I know the thought of keeping a phone you're unhappy with for two-years can make you cringe. I don't want you to ever feel that way about a phone you have. Your friend can definitely order an upgrade to any device they or you want. I can assume they're on a different account so I encourage you to check the SIM Card capabilities to confirm if they're the same size SIM. If they are, once your friend's new phone is activated to their number, you can just swap equipment, input your own SIM and that will finalize the transfer. This can be done same day the phone is activated.
Since the equipments would be going from one account to another, the one year free warranty would be void. This is the only "penalty" incurred for swapping phones. Let us know if you have any other questions.
Please follow us on Twitter @VZWSupport