you         may contact Lead Plaintiffs' Counsel at the
following address and telephone number: Lee S. Shalov, Esq., or Thomas       G. Ciarlone, Jr., Esq., Shalov Stone Bonner &
Rocco LLP, 485 Seventh Avenue, Suite 1000, New York, New York 10018,         (212) 239-4340.
      CERTAIN DEFINITIONS
       Many of the defined terms used in this Notice are set forth in quotation marks and/or parentheses in the body of this
Notice. The following defined terms are also used in this Notice:
       "Class" means all Persons who purchased or otherwise acquired GlobeTel common stock during the Class Period.
The following Persons are excluded from the Class: Defendants, members of the immediate family (parents, spouses,
siblings and children) of any individual Defendant, any subsidiary or affiliate of GlobeTel, and the directors and executive
officers of GlobeTel or its subsidiaries and affiliates, or any entity in which any Defendant has a controlling interest, and
the legal representatives, heirs, successors and assigns of any excluded person.
      "Class Escrow Account" means an interest-bearing escrow account which shall be maintained until the Effective
Date under the control of the Insurer, and which, within three (3) business days after the Effective Date, shall be released
to Lead Plaintiffs' Counsel.
      "Class Period" means the period of time from December 30, 2005 through and including August 24, 2006.
      "D&O Policy" means Admiral Insurance Company Directors and Officers Liability Insurance Policy Number
1654351/1, which was issued to GlobeTel.
      "Defendants' Counsel" means Goodwin Procter LLP and Gunster, Yoakley & Stewart P.A. and their predecessors
and successors-in-interest.
     The "Effective Date" means the date on which the Settlement contemplated by the Settlement Agreement shall
become "Effective," and shall be the date when all the following shall have occurred:
        (a) the Preliminary Order has been entered in all material respects in the form attached as Exhibit A to the
Settlement Agreement;
        (b) the Court has approved the settlement of the Class Action, following notice to the Class and a hearing, as
prescribed by Rule 23 of the Federal Rules of Civil Procedure; and
        (c) the Final Judgment Order, in all material respects in the form attached as Exhibit C to the Settlement
Agreement, has been entered by the Court and has become Final, or, in the event that the Court enters an order and final
judgment in a form other than that provided above for the Class Action ("Class Action Alternative Judgment") and neither
the Lead Plaintiffs' Counsel nor the Defendants' Counsel elect to terminate this settlement of the Class Action, the date
that such Class Action Alternative Judgment becomes Final.

      "Exchange Act" is the Securities Exchange Act of 1934, the federal securities statute that the Class Plaintiffs allege
the Defendants violated.
       "Final" means that with respect to any court order, including but not limited to the Final Judgment Order, that such
order represents a final and binding determination of all issues within its scope and is not subject to further review on
appeal or otherwise. Without limitation, an order (including the Final Judgment Order) becomes "Final" when: (a) the
date as of which the time to seek review, alteration, amendment or appeal of the Court's order has expired without any
review, alteration, amendment or appeal having been sought or taken, including if applicable, any three (3) day period for
service by mail under Federal Rule of Civil Procedure 6(a) and (e), which time shall, for purposes hereof, be deemed to
be 33 days after entry of an order; or (b) if a motion or other application for review, alteration, amendment or appeal is
filed, sought or taken, the date as of which such request for review, alteration, amendment or appeal shall have been
finally determined in such a manner as to affirm the Court's original order in its entirety and the time, if any, for
commencing any further appeal has expired. For purposes of this definition, an "appeal" includes appeals as of right,
discretionary appeals, interlocutory appeals, proceedings involving writs of certiorari, mandamus, or prohibition, and any
other proceedings of like kind. Any appeal or other proceedings pertaining to any order adopting or approving a plan of
allocation or to any order issued in respect of any application by Class Plaintiffs' Counsel for attorneys' fees and/or
expenses, shall not in any way delay or preclude the Final Judgment Order from becoming Final.
       "Final Judgment Order" means the Court's order of judgment and dismissal with prejudice approving the settlement
of the Class Action, which is substantially in the form attached to the Settlement Agreement as Exhibit C.
      "Insurer" means GlobeTel's directors and officers' insurance policy carrier, Admiral Insurance Company.
       "Lead Plaintiffs' Counsel" means Shalov Stone Bonner & Rocco LLP, and its predecessors and successors -in-
interest, and Sarraf Gentile LLP, and its predecessors and successors-in-interest.
       "Person" means an individual, corporation, limited or general partnership, association, trust, joint venture, or any
other entity or organization, including a governmental or political subdivision or an agent or instrumentality thereof, and
their heirs, executors, successors and assigns.
       "Released Parties" means GlobeTel Communications Corp. and Timothy Huff, and any of its, his or their current,
former or future subsidiaries, parents, divisions, affiliates, acquirers, officers, directors, shareholders, members, joint
venturers, investors, underwriters, auditors, accountants, agents, servants, attorneys, investment advisors, employees,
insurers, heirs, executors, representatives, predecessors, successors, assigns, trusts, and any Person, firm, trust,
corporation, officer, director, or other individual or entity in which any Defendant has a controlling interest or which is
related or affiliated with any of the Defendants, and the respective legal representatives, heirs, executors, administrators,
predecessors, successors in interest, and/or assigns of any of them.
        "Settled Claims" means any and all claims, debts, demands, rights or causes of action or liabilities whatsoever
(including but not limited to, any claims for damages, interest, attorneys' fees, expert or consulting fees, and any other
costs, expenses or liability whatsoever), whether based on federal, state, local, statutory or common law or any other law,
rule or regulation (whether foreign or domestic), including both known claims and Unknown Claims, accrued claims and
unaccrued claims, foreseen claims and unforeseen claims, matured claims and not matured claims, (i) that have been
asserted in this Class Action by the Class Members or any of them against any of the Released parties, or (ii) that could
have been, or could in the future be, asserted in any forum by the Class Members or any of them against any of the
Released Parties which arise out of or relate in any way to the allegations, transactions, conduct, facts, matters or
occurrences, representations or omissions involved, set forth, referred to or that could have been asserted in the Class
Action and relate to the purchase, transfer, acquisition, holding, or sale of GlobeTel common stock, except claims relating
to the enforcement of the Settlement or Settlement Agreement. With respect to the above, it is the intention of the Lead
Plaintiffs, on behalf of themselves and all other Class Plaintiffs and Class Members to expressly waive and relinquish, to
the fullest extent permitted by law: (a) the provisions, rights, and benefits of Section 1542 of the California Civil Code,
which provides that: "A general release does not extend to claims which the creditor does not know or suspect to exist in
his favor at the time of executing the release, which if known by him must have materially affected his settlement with the
debtor"; and (b) the provisions, right and benefits of any similar statute or common law of any other jurisdiction that may
be, or may be asserted to be, applicable.


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      "Settling Class Member" means each and every Person who is a member of the Class who does not request to be
excluded from the Class pursuant to a proper and timely written request for exclusion postmarked on or before the date to
be set by the Court, and submitted according to the requirements set forth in the Preliminary Order and the Notice.
       "Settling Plaintiffs" means all Class Plaintiffs, and Settling Class Members.
       "Unknown Claims" means any and all Settled Claims which any Lead Plaintiff or Class Member does not know or
suspect to exist in his, her or its favor at the time of the release of the Released Parties, and any Settled Defendants'
Claims which any Defendant does not know or suspect to exist in his, her or its favor, which if known by him, her or it
might have affected his, her or its decision(s) with respect to the Settlement. With respect to any and all such Unknown
Claims the Parties stipulate and agree that upon the Effective Date, the Lead Plaintiffs and Defendants shall expressly,
and each Class Member and Released Party shall be deemed to have, and by operation of the Final Judgment Order
shall have, expressly waived any and all provisions, rights and benefits conferred by Cal. Civ. Code § 1542, or by any law
of any state or territory of the United States, or principle of common law, which is similar, comparable, or equivalent to
Cal. Civ. Code § 1542, which provides:
                  A general release does not extend to claims which the creditor does not know or suspect to exist
         in his favor at the time of executing the release, which if known by him must have materially affected his
         settlement with the debtor.
       SUMMARY OF THE SETTLEMENT
       The Lead Plaintiffs, purchasers of GlobeTel common stock during the Class Period, have agreed to the Settlement
of this Action for two million three hundred thousand dollars ($2,300,000.00), before any award of attorneys' fees and
expenses. As part of this Settlement, the Class Members will release the Defendants and others (the "Released Parties,"
as defined above) from liability. This Notice is not an expression of any opinion by the Court about the fairness of the
Settlement or about the merits of any of the claims or defenses asserted by the Lead Plaintiffs or Defendants (collectively,
the "Parties"). Those who purchased or otherwise acquired during the Class Period any common stock publicly issued by
GlobeTel are Class Members unless they are members of any excluded group defined by the Class.
       If the Settlement is approved by the Court, Class Members who submit a valid and timely Proof of Claim will receive
a pro rata share of the Gross Settlement Fund, minus court-approved fees, costs and expenses, pursuant to the Court-
approved Plan of Allocation. Lead Plaintiffs' Counsel will also apply to the Court for attorneys' fees of no greater than
thirty percent (30%) of the Gross Class Settlement Fund, for the reimbursement of their out-of-pocket expenses in an
amount not to exceed $250,000, and payments and/or expense reimbursements to the Lead Plaintiffs in connection with
the prosecution of this Class Action. Under no circumstances will you or any other Class Member be personally liable for
any attorneys' fees or expenses awarded to the Lead Plaintiffs' Counsel.
Ill.   BACKGROUND OF THE CLASS ACTION
       A. The Commencement Of The Class Action And The Naming Of Lead Plaintiffs And Lead
          Plaintiffs Counsel
       Beginning in April of 2006, investors commenced a number of putative class actions against GlobeTel and certain of
its former officers and directors (including Timothy Huff). By Order, dated August 3, 2006, the Court consolidated those
actions under the caption set forth above and named: Richard Stevens, Dion Cozamanis, Mike Newman, Ahmed
Lawahmeh and Peter Ward as lead plaintiffs for the Class; the law firms of Shalov Stone Bonner & Rocco LLP and Sarraf
Gentile LLP as Lead Plaintiffs' Counsel, and the law firm of Vianale & Vianale LLP as liaison counsel for the Class.
      The Class Plaintiffs subsequently filed a consolidated amended complaint and, thereafter, a corrected consolidated
amended complaint (the "Complaint"). The Complaint alleged violations of § 10(b) of the Exchange Act, Rule 10b-5
promulgated thereunder, and Section 20(a) of the Exchange Act. Among other things, the Lead Plaintiffs alleged that the
Defendants engaged in a fraud to artificially inflate the price of GlobeTel's common stock by misrepresenting the
existence and status of a purported transaction entered into by GlobeTel during the Class Period.
       B. The Defendants Motions To Dismiss
      On December 20, 2006, the defendants named in that complaint moved to dismiss this Action. In their motions to
dismiss , the defendants argued , among other things, that the Lead Plaintiffs had failed to adequately allege that the
defendants made any materially false statements or adequately allege that the defendants acted with intent to defraud.
On April 4, 2007, the Court granted the Motions to Dismiss as to defendants Lawrence Lynch, J. Randolph Dumas,
Thomas Y. Jimenez , Michael P . Castellano , Dorian Klein , Jonathan Leinwand, Mitchell Siegel and Kyle McMahan, but
denied the Motions to Dismiss as to Defendants GlobeTel and Timothy Huff.
       C. The Mediation
      On June 11 , 2007, the Lead Plaintiffs and the remaining Defendants informed the Court that they had agreed to
attempt to resolve their dispute through formal mediation proceedings . Thus, by Order entered dated June 12, 2007, the
Court stayed the litigation . On August 23, 2007 , before the Honorable Nicolas H . Politan , a retired United States District
Judge , the Class Plaintiffs and the Defendants mediated the issues in dispute in the Class Action through their respective
counsel and reached a negotiated resolution of the case . As described more fully below , the Class Plaintiffs and

                                                               3
Defendants agreed in principle to settle the Class Action for the sum of two million three hundred thousand
dollars ($2,300,000.00).
IV.   THE TERMS OF THE SETTLEMENT
      A. The Settlement Consideration
       In full settlement and compromise of all Settled Claims against the Released Parties by the Class Plaintiffs and the
Settling Class Members, and subject to the terms and conditions of the Settlement Agreement, the Defendants will cause
to be paid two million three hundred thousand dollars ($2,300,000.00) in cash or other immediately available funds
(hereinafter, the "Gross Class Settlement Fund").
       The Gross Class Settlement Fund shall be placed into the Class Escrow Account by the Insurer within ten (10)
business days after the execution by the Court of the Preliminary Approval Order. The funds in the Class Escrow Account
will be invested and re-invested in short-term United States Agency or Treasury Securities (or a mutual fund invested
solely in such instruments) or, in the case of any funds held in escrow in an amount of less than $100,000, in an interest-
bearing bank account insured by the FDIC. After the Effective Date, the Insurer shall release the monies in the Class
Escrow Account to Lead Plaintiffs' Counsel.
      The Gross Class Settlement Fund shall be used to pay, among other things: (a) Administration Costs; (b) any taxes
owed on the income of the Gross Class Settlement Fund and any reasonable expenses incurred in connection with the
calculation or payment of such taxes; (c) the Lead Plaintiffs' Counsel's fee and expense award discussed below in Section
X; (d) reimbursements to the Lead Plaintiffs in connection with the prosecution of this Class Action; and (e) the
Defendants' Counsel's fees and expenses up to a maximum of $100,000 as set forth in Section IV(A). The balance of the
Gross Class Settlement Fund after those payments is the "Net Class Settlement Fund." As soon after the Effective Date
as is possible, the Net Class Settlement Fund will be distributed, according to the Plan of Allocation described below, to
the Qualified Claimants.
       The Lead Plaintiffs estimate that the average distribution to each Class Member that files a valid and timely Proof of
Claim ("Qualified Claimants") will be approximately $0.02 per GlobeTel share (before the deduction of court-approved
fees, costs and expenses). The actual recovery of Qualified Claimants will depend upon a number of variables, including:
the number of Qualified Claimants; the amount of GlobeTel common stock that they purchased; the timing of their
purchases and sales (if any); the expenses of providing notice to the Class and administering the claims process (the
"Administration Costs"); the amount of attorneys' fees and expenses awarded by the Court; and the amount of interest (if
any) paid to the Class.
       The attorneys' fees and expenses incurred by Defendants' Counsel, up to a maximum amount of $300,000, are
being paid to Defendants' Counsel pursuant to an insurance policy issued on behalf of GlobeTel and its officers and
directors. In the event: (i) an objection(s) to the Settlement is raised; and (ii) the $300,000 referenced above has been
fully expended by Defendants' Counsel, then the Gross Class Settlement Fund shall be used to pay, up to a maximum
amount of $100,000, the attorneys' fees and expenses incurred by Defendants' Counsel in responding to and resolving
the objection(s). These fees, if any, shall be paid in accordance with the terms set forth in paragraphs 21-22 of the
Settlement Agreement.
      B. The Releases
       If the Settlement is approved, the Court will enter the Final Judgment Order, which provides for: (a) all of the
Settling Class Members to release all of the Settled Claims against all of the Released Parties; and (b) all of the Released
Parties to release all of the Settled Defendants' Claims upon the occurrence of the Effective Date.
      Each Class Member is hereby advised of the statutory language of California Civil Code Section 1542, which
provides as follows:
          A general release does not extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release , which if known by him , must have materially affected his settlement
with the debtor.
    Class Members are further advised of the potential existence of similar, comparable or equivalent statutes or
common law principles in other states.
       Submission of a Proof of Claim constitutes a Class Member's certification that: (a) the Class Member has waived
any rights or benefits, if available, under Section 1542 of the California Civil Code or any similar, comparable or equivalent
state statutes or principles of common law; (b) the Class Member expressly assumes all risks for claims heretofore and
hereafter arising, whether known or Unknown, from the subject matter of the Settled Claims; and (c) if the facts with
respect to which the release provided for under the Settlement Agreement is given or the dismissal with prejudice
contained in the Final Judgment Order is entered are found hereafter to be other than, or different from, the facts the
Class Member now believes to be true, the Class Member expressly accepts and assumes the risk of such possible
differences and facts, and agrees that the Settled Claims shall be and remain released notwithstanding such differences
in facts.


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       In order to receive a payment in connection with the Settlement, a Class Member must submit a valid and timely
Proof of Claim form. The Lead Plaintiffs' Counsel shall have the right, but not the obligation, to waive what they deem to
be formal or technical defects in any Proofs of Claim filed by Class Members in the interests of achieving substantial
justice. The Court will retain jurisdiction over the Class Action to resolve the validity of any disputes that arise regarding
the validity of Proofs of Claim submitted by Class Members.
     The Lead Plaintiffs and the Released Parties may, under certain circumstances defined in the Settlement
Agreement, terminate the Settlement.
       The Final Judgment Order will bar all future claims for contribution arising out of the Class Action by any person or
entity against the Released Parties.
V.    THE LEAD PLAINTIFFS REASONS FOR SETTLEMENT
      The Lead Plaintiffs and lead counsel for the Class (the "Lead Plaintiffs' Counsel") believe that the claims asserted in
the Class Action have merit and believe that the evidence that they collected supports the claims they have alleged.
Nevertheless, the Lead Plaintiffs and the Lead Plaintiffs' Counsel believe that the Settlement represents a substantial
recovery for the Class and is in the best interests of all Class Members. The Lead Plaintiffs' Counsel considered
numerous factors in assessing the merits of the Settlement, although none of those factors, standing alone,
was determinative.
        Among other things, the Lead Plaintiffs have been able to conduct substantial informal discovery of the facts related
to their claims. That investigation has included, among other things: the review of hundreds of pages of filings made by
GlobeTel with the SEC; the review of numerous news stories available on multiple databases concerning GlobeTel and
Huffs conduct; interviews with former GlobeTel employees and business partners; the review of undisclosed GlobeTel
documents and agreements; and interviews of potential witnesses in the Class Action. Moreover, the Lead Plaintiffs'
Counsel have conducted substantial legal research to assist in analyzing the legal bases of the Class's claims against the
Defendants. The Lead Plaintiffs' Counsel believe that the foregoing analysis and investigation provided them with an
adequate basis for advising the Class Plaintiffs to accept the terms of the proposed settlement of the Class Action with the
Released Parties as set forth herein. Because of the risks associated with continuing to litigate and proceeding to trial,
there was a danger that the Class Members would not have prevailed on any of their claims against the Defendants, in
which case Class Members would have received no compensation from the Released Parties. Additionally, the Class had
not yet been certified at the time the Settlement was reached. The Defendants may have opposed the certification of the
Class had the Settlement not been reached and appealed the certification of the Class had such a decision been reached
by the Court. Had the Class not been certified, or had the Class been decertified on appeal, the members of the Class
would have received no compensation from the Released Parties. Moreover, while the Lead Plaintiffs prevailed on the
Defendants' motion to dismiss the operative complaint in the Class Action, the Defendants would have advanced
numerous defenses on summary judgment and at trial that could potentially have resulted in the dismissal of all claims
asserted against the Defendants on behalf of the Class. The Lead Plaintiffs' Counsel also considered the fact that the
primary source of funds available to the Defendants to resolve the claims asserted against them in the Class Action were
the proceeds of certain insurance liability policies. The Gross Class Settlement Fund represents a substantial percentage
of those proceeds and, accordingly, even if the Lead Plaintiffs had prevailed at summary judgment and at trial, there is a
danger that the total damages that would be awarded to the Class would be less than the settlement consideration
provided for in the Settlement. Among other things, the Defendants' costs of defending against the Class Action and
other related actions could consume large amounts of the available insurance proceeds that are presently available to
fund the Settlement. Additionally, even if the Lead Plaintiffs successfully proved liability on the part of the Defendants at
trial, the damages phase of the trial, or a subsequent appeal, could result in a damage award materially less than the
settlement consideration provided for in the Settlement.
VI.   DEFENDANTS REASONS FOR SETTLEMENT
       The Defendants have denied and continue to deny all charges of fault , wrongdoing or liability against them arising
out of any of the conduct , statements , acts or omissions alleged, or that could have been alleged , in this Action.
Defendants further rely on those portions of the Settlement Agreement that indicate that their entry into the Settlement
shall not be construed or be deemed to be evidence or an admission or a concession on the part of any Defendant of any
fault or liability or damages whatsoever, and Defendants do not concede any infirmity in the defenses which they have
asserted or intended to assert in the Class Action. Nonetheless , the Defendants have concluded that further litigation
could be protracted and expensive , and that it is desirable that the Class Action be fully and finally settled in the manner
and upon the terms and conditions set forth in the Settlement Agreement. The Defendants have also taken into account
the uncertainty and risks inherent in any litigation, especially in complex cases like the Class Action . The Defendants
have therefore determined that it is desirable and beneficial for them to settle the Class Action in the manner and upon the
terms and conditions set forth in the Settlement Agreement.
    THE COURT HAS NOT FINALLY DETERMINED THE MERITS OF THE PLAINTIFFS' CLAIMS OR THE
DEFENDANTS' DEFENSES THERETO. THIS NOTICE DOES NOT IMPLY THAT THERE HAS BEEN OR WOULD BE
ANY FINDING OF VIOLATION OF THE LAW OR THAT RECOVERY COULD BE HAD IN ANY AMOUNT IF THE
ACTION WERE NOT SETTLED.

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VII.    THE PLAN OF ALLOCATION
      The Net Class Settlement Fund shall be distributed by the Claims Administrator to Qualified Claimants pursuant to
the Court-approved Plan of Allocation.     Those distributions will occur as soon after the Effective Date as is
reasonably possible.
      Pursuant to the Plan of Allocation, each Qualified Claimant who is entitled to a payment from the Net Class
Settlement Fund will be paid a pro rata share of the Net Class Settlement Fund based on the Qualified Claimant's "Total
Loss" compared to the "Total Losses" of all Qualified Claimants. A Qualified Claimant's Total Loss is the sum of all
"Losses" suffered by the Qualified Claimant in connection with the Qualified Claimant's acquisition of GlobeTel common
stock during the Class Period.
       A Qualified Claimant's Loss in connection with an acquisition of GlobeTel common stock during the Class Period
will be computed as follows:
      (a) The Loss will depend upon whether the Qualified Claimant held the GlobeTel common stock that the Qualified
Claimant purchased during the Class Period as of the close of business on August 24, 2006, the last day of the
Class Period.
       (b) For each share of GlobeTel common stock purchased between December 30, 2005 and August 24, 2006 that a
Qualified Claimant continued to hold as of the close of business on August 24, 2006, the Loss equals: (i) the price at
which the Qualified Claimant purchased or otherwise acquired the share of GlobeTel common stock; minus (ii) the price of
the share of GlobeTel common stock as of the close of business on August 24, 2006; minus (iii) the value of any dividend
or distribution received during the Class Period by the Qualified Claimant from GlobeTel as a result of the Qualified
Claimant's purchase of that share of GlobeTel common stock. If the foregoing calculation yields a total less than zero, the
Loss in connection with the purchase of that share of GlobeTel common stock is zero.
      (c) For each share of GlobeTel common stock that a Qualified Claimant both purchased and sold between
December 30, 2005 and August 24, 2006, the Loss equals: (i) the price at which the Qualified Claimant purchased or
otherwise acquired the GlobeTel share; minus (ii) the price at which the Qualified Claimant sold, transferred or otherwise
disposed of the GlobeTel share; minus (iii) the value of any dividend or distribution received during the Class Period by
the Qualified Claimant from GlobeTel as a result of the Qualified Claimant's purchase of that GlobeTel share. If the
foregoing calculation yields a total less than zero, the Loss in connection with the purchase of that GlobeTel share of
common stock is zero.
      (d) In determining Losses, the first-in, first-out ("FIFO") principle of accounting will be applied. That is, sales of
GlobeTel stock during the Class Period will be matched, in chronological order, first against GlobeTel stock the Qualified
Claimant owned at the close of business on December 29, 2005, and then against all purchases of GlobeTel stock made
during the Class Period.
      (e) The prices utilized in determining a Qualified Claimant's Loss will be exclusive of any sales charges
or commissions.
      (f) Gains achieved in connection with transactions in any particular GlobeTel shares will be offset against losses
suffered in connection with transactions in all other GlobeTel shares in calculating Qualified Claimants' Losses.
VIII.   THE PROOF OF CLAIM
      IN ORDER TO BE ELIGIBLE TO RECEIVE ANY PAYMENT IN CONNECTION WITH THE SETTLEMENT, YOU
MUST COMPLETE AND RETURN THE ENCLOSED PROOF OF CLAIM FORM. THE PROOF OF CLAIM MUST BE:
(A) SENT BY PRE-PAID FIRST-CLASS MAIL; (B) POSTMARKED ON OR BEFORE May 5, 2008; AND (C)
ADDRESSED AS FOLLOWS:
                             Richard Stevens , et al. v . GlobeTel Communications Corp ., et al.
                                                     Claims Administrator
                                                    c/o Gilardi & Co. LLC
                                                        P.O. Box 990
                                               Corte Madera , CA 94976-0990
      IF YOU DO NOT COMPLETE AND RETURN A PROPER PROOF OF CLAIM, YOU WILL NOT BE ENTITLED
TO ANY SHARE OF THE SETTLEMENT PROCEEDS.
       IF YOU ARE A CLASS MEMBER AND DO NOT PROPERLY EXCLUDE YOURSELF FROM THE CLASS, THE
COURT APPROVES THE SETTLEMENT AND THAT SETTLEMENT BECOMES FINAL, YOU WILL BE BOUND BY THE
FINAL JUDGMENT ORDER, WHICH DISMISSES THE CLASS ACTION AGAINST THE DEFENDANTS ON THE
MERITS AND WITH PREJUDICE AND RELEASES ALL OF THE SETTLED CLAIMS AGAINST THE RELEASED
PARTIES, EVEN IF YOU DO NOT FILE A PROOF OF CLAIM. IF YOU EXCLUDE YOURSELF, YOU WILL NOT BE
BOUND BY THE FINAL JUDGMENT ORDER, BUT YOU WILL NOT BE ENTITLED TO ANY SHARE OF THE
SETTLEMENT PROCEEDS.
         Each Class Member who submits a Proof of Claim shall be deemed to have submitted to the jurisdiction of the
United States District Court for the Southern District of Florida, Miami Division, for purposes of the Class Action and his,
her or its claim.
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IX.   RIGHT TO BE EXCLUDED FROM THE CLASS
        Each Class Member shall be bound by all determinations and judgments in the Class Action concerning the
Settlement, whether favorable or unfavorable, unless such person requests to be excluded from the Class. To be
excluded from the Class, a Class Member must mail, by pre-paid first-class mail, a written request for exclusion from the
Class, postmarked no later than January 18, 2008, addressed to Claims Administrator, Richard Stevens, et al. v. GlobeTel
Communications Corp., et al, P.O. Box 990, Corte Madera, CA 94976-0990. No person may exclude himself, herself or
itself from the Class after that date. In order to be valid, each such request for exclusion must set forth the name, address
and telephone number of the person or entity requesting exclusion, must state that such person or entity "requests
exclusion from the Class in Richard Stevens, et al. v. GlobeTel Communications Corp., et al , Case No. 06-21071-CIV-
ALTONAGA/Turnoff (S.D.Fl.)," and must be signed by such person or entity. Requests for exclusion must also include
the date(s), price(s), and number(s) of shares of all purchases and sales of GlobeTel common stock during the Class
Period or copies of account statements, brokerage statements or other documents containing that information. The
request for exclusion shall not be effective unless the request for exclusion provides the required information and is made
within the time stated above, or the exclusion is otherwise accepted by the Court.
X.    APPLICATION FOR ATTORNEYS' FEES AND EXPENSES
      The Lead Plaintiffs' Counsel will apply to the Court at the Settlement Hearing for an award of attorneys' fees
representing no more than thirty percent (30%) of the Gross Class Settlement Fund, plus interest (if any) on those fees at
the same rate as interest is paid to Qualified Claimants. Assuming that no interest is paid on the Gross Class Settlement
Fund, the Lead Plaintiffs' Counsel will therefore request the payment of no more than $690,000 in attorneys' fees.
      The Lead Plaintiffs' Counsel will also apply at the Settlement Hearing for the reimbursement of the expenses that
they have incurred in prosecuting the Class Action, plus interest (if any) on the award of expenses made by the Court at
the same rate as interest is paid to Qualified Claimants. The amount of the expenses for which the Lead Plaintiffs'
Counsel will seek reimbursement will not exceed $250,000. The expenses awarded by the Court to the Lead Plaintiffs'
Counsel will be paid from the Gross Class Settlement Fund.
     The Lead Plaintiffs' Counsel will also apply at the Settlement Hearing for $2,000 per Lead Plaintiff for
reimbursement for their time, effort, and expenses in connection with the prosecution of this Class Action.
     Based upon the information available to the Lead Plaintiffs' Counsel and their damages experts, the total of the
maximum attorneys' fees and expenses that the Lead Plaintiffs' Counsel may request equals approximately $0.01 per
damaged share of GlobeTel common stock purchased during the Class Period. Under no circumstances will any Class
Member be personally liable for any of the attorneys' fees or expenses awarded to the Lead Plaintiffs' Counsel.
        The Lead Plaintiffs' Counsel believe that their requests for the payment of attorneys' fees and expenses are justified
by a number of factors. The attorneys' fees that the Lead Plaintiffs' Counsel intend to request would compensate them for
their efforts in obtaining the Settlement for the benefit of the Lead Plaintiffs and Class Members and for the risk incurred
by them by prosecuting the Class Action on a contingent basis and by advancing significant expenses on behalf of the
Lead Plaintiffs and the Class. The Lead Plaintiffs' Counsel believe that the fees and expenses that they will request are
within the range of fees that have been awarded to counsel for classes of investors under similar circumstances in
litigation of this type.
XI.   RIGHT TO BE HEARD AT THE SETTLEMENT HEARING
      Any Class Member who has not validly and timely requested to be excluded from the Class, and who objects to any
aspect of the Settlement, the Plan of Allocation, the adequacy of the representation by the Class Plaintiffs' Counsel or the
application of the Class Plaintiffs' Counsel for attorneys' fees, costs and expenses, may appear and be heard at the
Settlement Hearing. Any such person must submit a written notice of objection (a "Notice of Objection") to each of the
following Persons so that it is received on or before January 18, 2008:
                                                  To the Court:
                                                  Clerk of the Court
                                                  United States District Court
                                                  Southern District of Florida
                                                  Miami Division
                                                  301 North Miami Avenue
                                                  Miami, FL 33128
                                                  To Plaintiffs Counsel:
                Lee S. Shalov, Esq.                                                 Ronen Sarraf, Esq.
                Thomas G. Ciarlone, Jr., Esq.                                       Joseph Gentile, Esq.
                Shalov Stone Bonner & Rocco LLP                                     Sarraf Gentile LLP
                485 Seventh Avenue, St.1000                                         11 Hanover Square, 2nd Floor
                New York, NY 10018                                                  New York, NY 10005


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                                                  To Defendants Counsel:
                                                 Brian E. Pastuszenski, Esq.
                                                 Alexis Shapiro, Esq.
                                                 Goodwin Procter LLP
                                                 53 State Street
                                                 Boston, MA 02109
       The Notice of Objection must clearly indicate: (a) the name and number of the Class Action as listed on the first
page of this Notice; (b) the objecting person's membership in the Class by setting forth the number of shares of GlobeTel
common stock that the objecting person purchased during the Class Period, the dates of those purchases and the dates
(if any) on which those Securities were sold; and, (c) the reasons for the objection. Only Class Members who have
submitted written Notices of Objection in this manner will be entitled to be heard at the Settlement Hearing, unless the
Court orders otherwise.
       If you wish to submit a Notice of Objection, you need not attend the Settlement Hearing. If, however, you or your
representative intends to speak at the Settlement Hearing, you must disclose that intention in your Notice of Objection.
Your Notice of Objection must also identify any witnesses that you intend to call at the Settlement Hearing and any
exhibits that you intend to introduce into evidence or otherwise rely upon at the Settlement Hearing.
       Class Members do not need to appear at the Settlement Hearing or take any other action to indicate their approval
of the Settlement.
XII.    ADDITIONAL INFORMATION
        This Notice is a summary and does not describe all of the terms of the Settlement. For further information regarding
the Settlement and the Class Action, you may review the Settlement Agreement and other papers on file with the Court,
including the Complaint, the motions to dismiss, and the Class Plaintiffs' opposition to those motions. All of the papers
filed in the Class Action are available for inspection and copying during regular office hours at the offices of the Clerk of
the Court, United States District Court, Southern District of Florida, 301 North Miami Avenue, Miami, FL 33128.

        PLEASE DO NOT CALL THE CLERK OR THE COURT WITH QUESTIONS CONCERNING THIS NOTICE.

       If you have questions regarding the Settlement or the Class Action, you may also contact Lead Plaintiffs' Counsel at
the following address and telephone number: Lee S. Shalov, Esq., or Thomas G. Ciarlone, Jr., Esq., Shalov Stone Bonner
& Rocco LLP, 485 Seventh Avenue, Suite 1000, New York, New York 10018, (212) 239-4340.
XIII.   SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
      If you held any GlobeTel securities that were purchased during the Class Period for the beneficial interest of a
person or entity other than yourself, then, within ten (10) calendar days after you receive this Notice, you must either: (a)
forward a copy of this Notice and the Proof of Claim form to each such beneficial owner; or (b) provide the name and last
known address of each such beneficial owner to the Claims Administrator at the following address:
                             Richard Stevens , et al. v . GlobeTel Communications Corp., et al.
                                                     Claims Administrator
                                                    c/o Gilardi & Co. LLC
                                                        P.O. Box 990
                                               Corte Madera , CA 94976-0990
                                                       (800) 447-7657
      If you choose to mail the Notice and Proof of Claim yourself, you may obtain additional copies of those documents
(without cost to you) by mailing a written request to the Claims Administrator.
      Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you,
you may obtain reimbursement for or advancement of reasonable administrative costs incurred in connection with
forwarding the Notice and Proof of Claim and which would not have been incurred but for the obligation to forward the
Notice and Proof of Claim upon submission of appropriate documentation to the Claims Administrator.

                                                                           By Order Of The United States District Court
                                                                           For The Southern District of Florida
                                                                           Miami Division




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