Form of Rights Certificate

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED MAY 29, 2013 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.  COPIES OF THE PROSPECTUS ARE AVAILABLE FROM BROADRIDGE CORPORATE ISSUER, INC. THE INFORMATION AGENT BY CALLING  TOLL FREE XXX-XXX-XXXX.

 

Incorporated under the laws of the State of Delaware

 

Evidencing Non–transferable Subscription Rights to Purchase Shares of Common Stock,

Par Value $0.01 Per Share, of Zoom Telephonics, Inc. at a Subscription Price of $0.28 per Share

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of non-transferable subscription rights (“Rights”) set forth above. Each whole Right entitles the holder thereof to subscribe for and purchase,  subject to potential purchase limits for shareholders attempting to own 5% or more of our shares, one share of Common Stock, with a par value of $0.01 per share, of Zoom Telephonics, Inc., a Delaware corporation, (the “Company”), at a subscription price of 0.28 per share (the “Basic Subscription Privilege”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus. If any shares of Common Stock available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Privilege (the “Excess Shares”), any Rights holder that exercises its Basic Subscription Privilege in full may subscribe for a number of Excess Shares consistent with the terms and conditions of the Rights Offering, as described in the Prospectus (the “Oversubscription Rights”).

 

The Rights represented by this Subscription Rights Certificate may be exercised by completing the form below and by returning the full payment for each share of purchased Common Stock in accordance with the instructions contained herein.  You should receive your share certificates within one week of the expiration date of this rights offering, which expires August 9, 2013, unless there is an extension, which is unlikely but possible.  Shares issued upon exercise of the subscription rights may be sold, along with the Company's outstanding shares of common stock, on the over-the-counter market.

 

The Company is not offering, selling, or soliciting any purchase of shares in any state or other jurisdiction in which the rights offering is not permitted.

 

The Company’s ability to utilize its net operating loss carry forwards (NOLs) against future taxable income, if any, would be substantially limited if it were to undergo an ownership change within the meaning of Section 382 of the Internal Revenue Code.  The Company has the right, in its sole and absolute discretion, to limit the exercise of Rights, including instructing the subscription agent to limit or refuse to honor any exercise of Rights if that exercise of Rights might, in the Company’s sole and absolute discretion, result in a subscriber owning 5% or more of the Company’s Common Stock and jeapordize the Company’s NOLs.

 

 

	Dated May 29, 2013
Frank Manning
President and Chief Executive Officer

 

 

 

	NUMBER OF SHARES YOU’D LIKE TO BUY	PAYMENT
Shares requested for Basic Subscription Rights*	____________   x $.28/share  =	$___________  (line 1)
Shares requested for Oversubscription Rights Purchase**	____________   x $.28/share  =	$___________  (line 2)
TOTAL PAYMENT REQUIRED  (sum of line 1 and line 2)	=	$___________

 

* Shares purchased with Basic Subscription Rights may not be more than the number of shares you owned at 5:00 p.m. Eastern on the record date, June 14, 2013.  In addition, the Company may limit or refuse some or all of any subscription, in its sole and absolute discretion, that would result in the subscriber owning 348,685 shares or more of the Company’s common stock, to avoid limitations on the availability of the Company’s net operating loss carry forwards.  If this occurs, you will receive a refund of part of your payment so that your net payment is only for the shares you actually buy.

I (we) owned, either directly or indirectly, this many shares at 5:00 p.m. EasternTime on June 14, 2013:  __________

** Shareholders must fully exercise their Basic Subscription Rights to be eligible for Oversubscription Rights purchase.  If you fully exercise your Basic Subscription Right, shares requested for Oversubscription Rights Purchase can be from zero to whatever number you'd like, subject to the limitations described in the rights offering prospectus.

 

BOX 3a. o

I certify that the purchase of shares of Common Stock pursuant to the Subscription  Rights (basic or oversubscription) will not result in my (our) owning either directly or indirectly, of record or beneficially, more than 348,685 shares of Common Stock.

 

OR

 

BOX 3b. o

The purchase of shares pursuant to the Subscription Rights (whether basic or oversubscription) would result in my (our) owning, either directly or indirectly, of record or beneficially, more than 348,685 shares of Common Stock.

 

BOX 4a. o

Payment in the following amount is enclosed: $ ____________ (This amount must equal the amount shown in “Total payment required” of Box 2 above and be a cashier’s or certified check drawn on a U.S. bank payable to “Broadridge FBO Zoom Telephonics”)

 

 

BOX 4b. o

Please wire the total amount of Box 2 above to U.S. Bank, Minneapolis, MN, ABA No. XXXXXXX, Account No: XXXXXXXX for the benefit of “Broadridge, Subscription Agent for Zoom Telephonics”, referencing the rights holder’ name as the wire’s issuer.

 

SIGNATURE		NAME (Please type or print)		DATE

                                                                                                                                                              

VALID DELIVERY REQUIRES YOU TO DELIVER THIS FORM AND PAYMENT, IF ANY,

BY HAND, MAIL, OR OVERNIGHT COURIER TO:

 

IF YOU SPECIFY THAT SHARES BE SENT TO SOMEONE OTHER THAN YOURSELF, PLEASE HAVE YOUR ABOVE SIGNATURE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANK, STOCK BROKER, SAVINGS & LOAN ASSOCIATION OR CREDIT UNION) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 17AD-15.

 

 

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