Iphone 4 won't restore to factory settings?

I got a new iphone from my friend but it has a passcode and i'm trying to do the reset where you hold the home button plug it in to the computer and restore. But in itunes there's a box that pops up and says "Contacting the iphone update server" it just stays there forever and then doesn't restore. What can I do so i can get this phone back to factory settings?

Ask an apple genius

Download the latest ipsw file (7.0.3 now) for your device's model from here; 'http://www.ipswdownloader.com/'
And connect your device, hold SHIFT and click 'Restore'. A pop-up will appear. Choose your downloaded ipsw and restore.
If not worked reinstall iTunes and retry.
Note: ipsws are iDevice firmwares.
Hope this helps and if helped, please choose as 'Best Answer'.

Can't do it ask your friend for the passcode. His Apple account is still connecting and it's blocking you because of it's connection to Find My iDevice and security features that don't allow you to factory reset it because it's locked with a passcode.

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