Document:

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                                                                   EXHIBIT 10.69

                               EXCHANGE AGREEMENT

This Exchange Agreement ("Agreement") is dated as of 15th day of June, 1999 (the
"Effective Date"), and is made by and among Equalnet Communications Corp., a
Texas corporation, hereinafter referred to as "Equalnet" or "Company", and
Genesee Fund Limited - Portfolio B, a British Virgin Islands Corporation,
hereinafter referred to as "Holder."

WHEREAS, Holder is the holder of $1,563,624 aggregate principal amount of 6%
Senior Secured Convertible Notes due 2001 (collectively, the "Notes") of
Equalnet; and

WHEREAS, Holder is currently due accrued but unpaid interest on the Notes
totaling $7,818.00, bringing the aggregate amount due to $1,571,442; and

WHEREAS, Equalnet has requested that Holder exchange the Notes for shares of
convertible preferred stock of Equalnet as described herein; and

WHEREAS, Holder is desirous of undertaking this exchange accepting the preferred
stock and releasing Equalnet from any liability in connection with the Notes;

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and intending to be
legally bound hereby, Equalnet and Holder hereby agree as follows:

                                  SECTION 1.
                EXCHANGE AND TERMS OF SERIES F PREFERRED STOCK

a. Series F Preferred Stock.  The Company shall authorize the issuance and sale
   ------------------------
   to the Holder of 1,571 shares of Series F Convertible Preferred Stock
   ("Series F Preferred Stock") of the Company.  The Series F Preferred Stock
   shall have the terms and conditions as set forth in the form of Statement of
   Resolutions of the Board of Directors Establishing and Designating Series F
   Convertible Preferred Stock and Fixing the Rights and Preferences of Such
   Series (the "Statement of Resolutions") set forth in Annex I attached hereto.
                                                        -------

b. Exchange of Notes for Series F Preferred Stock.  Subject to the terms and
   ----------------------------------------------
   conditions of this Agreement, the Holder agrees to deliver to the Company at
   the Closing the Holder's Note or Notes and the Company agrees (x) to deliver
   to the Holder or its designee at the Closing in exchange for such Notes a
   certificate representing the number of shares (the "Series F Preferred
   Shares") of Series F Preferred Stock as set forth in Section 1.a and (y) to
   pay the Holder an amount in cash equal to $442.00.  The Company and Holder
   agree that each Note so exchanged shall be cancelled in full as of the
   Effective Date and the Company agrees to ministerially cancel in full each
   Note so exchanged immediately after the Closing.

c.  Closing.  The closing of the exchange described in Section 1.b. shall take
    -------
   place at the Law Offices of Brian W Pusch, Penthouse Suite, 29 West 57th
   Street, New York, New York 10019 at 10:00 A.M., New York City Time, as soon
   as practicable, but no later than December 8, 1999, or at such other time and
   place as the Company and the Holder mutually agree upon orally or in writing
   (which time and place are designated as the "Closing").

d. Certain Terms.  The shares of Series F Preferred Stock issuable pursuant to
   --------------
   Section 5 of the Statement of Resolutions as dividends on the Series F
   Preferred Shares are referred to
<PAGE>

   herein as "Dividend Shares." The shares of Common Stock issuable upon
   conversion of the Series F Preferred Shares and the Dividend Shares are
   referred to herein collectively as the "Common Shares." The Series F
   Preferred Shares, the Dividend Shares and the Common Shares are referred to
   herein collectively as the "Securities."

                                  SECTION 2.
                  CONDITIONS PRECEDENT TO HOLDER'S OBLIGATION

The obligation of the Holder to exchange the Notes for Series F Preferred Stock,
such exchange  to be effective as of the Effective Date, is subject to the
following conditions (any or all of which may be waived by the Holder in its
sole discretion):

a.  Representations and Warranties.  Each of the representations and warranties
    ------------------------------
    of the Company set forth in this Agreement shall be true on the date of the
    Closing.

b.  Documentation at Closing.  The Holder shall have received, on or prior to
    ------------------------
    the date of the Closing, all of the following, each in form and substance
    satisfactory to the Holder and its counsel:

    (1) A certificate, dated the date of the Closing, duly executed by the Chief
        Executive Officer certifying (1) the Articles of Incorporation and By-
        Laws of the Company as in effect on the date of the Closing; (2) all
        resolutions of the Board of Directors (and committees thereof) of the
        Company relating to this Agreement and the transactions contemplated
        hereby; and (3) such other matters as reasonably requested by the
        Holder;

    (2) A certificate, dated the date of the Closing, duly executed by the Chief
        Executive Officer certifying the statements of the Company to the effect
        set forth in Sections 2.a. and 2.c.;

    (3) Evidence of the filing with, and acceptance by, the Secretary of State
        of the State of Texas, of the Statement of Resolutions;

    (4) An opinion of Dean H. Fisher, General Counsel of the Company, dated the
        date of the Closing, in form, scope and substance reasonably
        satisfactory to the Holder, to the effect set forth in Annex III
        attached hereto.

c.  Performance; No Default.  The Company shall have performed and complied with
    -----------------------
    all covenants and agreements contained in this Agreement required to be
     performed or complied with by the Company prior to or at the Closing.

d.  Proceedings and Documents. All corporate and other proceedings in connection
    -------------------------
    with the transactions contemplated by this Agreement and all documents and
    instruments incident to such transactions shall be satisfactory to the
    Holder and its counsel, and the Holder and its counsel shall have received
    all such counterpart originals or certified or other copies of such
    documents as they may reasonably request.

                                  SECTION 3.
                 CONDITIONS PRECEDENT TO EQUALNET'S OBLIGATION

The obligation of the Company to exchange the Notes for Series F Preferred
Stock, such exchange to be effective as of the Effective Date, is subject to the
following conditions (any or all of which may be waived by the Company in its
sole discretion):
<PAGE>

a.  Representations and Warranties.  Each of the representations and warranties
    ------------------------------
    of the Holder set forth in this Agreement shall be true on the date of the
    Closing.

b.  Performance; No Default.  The Holder shall have performed and complied with
    -----------------------
    all agreements and conditions contained in this Agreement required to be
    performed or complied with by the Holder prior to or at the Closing.

c.  Proceedings and Documents. All corporate and other proceedings in connection
    -------------------------
    with the transactions contemplated by this Agreement and all documents and
    instruments incident to such transactions shall be satisfactory to the
    Company and its counsel, and the Company and its counsel shall have received
    all such counterpart originals or certified or other copies of such
    documents as they may reasonably request.

                                  SECTION 4.
           REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF EQUALNET

The Company represents and warrants to, and covenants and agrees with, the
Holder as follows

a.  Organization and Standing of the Company. The Company is a corporation duly
    ----------------------------------------
    organized, validly existing and in good standing under the laws of its state
    of incorporation and has all requisite corporate power and authority (i) to
    own, lease and operate its properties, to carry on its business as now being
    conducted and (ii) to execute, deliver and perform its obligations under
    this Agreement, the Statement of Resolutions, the Amended and Restated
    Registration Rights Agreement, the form of which is set forth in Annex II
                                                                     --------
    attached hereto (the "Amended and Restated Registration Rights Agreement"),
    and the other agreements to be executed by the Company in connection
    herewith and to consummate the transactions contemplated hereby and thereby.
    The Company and EqualNet Corporation, Netco Acquisitions Corp. or USC
    Telecom Corp. (the "Subsidiaries") are duly qualified to do business and are
    in good standing in all jurisdictions wherein such qualification is
    necessary and where failure so to qualify would have a material adverse
    effect on their business, properties, operations, condition (financial or
    other), results of operations or prospects of the Company. The Company has
    no equity investment in any person other than its subsidiaries.

b.  Concerning the Common Shares and the Common Stock. The Common Shares (1) to
    -------------------------------------------------
    the extent available out of the total shares currently authorized on the
    date hereof; and (2) subject to shareholder approval of the Reverse Stock
    Split as contemplated in Section 4.j herein, for such Common Shares
    unavailable out of the total shares authorized on the date hereof have been
    duly authorized and when issued upon conversion of the Preferred Shares or
    the Dividend Shares will be validly issued, fully paid and nonassessable and
    will not subject the holder thereof to personal liability by reason of being
    such holder. There are no preemptive or similar rights of any stockholder of
    the Company or any other person to acquire the Series F Preferred Shares and
    Dividend Shares or any of the Common Shares. The Common Stock is listed for
    trading on the Nasdaq SmallCap Market ("Nasdaq") and no suspension of
    trading in the Common Stock is in effect.

c.  Exchange Agreement, and Other Transaction Documents.  This Agreement, the
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    Amended and Restated Registration Rights Agreement, the Statement of
    Resolutions and the other agreements and instruments contemplated hereby and
    thereby have been duly and validly
<PAGE>

   authorized by the Company, this Agreement has been duly executed and
   delivered by the Company and this Agreement is, and the Amended and Restated
   Registration Rights Agreement, the Statement of Resolutions and such other
   agreements, when executed and delivered by the Company, will be, valid and
   binding obligations of the Company enforceable in accordance with their
   respective terms, subject as to enforceability to general principles of
   equity and to bankruptcy, insolvency, moratorium and other similar laws
   affecting the enforcement of creditor's rights generally.

d. Non-contravention.  The execution and delivery by the Company of this
   -----------------
   Agreement and the other documents contemplated by this Agreement and the
   consummation by the Company of the issuance of the Series F Preferred Shares
   as contemplated by this Agreement, and the other transactions contemplated by
   this Agreement, the Amended and Restated Registration Rights Agreement and
   the Statement of Resolutions do not and will not, with or without the giving
   of notice or the lapse of time, or both (i) result in any violation of any
   terms of the Articles of Incorporation or By-laws of the Company and the
   Subsidiaries; (ii) conflict with or result in a breach by the Company or the
   Subsidiaries or any of the terms or provisions of, or constitute a default
   under, or result in the modification, amendment, termination or cancellation
   of, result in the acceleration of any obligation of the Company or the
   Subsidiaries under, or result in the creation or imposition of any lien,
   security interest, charge or encumbrance upon any of the properties or assets
   of the Company or the Subsidiaries pursuant to any indenture, mortgage, deed
   of trust or other agreement or instrument to which the Company or the
   Subsidiaries is a party or by which the Company or the Subsidiaries or any of
   their properties or assets is bound or affected; (iii) violate or contravene
   any applicable law, rule or regulation or any applicable decree, judgment or
   order of any court, United States federal or state regulatory body,
   administrative agency or other governmental body having jurisdiction over the
   Company or the Subsidiaries or any of their properties or assets, including,
   without limitation, any law of the State of New York relating to usury of the
   maximum rate chargeable with respect to indebtedness; or (iv) have any
   material adverse effect on any permit, certification, registration, approval,
   consent, license or franchise necessary for the Company or the Subsidiaries
   to own or lease and operate any of their properties or to conduct any of
   their businesses or the ability of the Company or the Subsidiaries to make
   use thereof.

e. Approvals.  No authorization, approval or consent of, or filing with, any
   ---------
   court, governmental body, regulatory agency, self-regulatory organization, or
   stock exchange or market or the stockholders of the Company is required to be
   obtained or made by the Company for (1) the execution, delivery and
   performance by the Company of this Agreement, the Amended and Restated
   Registration Rights Agreement, and the other agreements and instruments
   contemplated hereby and thereby, (2) the execution and filing and performance
   by the Company of the Statement of Resolution, (3) the issuance of the Series
   F Preferred Shares and Dividend Shares as contemplated by this Agreement and
   (4) the issuance of Common Shares on conversion of the Series F Preferred
   Shares or the issuance of Dividend Shares, other than (u) shareholder
   approval of the issue required by Section 5.h herein, (v) a reverse stock
   split substantially similar to that as described in Section 4.j herein; (w)
   the listing of the Common Shares on Nasdaq; (x) registration of the resale of
   the Common Shares under the 1933 Act as contemplated by the Amended and
   Restated Registration Rights Agreement; (y) as may be required under
   applicable state securities or "blue sky" laws and (z) filing of one or more
   Forms D with respect to the Securities as required under Regulation D.

f. SEC Filings.  The Company has timely filed all required forms, reports and
   -----------
   other documents required to be filed with the Securities Exchange Commission
   (the "SEC") under the
<PAGE>

   Securities Exchange Act of 1934, as amended (the "1934 Act") since January 1,
   1997. All of such forms, reports and other documents complied in all material
   respects with all applicable requirements of the 1933 Act and the 1934 Act
   (1) when declared effective for those forms, reports and other documents
   filed under the 1933 Act; and (2) as filed or subsequently amended for those
   forms, reports and other documents filed under the 1934 Act.

g. Absence of Brokers, Finders, Solicitation Compensation, Etc.  No broker,
   ------------------------------------------------------------
   finder or similar person is entitled to any commission, fee or other
   compensation in respect of the transactions contemplated by this Agreement by
   reason of any action or conduct of the Company or any person acting on its
   behalf, and the Company shall pay, and indemnify and hold harmless the Holder
   from, any claim made against the Holder by any person for any such
   commission, fee or other compensation.  The Company has not and will not pay
   any commission or other remuneration to any person for solicitation of
   exchanges of Notes for shares of Series F Preferred Stock pursuant to this
   Agreement.

h. [Reserved.]

i. Certain Securities Law Matters.  The shares of Series F Preferred Stock may
   ------------------------------
   be issued to the Holder pursuant to this Agreement without registration under
   the 1933 Act by reason of Section 3(a)(9) thereof.  For purposes of Rule 144
   under the 1933 Act, the Company understands and believes that each Holder
   will be entitled to tack the holding period of its Note to the holding period
   of the shares of Series F Preferred Stock issued to such holder in exchange
   for such Note.

j. Capitalization.  Following the reverse stock split as contemplated by the
   --------------
   Company (based on the number of shares outstanding on September 24, 1999),
   the authorized capital stock of the Company will be (a) 50,000,000 shares of
   Common Stock of which approximately 2,872,262 shares will be outstanding, all
   of which are fully paid and nonassessable; and (b) 5,000,000 shares of
   Preferred Stock, $.01 par value, of which 2,000 shares have been designated
   Series A Convertible Preferred Stock and of which 2,057 shares are
   outstanding, 3,000 shares have been designated Series B Senior Convertible
   Preferred Stock and of which 3,000 shares are outstanding, 300,000 shares
   have been designated Series C Convertible Preferred Stock and of which
   215,799 shares are outstanding, 6,500 shares have been designated Series D
   Convertible Preferred Stock and of which 3,964 shares are outstanding,
   900,000 shares have been designated Series E Convertible Preferred Stock
   ("Series E Preferred Stock") of which 833,333 are outstanding and of which
   6,500 shares will be designated as Series F Convertible Preferred Stock of
   which 3,142 shares will be issued pursuant to this Agreement and the Exchange
   Agreement of even date herewith by and among the company and Willis Group,
   LLC, a Texas limited liability company.  As of September 24, 1999, the
   Company had outstanding options, warrants and similar rights, including
   preferred stock convertible into Common Stock, entitling the holders to
   purchase or acquire 25,324,269 shares of Common Stock.  Other than as set
   forth in the preceding sentence, the Company does not have outstanding any
   material amount of securities (or obligation to issue any such securities)
   convertible into, exchangeable for or otherwise entitling the holders thereof
   to acquire shares of Common Stock.  The Company has duly reserved from its
   authorized and unissued shares of Common Stock the full number of shares
   required for (a) all options, warrants, convertible securities and other
   rights to acquire shares of Common Stock which are outstanding and (b) all
   shares of Common Stock and options and other rights to acquire shares of
   Common Stock which may be issued or granted under the stock option and
   similar plans which have been adopted by the Company or any of its
   Subsidiaries other than those shares required for full conversion
<PAGE>

   of Series A Convertible Preferred Stock, Series D Convertible Preferred
   Stock, Series E Junior Preferred Stock and Series F Convertible Preferred
   Stock.

                                  SECTION 5.
                               CERTAIN COVENANTS

a. Restrictive Legends.  (1) The Holder acknowledges and agrees that the
   -------------------
   certificates for the shares of Series F Preferred Stock issued to such Holder
   shall bear restrictive legends in substantially the following form (and a
   stop-transfer order may be placed against transfer of such shares of Series F
   Preferred Stock):

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").  THE
     SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
     TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
     STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF
     COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

     THE NUMBER OF SHARES CONSTITUTING THE PORTION OF THE MAXIMUM SHARE AMOUNT,
     AS DEFINED IN THE STATEMENT OF RESOLUTION OF SERIES F CONVERTIBLE STOCK
     (THE "STATEMENT OF RESOLUTION"), ALLOCATED TO THE SHARES REPRESENTED BY
     THIS CERTIFICATE FOR THE PURPOSES OF CONVERSION THEREOF IS [NUMBER].

     SECTION 10(B)(3)(A) OF THE STATEMENT OF RESOLUTION PERMITS A HOLDER OF THE
     SECURITIES REPRESENTED BY THIS CERTIFICATE TO CONVERT SUCH SECURITIES IN
     ACCORDANCE WITH THE STATEMENT OF RESOLUTION WITHOUT BEING REQUIRED TO
     SURRENDER THIS CERTIFICATE TO THE COMPANY UNLESS ALL OF THE SECURITIES
     REPRESENTED HEREBY ARE CONVERTED.  CONSEQUENTLY, FOLLOWING CONVERSION OF
     ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE, THE NUMBER OF SHARES
     REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES
     STATED HEREON.  UPON REQUEST OF ANY PROPOSED TRANSFEREE OF THIS
     CERTIFICATE, THE COMPANY WILL PROVIDE CONFIRMATION OF THE NUMBER OF SHARES
     EVIDENCED BY THIS CERTIFICATE.

     STATEMENTS (1) SETTING FORTH THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND
     RELATIVE RIGHTS OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND (2)
     DENYING THE PREEMPTIVE RIGHT OF SHAREHOLDERS OF THE COMPANY TO ACQUIRE
     UNISSUED OR TREASURY SHARES OF THE COMPANY ARE SET FORTH IN THE ARTICLES OF
     INCORPORATION OF THE COMPANY ON FILE IN THE OFFICE OF THE SECRETARY OF
     STATE OF THE STATE OF TEXAS.  THE COMPANY WILL FURNISH A COPY OF SUCH
     STATEMENTS TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
     RECEIPT OF WRITTEN REQUEST THEREFOR DIRECTED TO DEAN H. FISHER, EQUALNET
     PLAZA, 1250 WOOD BRANCH PARK DRIVE, HOUSTON, TEXAS 77079-1212.

  (2) The Holder further acknowledges and agrees that until such time as the
      Common Shares issued or issuable have been registered for resale under the
      1933 Act as contemplated by the Amended and Restated Registration Rights
      Agreement, the certificates for the Common Shares which are not so
      registered may bear a restrictive legend in substantially the following
      form (and a stop-transfer order may be placed against transfer of the
      certificates for the Common Shares):

       The securities represented by this certificate have not been registered
       under the Securities Act of 1933, as amended (the "Act").  The securities
       have been acquired for investment and may not be resold, transferred or
       assigned in the absence of an effective registration statement for the
       securities under the Act, or an opinion of counsel reasonably
       satisfactory in form, scope and substance to the Company that
<PAGE>

        registration is not required under the Act.

   (3) Once the Registration Statement required to be filed by the Company has
       been declared effective, thereafter (1) upon request of any Holder the
       Company will substitute certificates without restrictive legend for
       certificates for any Common Shares issued prior to the date such
       Registration Statement is declared effective by the SEC which bear such
       restrictive legend and remove any stop-transfer restriction relating
       thereto promptly, but in no event later than three days after surrender
       of such certificates by such Holder and (2) the Company shall not place
       any restrictive legend on certificates for Conversion Shares issued on
       conversion of or as dividends on the shares of Series F Preferred Stock
       or impose any stop-transfer restriction thereon.

b. Nasdaq Listing; Reporting Status.  As soon as reasonably possible after the
   --------------------------------
   Closing Date and subject to the waiver in Section 5.e, the Company shall file
   an application for listing of additional shares with Nasdaq covering such of
   the Common Shares as shall not previously have been listed for trading on
   Nasdaq and shall provide evidence of such filing to the Holders.  The Company
   shall use its best efforts to obtain the listing, subject to official notice
   of issuance, of such Common Shares and on Nasdaq. So long as the Holder
   beneficially owns any shares of Series F Preferred Stock or Common Shares,
   the Company shall timely file all reports required to be filed with the SEC
   pursuant to Section 13 or 15(d) of the 1934 Act, and the Company shall not
   terminate its status as an issuer required to file reports under the 1934 Act
   even if the 1934 Act or the rules and regulations thereunder would permit
   such termination.

c. Rule 144.  (1) The Company shall not, directly or indirectly, dispute or
   --------
   otherwise interfere with any claim by a holder of shares of Series F
   Preferred Stock that such holder's holding period of such security (and the
   shares of Common Stock issued upon conversion thereof) for purposes of Rule
   144 under the 1933 Act ("Rule 144") relates back (i.e., tacks) to the holding
   period for the Notes; provided, however, that nothing contained in this
   Section 5.c shall obligate the Company or its legal counsel to take a
   position that is inconsistent with the provisions of applicable law or
   regulations and the administrative and judicial interpretations thereof in
   effect from time to time in the future.

   (2) The Company will use its best efforts to provide to the Holder and/or the
       Company's transfer agent an opinion of counsel, within 3 business days of
       receipt of a request for such opinion from the Holder or the transfer
       agent, to the effect that the shares of Common Stock issuable upon
       conversion of the Series F Preferred Stock may be resold without
       registration under the 1933 Act pursuant to Rule 144 thereof based upon
       customary opinions (which may include an opinion of the Law Offices of
       Brian W Pusch, counsel to the Holder, with respect to the tacking under
       Rule 144 of the holding period of the Notes to that of the Series F
       Preferred Shares and, at the time such opinion is requested by the
       Company, the Company shall pay the Holder $5,000 in cash to cover the
       fees and expenses of obtaining such counsel and opinion) and
       representations by or on behalf of the Holder as such opinions or
       representations may be reasonably requested by the Company.

d. Amended and Restated Registration Rights.  The parties hereto agree to enter
   ----------------------------------------
   into the Amended and Restated Registration Rights Agreement as of the
   Effective Date.

e. Waivers.  As of the Effective Date and until the earlier of (i) the Initial
   -------
   Reset Date as defined in the Statement of Resolutions or (ii) January 15,
   2000, the Holder waives (x) any
<PAGE>

   requirement in the Statement of Resolutions or in any related instrument
   (including Section 5.b herein) that the Company reserve a sufficient number
   of shares of Common Stock to permit conversion in full of the outstanding
   shares of Series F Preferred Stock or list such shares with Nasdaq; and (y)
   any rights Holder may have to demand redemption of the Series F Preferred
   Stock based on redemption events, inconvertibility events, repurchase events
   or events of default except those redemption rights that may arise from the
   Company's failure to timely perform its obligations to issue Common Stock
   upon conversion (subject to the limitations in Section 5.f) set forth in
   Section 10 of the Statement of Resolutions; provided, however, that if the
   Closing Date does not occur on or before December 8, 1999, the waivers
   granted herein shall expire and cease to be effective.

f. Agreed Limitation on Conversion.  The Holder agrees that, provided the
   -------------------------------
   Reverse Stock Split Date occurs on or before December 31, 1999, during the
   period commencing with the Reverse Stock Split Date and ending on the Trading
   Day immediately prior to the Initial Reset Date, as those terms are defined
   in the Statement of Resolutions, Holder will not convert Series F Preferred
   Stock into Common Stock in an amount greater than the number of shares of
   Common Stock that the Holder would have had the ability to sell pursuant to
   Rule 144 during such period of time.

g. Call Option.  Until October 13, 2000, the Company shall have the option, but
   -----------
   not the obligation, to repurchase at any time, for a cash payment equal to
   $1,000 per share of Series F Preferred Stock so repurchased, any portion of
   Holder's Series F Preferred Stock that the Company in its sole discretion
   chooses to repurchase, upon 20 days prior written notice of exercise of this
   call option.  This provision shall in no way be construed to limit Holder's
   conversion rights under the Statement of Resolutions prior to such
   repurchase.

h. Shareholder Approval.  The Company agrees to submit as soon as practicable,
   --------------------
   for purposes of Rule 4460 of the NASDAQ, a proposal for approval by
   shareholders of the Company's Common Stock allowing conversion of Series F
   Preferred Stock in amounts greater than the Maximum Share Amount, as such
   term is defined in the Statement of Resolutions.

i. Dividend Calculation.  The Company and Holder agree that dividends on the
   --------------------
   Series F Preferred Stock shall be calculated as specified the Statement of
   Resolutions as if (1) Holder held a certificate in the amount specified in
   Section 1.a as of the Effective Date of this Agreement, and (2) the Statement
   of Resolutions were filed with the Secretary of State of the State of Texas
   as of the Effective Date.  Holder agrees that for all dividends due from the
   Effective Date through Closing under the Statement of Resolutions and not
   previously waived as to payment by any holder of Series F Convertible
   Preferred Stock, such dividends shall not be deemed untimely so long as they
   are paid on or before Closing.

                                  SECTION 6.
            REPRESENTATIONS AND WARRANTIES AND COVENANTS OF HOLDER

The Holder represents and warrants to, and covenants and agrees with, the
Company as follows:

a. Organization and Standing of the Holder. The Holder is a corporation duly
   ---------------------------------------
   organized, validly existing and in good standing under the laws of the
   British Virgin Islands and has all requisite power and authority to own and
   operate its properties, to carry on its business as now conducted and to
   enter into and, as applicable, perform its obligations hereunder.
<PAGE>

b. Purchase for Investment.  The Holder is acquiring the Series F Preferred
   ------------------------
   Shares for its own account for investment only and not with a view towards
   the public sale or distribution thereof;

c. Accredited Investor.  The Holder is an "accredited investor" as that term is
   -------------------
   defined in Rule 501 of the General Rules and Regulations under the 1933 Act
   by reason of Rule 501(a)(3);

d. Reoffers and Resales.  All subsequent offers and sales of the Securities by
   --------------------
   the Holder shall be made pursuant to registration of the Securities being
   offered and sold under the 1933 Act or pursuant to an exemption from
   registration;

e. Company Reliance.  The Holder understands that the shares of Series F
   ----------------
   Preferred Stock are being issued to it in reliance on specific exemptions
   from the registration requirements of United States federal and state
   securities laws and that the Company is relying upon the truth and accuracy
   of, and the Holder's compliance with, the representations, warranties,
   agreements, acknowledgments and understandings of the Holder set forth herein
   in order to determine the availability of such exemptions and the eligibility
   of the Holder to acquire the shares of Series F Preferred Stock;

f. Information Provided.  The Holder and its advisors, if any, have been
   --------------------
   furnished with all materials relating to the business, finances and
   operations of the Company and materials relating to the issuance of the
   shares of Series F Preferred Stock which have been requested by the Holder;
   the Holder and its advisors, if any, have been afforded the opportunity to
   ask questions of the Company and have received satisfactory answers to any
   such inquiries; and the Holder understands that its investment in the shares
   of Series F Preferred Stock involves a high degree of risk;

g. Absence of Approvals.  The Holder understands that no United States federal
   --------------------
   or state agency or any other government or governmental agency has passed on
   or made any recommendation or endorsement of the shares of Series F Preferred
   Stock; and

h. Exchange Agreement.  This Agreement has been duly and validly authorized,
   ------------------
   executed and delivered on behalf of the Holder and is a valid and binding
   agreement of the Holder enforceable in accordance with its terms, subject as
   to enforceability to general principles of equity and to bankruptcy,
   insolvency, moratorium and other similar laws affecting the enforcement of
   creditors' rights generally.

                                  SECTION 7.
                                 MISCELLANEOUS

a. Costs, Expenses and Taxes.  Each party shall bear its own costs and expenses
   -------------------------
   in connection with the preparation, execution and delivery of this Agreement
   and the issuance of the shares of Series F Preferred Stock.  The Company
   shall pay any and all stamp and other taxes payable or determined to be
   payable in connection with the execution and delivery of this Agreement and
   the exchange of the Notes for the shares of Series F Preferred Stock.

b. Survival of Representations.  The representations, warranties, covenants and
   ---------------------------
   agreements of the Holder and the Company contained in this Agreement or in
   any certificate furnished hereunder shall survive the Closing.
<PAGE>

c. Prior Agreements. This Agreement constitutes the entire agreement between
   ----------------
   the parties concerning the subject matter hereof and supersedes any prior
   representations, understandings or agreements.  There are no representations,
   warranties, agreements, conditions or covenants, of any nature whatsoever
   (whether express or implied, written or oral) between the parties hereto with
   respect to such subject matter except as expressly set forth herein. The
   parties acknowledge that certain material terms were agreed to pursuant to
   the Notice of Intent to Exchange Secured Debt dated January 21, 1999 and are
   expressed more fully herein.

d. Severability.  The invalidity or unenforceability of any provision hereof
   ------------
   shall in no way affect the validity or enforceability of any other provision
   or the validity and enforceability of this Agreement in any other
   jurisdiction.

e. GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
   -------------
   ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
   REGARD TO ITS CHOICE OF LAW RULES.

f. Headings. Section headings in this Agreement are included herein for
   --------
   convenience of reference only and shall not constitute a part of, or affect
   the interpretation of, this Agreement.

g. Counterparts.  This Agreement may be executed in any number of counterparts,
   ------------
   all of which taken together shall constitute one and the same instrument, and
   either of the parties hereto may execute this Agreement by signing any such
   counterpart. A facsimile transmission of this Agreement bearing a signature
   on behalf of a party hereto shall be legal and binding on such party.

h. Binding Effect.  This Agreement shall be binding upon and inure to the
   --------------
   benefit of the parties hereto and their respective successors and permitted
   assigns.

i. Further Assurances.  Each party to this Agreement will perform any and all
   ------------------
   acts and execute any and all documents as may be necessary and proper under
   the circumstances in order to accomplish the intents and purposes of this
   Agreement and to carry out its provisions.

j. Publicity.   Neither the Company nor the Holder shall, nor shall they permit
   ---------
   their respective stockholders, directors, officers or advisors to, issue or
   cause the publication of any press release or make any other public
   statement, filing or announcement with respect to this Agreement and the
   transactions contemplated hereby without the prior approval of the other
   parties; provided, however, that the Company shall be entitled, without the
   prior approval of the Holder, to make any press release or other public
   disclosure with respect to such transactions as is required by applicable law
   or the Nasdaq Stock Market (although the Holder shall be consulted by the
   Company in connection with any such press release or other public disclosure
   prior to its release and shall be provided with a copy thereof). The Company
   and the Holder shall cooperate in issuing press releases or otherwise making
   public statements with respect to this Agreement and the transactions
   contemplated hereby, which cooperation shall include first consulting the
   other party hereto concerning the requirement for, and timing and content of,
   such public announcement.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Agreement to be executed by their respective duly authorized
officers, as of the date first above written.

                                 EQUALNET COMMUNICATIONS CORP.

                                 By: /s/ Mitchell Bodian
                                     -------------------
                                     Name: Mitchell Bodian
                                     Title:  President

                                 GENESEE FUND LIMITED - PORTFOLIO B
                                 By: Genesee International Inc.
                                     General Manager

                                 By: /s/ Donald R. Morken
                                     --------------------
                                     Donald R. Morken
                                     President<PAGE>

                                                                   EXHIBIT 10(a)

                        CONSENT OF INDEPENDENT AUDITORS

     We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated February 9, 2000 with respect to the financial
statements of Separate Account VA-1 of The American Franklin Life Insurance
Company and our report dated February 18, 2000, with respect to the financial
statements of The American Franklin Life Insurance Company, in this Post-
Effective Amendment No. 5 to the Registration Statement on Form N-4
(No. 333-10489) under the Securities Act of 1933 and Registration Statement
(No. 811-7781) under the Investment Company Act of 1940 and related Prospectus
and Statement of Additional Information of Separate Account VA-1 of The American
Franklin Life Insurance Company

                                    /s/ ERNST & YOUNG LLP
                                    ERNST & YOUNG LLP

Chicago, Illinois
April 24, 2000

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