Exhibit 10.2

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is dated as of April 3, 2008, by and
among FLO Corporation, a Delaware corporation (the “Company”), and certain
holders of shares of the Company’s Series A Preferred Stock whose signatures
appear on the signature page attached hereto (each a “Holder” and collectively
the “Holders”).

Recitals:

WHEREAS, each Holder currently holds shares of Series A Preferred Stock of the
Company, par value $0.001 per share, convertible into shares of the Company’s
common stock (“Common Stock”) at a conversion price of $2.25 per share (the
“Series A Preferred Shares”), a warrant (the “Series A-1 Warrants”) to purchase
shares of the Company’s Common Stock at an exercise price of $3.00 per share
with a term of five (5) years, and a warrant (the “Series A-2 Warrants”, and
together with the Series A-1 Warrants, the “Warrants”) to purchase shares of the
Company’s Common Stock at an exercise price of $4.00 per share with a term of
five (5) years, each issued pursuant to that certain Series A Preferred Stock
Purchase Agreement dated as of July 3, 2007, August 24, 2007 or September 13,
2007, by and among the Company and the Holders (the “Series A Purchase
Agreement”); and

WHEREAS, subject to the terms and conditions set forth herein, the Company and
the Holders desire to cancel and retire the Series A Preferred Shares, to
forfeit any and all rights under the Series A Purchase Agreement and the terms,
rights and preferences of the Series A Preferred Stock as set forth in the
Company’s Amended and Restated Certificate of Incorporation filed with the
Delaware Secretary of State on July 3, 2007 (the “Certificate of
Incorporation”), in exchange for the following for each Series A Preferred Share
issued and outstanding (together with the right to receive any dividend accrued
on such share): (i) the receipt of the Per-Share Series B Number (as defined
below) of shares of the Company’s newly issued Series B Preferred Stock, par
value $0.001 per share, with substantially the terms attached hereto as Exhibit
A (the “Series B Preferred”); (ii) the reduction of the exercise price of the
Series A-1 Warrants held by each Holder to $1.50 per share (the “Revised Series
A-1 Warrants”); (iii) the reduction of the exercise price of the Series A-2
Warrants held by each Holder to $2.00 per share (the “Revised Series A-2
Warrants,” together with the Revised Series A-1 Warrants, the “Revised
Warrants”); (iv) the addition of a beneficial ownership cap (the “Ownership
Cap”) to the Revised Warrants that is substantially similar to that set forth in
Section 7 of the Short-Term Warrants (as defined below) and (v) the receipt of
warrants, in substantially the form attached hereto as Exhibit D (the
“Short-Term Warrants”), to purchase a number of shares of Common Stock equal to
the Per-Share Warrant Number (as defined below), provided that the aggregate
number of shares of Common Stock initially underlying each Holder’s Short-Term
Warrants shall be rounded down to the nearest whole share. The Series B
Preferred, the Revised Warrants and the Short-Term Warrants are sometimes
collectively referred to herein as the “Securities.”

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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby agreed and acknowledged, the parties hereby agree as
follows:

AGREEMENT:

1. Securities Exchange.

(a) Upon the following terms and subject to the conditions contained herein, the
Holders agree to deliver to the Company the Series A Preferred Shares in
exchange for the Securities. In consideration of and in express reliance upon
the representations, warranties, covenants, terms and conditions of this
Agreement, the Company agrees to issue and deliver the Securities to the Holders
in exchange for the Series A Preferred Shares.

(b) The closing under this Agreement (the “Closing”) shall take place at the
offices of DLA Piper US LLP, 701 5th Ave. Suite 7000, Seattle, WA, upon the
satisfaction of each of the conditions set forth in Sections 4 and 5 hereof (the
“Closing Date”).

(c) At the Closing, the Holders shall deliver to the Company for cancellation
all certificates evidencing all Series A Preferred Shares held by Holder, or an
indemnification undertaking with respect to such certificates in the event of
the loss, theft or destruction of such certificates. At the Closing, the Company
shall issue to the each Holder (i) certificates evidencing the Per-Share Series
B Number of shares of Series B Preferred for each Series A Preferred Share
exchanged, (ii) an amendment to the outstanding Series A-1 Warrants giving
effect to the reduced exercise price equal to $1.50 per share and adding the
Ownership Cap, (iii) an amendment to the outstanding Series A-2 Warrants giving
effect to the reduced exercise price equal to $2.00 per share and adding the
Ownership Cap, and (iv) Short Term Warrants to purchase the Per-Share Warrant
Number of shares of Common Stock for each Series A Preferred Share exchanged
(provided, that the aggregate number of shares of Common Stock initially
underlying each Holder’s Short-Term Warrant shall be rounded down to the nearest
whole share), each in the amounts set forth on Exhibit B attached hereto.

(d) The “Dividend Amount” for a Series A Preferred Share means the dividend
accrued to the date hereof on such share. The “Per-Share Series B Number” with
respect to a Series A Preferred Share means one plus a fraction equal to the
quotient obtained by dividing the Dividend Amount for such share by $9,000. The
“Per-Share Warrant Number” with respect to a Series A Preferred Share means
9,000 plus the quotient obtained by dividing the Dividend Amount for such share
by $1.00.

2. Representations, Warranties and Covenants of the Holders. Each of the Holders
hereby makes the following representations and warranties to the Company, and
covenants for the benefit of the Company, with respect solely to itself and not
with respect to any other Holder:

(a) If a Holder is an entity, such Holder is a corporation, limited liability
company or partnership duly incorporated or organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization.

 

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(b) This Agreement has been duly authorized, validly executed and delivered by
each Holder and is a valid and binding agreement and obligation of each Holder
enforceable against such Holder in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and each
Holder has full power and authority to execute and deliver this Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.

(c) Each Holder understands that the Securities are being offered and sold to it
in reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of each Holder set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act of 1933, as amended (the “Securities Act”) and applicable
state securities laws.

(d) Each Holder is an “accredited investor” as defined under Rule 501 of
Regulation D promulgated under the Securities Act.

(e) Each Holder is and will be acquiring the Securities for such Holder’s own
account, for investment purposes, and not with a view to any resale or
distribution in whole or in part, in violation of the Securities Act or any
applicable securities laws.

(f) The offer and sale of the Securities is intended to be exempt from
registration under the Securities Act, by virtue of Section 3(a)(9) and/or 4(2)
thereof. Each Holder understands that the Securities purchased hereunder are
“restricted securities,” as that term is defined in the Securities Act and the
rules thereunder, have not been registered under the Securities Act, and that
none of the Securities can be sold or transferred unless they are first
registered under the Securities Act and such state and other securities laws as
may be applicable or the Company receives an opinion of counsel reasonably
acceptable to the Company that an exemption from registration under the
Securities Act is available (and then the Securities may be sold or transferred
only in compliance with such exemption and all applicable state and other
securities laws).

(g) Each Holder owns and holds, beneficially and of record, the entire right,
title, and interest in and to the Series A Preferred Shares and Warrants set
forth opposite such Holder’s name on Exhibit B, free and clear of all rights and
Encumbrances (as defined below). Each Holder has full power and authority to
vote, transfer and dispose of the Series A Preferred Shares and Warrants set
forth opposite such Holder’s name on Exhibit B, free and clear of any right or
Encumbrance other than restrictions under the Securities Act and applicable
state securities laws. Other than the transactions contemplated by this
Agreement, there is no outstanding vote, plan, pending proposal, or other right
of any person to acquire all or any of the Series A Preferred Shares and
Warrants set forth opposite such Holder’s name on Exhibit B. “Encumbrances”
shall mean any security or other property interest or right, claim, lien,
pledge, option, charge, security interest, contingent or conditional sale, or
other title claim or retention agreement, interest or other right or claim of
third parties, whether perfected or not perfected, voluntarily incurred or
arising by operation of law, and including any agreement (other than this
Agreement) to grant or submit to any of the foregoing in the future. The Series
A Preferred Shares set forth opposite such Holder’s name on Exhibit B and
delivered hereunder constitute all of the Series A Preferred Shares owned of
record or beneficially by Holder.

 

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(h) Each Holder acknowledges that it has carefully reviewed and had access to
and has reviewed all documents and records relating to the Company, including,
but not limited to, the Company’s Registration Statement on Form 10-SB, as
amended, filed with the Securities and Exchange Commission (the “Commission”) on
December 11, 2007, and the Company’s Current Reports on Form 8-K filed with the
Commission, that it has deemed necessary in order to make an informed investment
decision with respect to the transactions contemplated by this Agreement, and
has had the opportunity to ask representatives of the Company certain questions
and request certain additional information regarding the terms and conditions of
the transactions contemplated by this Agreement, the finances, operations,
business and prospects of the Company and has had any and all such questions and
requests answered to its satisfaction.

3. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to each Holder, and covenants for the benefit of each
Holder, as follows:

(a) The Company has been duly incorporated and is validly existing and in good
standing under the laws of the state of Delaware, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as currently conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to register or qualify would not have a
Material Adverse Effect. For purposes of this Agreement, “Material Adverse
Effect” shall mean any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and its
subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any material respect.

(b) The Securities have been duly authorized by all necessary corporate action
and, when paid for or issued in accordance with the terms hereof, the Securities
shall be validly issued and outstanding, fully paid and nonassessable, free and
clear of all liens, encumbrances and rights of refusal of any kind.

(c) This Agreement has been duly authorized, validly executed and delivered on
behalf of the Company and is a valid and binding agreement and obligation of the
Company enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver this Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.

(d) The execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement by the Company will not (i) conflict
with or result in a breach of or a default under any of the terms or provisions
of, (A) the Certificate of Incorporation or Bylaws of the Company, or (B) of any
material provision of any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company is a party or by which it or any of
its material properties or assets is bound, (ii) result in a violation of any
provision of any law, statute, rule, regulation, or any existing applicable
decree, judgment or

 

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order by any court, Federal or state regulatory body, administrative agency, or
other governmental body having jurisdiction over the Company, or any of its
material properties or assets or (iii) result in the creation or imposition of
any material lien, charge or encumbrance upon any material property or assets of
the Company or any of its subsidiaries pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be bound
or to which any of their property or any of them is subject except in the case
of clauses (i)(B), (ii) or (iii) for any such conflicts, breaches, or defaults
or any liens, charges, or encumbrances which would not have a Material Adverse
Effect.

(e) Assuming the accuracy of each Holder’s representations and warranties set
forth in this Agreement, the delivery and issuance of the Securities in
accordance with the terms of this Agreement will be exempt from the registration
requirements of the Securities Act.

(f) No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Agreement or the offer,
sale or issuance of the Securities or the consummation of any other transaction
contemplated by this Agreement (other than any filings, consents and approvals
which may be required to be made by the Company under applicable state and
federal securities laws, rules or regulations).

(g) The Company has complied and will comply with all applicable federal and
state securities laws in connection with the offer, issuance and delivery of the
Securities hereunder. Neither the Company nor anyone acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to buy
any of the Securities, or similar securities to, or solicit offers with respect
thereto from, or enter into any preliminary conversations or negotiations
relating thereto with, any person, or has taken or will take any action so as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws. Neither
the Company nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of any of the Securities.

(h) The Company represents that it has not paid, and shall not pay, any
commissions or other remuneration, directly or indirectly, to any Holder or to
any third party for the solicitation of the exchange of the Series A Preferred
Shares pursuant to this Agreement.

(i) The Company covenants and agrees that promptly following the Closing Date,
all outstanding Series A Preferred Shares delivered pursuant to this Agreement
and similar Agreements will be cancelled and retired by the Company.

4. Conditions Precedent to the Obligation of the Company to Issue the
Securities. The obligation hereunder of the Company to issue and deliver the
Securities to each Holder is subject to the satisfaction or waiver, at or before
the Closing Date, of each of the conditions set forth below. These conditions
are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion.

(a) Each Holder shall have executed and delivered this Agreement.

 

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(b) Each Holder shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Holder at or prior
to the Closing Date.

(c) The representations and warranties of each Holder shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

(d) The Company shall have received copies of an Acknowledgement and Waiver
substantially in the form attached as Exhibit C hereto executed by the holders
of record of at least a majority of the Series A Preferred Shares issued and
outstanding.

5. Conditions Precedent to the Obligation of the Holders to Accept the
Securities. The obligation hereunder of each Holder to accept the Securities is
subject to the satisfaction or waiver, at or before the Closing Date, of each of
the conditions set forth below. These conditions are for each Holder’s sole
benefit and may be waived by each Holder at any time in its sole discretion.

(a) The Company shall have executed and delivered this Agreement.

(b) The Company shall have filed the Certificate of Designation of the Series B
Preferred with the Delaware Secretary of State, in substantially the form
attached hereto as Exhibit A.

(c) The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.

(d) Each of the representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time, except for representations and warranties that
speak as of a particular date, which shall be true and correct in all material
respects as of such date.

(e) No statute, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement at or prior to the Closing Date.

(f) As of the Closing Date, no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, shall be pending against or
affecting the Company, or any of its properties, which questions the validity of
this Agreement or the transactions contemplated thereby or any action taken or
to be taken pursuant thereto. As of the Closing Date, no action, suit, claim or
proceeding before or by any court or governmental agency or body, domestic or
foreign, shall be pending against or affecting the Company, or any of its
properties, which, if adversely determined, is reasonably likely to result in a
Material Adverse Effect.

 

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(g) The Company shall have received copies of an Acknowledgement and Waiver
substantially in the form attached as Exhibit C hereto executed by the holders
of record of at least a majority of the Series A Preferred Shares issued and
outstanding.

6. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of New York without
giving effect conflicts of law principles that would result in the application
of the substantive laws of another jurisdiction. Each of the parties consents to
the exclusive jurisdiction of the Federal courts whose districts encompass any
part of the County of New York located in the City of New York in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions.
Each party waives its right to a trial by jury. Each party to this Agreement
irrevocably consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at its address set forth herein. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law.

7. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, express overnight courier,
registered first class mail, or telecopier (provided that any notice sent by
telecopier shall be confirmed by other means pursuant to this Section 7),
initially to the address set forth below, and thereafter at such other address,
notice of which is given in accordance with the provisions of this Section.

(a) if to the Company:

FLO Corporation

14000 Thunderbolt Place, Building R Chantilly, VA 20151

Attention: Chief Executive Officer

Tel. No.: (425) 278-1247

Fax No.: (425) 278-1299

with a copy to:

DLA Piper US LLP

701 5th Ave, Suite 7000

Seattle, WA 98104

Attention: W. Michael Hutchings, Esq.

Tel No.: (206) 839-4824

Fax No.: (206) 839-4801

(b) if to the Holders:

At the address of such Holder set forth on Exhibit B to this Agreement.

 

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All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; when receipt is acknowledged,
if telecopied; or when actually received or refused if sent by other means.

8. Confidentiality. Holder acknowledges and agrees that that the existence of
this Agreement and the information contained herein and in the Exhibits hereto
is of a confidential nature and shall not, without the prior written consent of
the Company, be disclosed by Holder to any person or entity, other than Holder’s
personal financial and legal advisors for the sole purpose of evaluating an
investment in the Company, and that it shall not, without the prior written
consent of the Company, directly or indirectly, make any statements, public
announcements or release to trade publications or the press with respect to the
subject matter of this Agreement. Holder further acknowledges and agrees that
the information contained herein and in the other documents relating to this
transaction may be regarded as material non-public information under United
States federal securities laws, and that United States federal securities laws
prohibit any person who has received material non-public information relating to
the Company from purchasing or selling securities of the Company, or from
communicating such information to any person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell securities
of the Company. Accordingly, until such time as any such non-public information
has been adequately disseminated to the public, Holder shall not purchase or
sell any securities of the Company, or communicate such information to any other
person.

9. Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This Agreement may
not be amended or any provision hereof waived in whole or in part, except by a
written amendment signed by both of the parties.

10. Counterparts. This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.

 

FLO CORPORATION By:   /s/ Glenn L. Argenbright   Name: Glenn L. Argenbright  
Title:   CEO HOLDER: By:   /s/   Name:   Title: