Exhibit 10.4

 

WARRANT PURCHASE AGREEMENT

 

THIS WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of May 10, 2016,
by and between Turning Point Brands, Inc., a Delaware corporation (“TPB”), and
each holder of Warrants (as defined below) listed on the signature pages hereto
(each, a “Holder” and collectively, the “Holders”).

 

W I T N E S S E T H:

 

WHEREAS, the Holders collectively own warrants (the “Warrants”) to purchase in
the aggregate 11,000,000 common units (the “Common Units”) of Intrepid Brands,
LLC, a Delaware limited liability company and indirect subsidiary of TPB
(“Intrepid”) pursuant to that certain Warrant Agreement, dated as of January 21,
2014, by and among Intrepid and the holders of warrants thereunder (the “Warrant
Agreement”); and

 

WHEREAS, TPB proposes to effect an initial public offering of its common stock
(the “IPO”) pursuant to a registration statement on Form S-1 filed with the U.S.
Securities and Exchange Commission (the “S-1”); and

 

WHEREAS, substantially simultaneously with, but immediately following, the IPO,
TPB wishes to purchase the Warrants from the Holders and the Holders wish to
sell the Warrants to TPB, for the consideration and upon the terms and
conditions set forth herein (the “Warrant Purchase”); and

 

WHEREAS, in accordance with Section 7.1 of the Warrant Agreement, the board of
managers of Intrepid has granted its prior written approval to the transfer of
Warrants contemplated hereby.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties intending to be
legally bound, do hereby agree as follows:

 

1.                  Warrant Purchase. Substantially simultaneously with, but
immediately following the IPO, each Holder shall irrevocably sell, transfer,
convey, assign and deliver to TPB, and TPB shall purchase and accept from such
Holder, all of such Holder’s right, title and interest in and to the Warrant set
forth opposite such Holder’s name on Schedule 1 for the aggregate cash purchase
price set forth opposite such Holder’s name on Schedule 1 (such purchase price
being equal to $0.40 per Common Unit subject to such Warrant and the amount
payable pursuant to Schedule 1 to any Holder in respect of such Holder’s Warrant
is referred to herein as such Holder’s “Purchase Price”).

 

2.                  Closing. The closing of the Warrant Purchase shall occur
contemporaneously with the closing of the IPO (the “Closing”) at the offices of
Milbank, Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, New York
10005. At the Closing, TPB shall pay to each Holder such Holder’s Purchase Price
by wire transfer of immediately available funds to the account designated in
writing by such Holder to TPB at least three business days prior to the date of
such Closing, and such Holder shall deliver to TPB at the Closing the
certificate or certificates representing such Warrants together with an
instrument of transfer (substantially in the form attached to the Warrant
Agreement) duly endorsed in blank.

 

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3.                  Representations and Warranties.

 

3.1              Representations and Warranties of Each Party. Each of TPB, on
the one hand, and each of the Holders, on the other hand, hereby represents and
warrants to the other party that:

 

(i)                 such party has all necessary power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the transaction contemplated hereby;

 

(ii)               this Agreement has been duly and validly executed and
delivered by such party and constitutes a legal, valid and binding obligation of
such party enforceable against such party in accordance with its terms;

 

(iii)             the execution, delivery and performance by such party of this
Agreement and the consummation by such party of the transactions contemplated
hereby do not and will not (A) conflict with or violate any United States or
non-United States statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order applicable to such party, (B)
other than the prior written consent of the board of managers of Intrepid to the
transactions contemplated hereby, require any consent, approval or authorization
of, declaration, filing or registration with, or notice to, any person or
entity, (C) result in the creation of any encumbrance on any Warrants or (D) if
such party is not a natural person, conflict with or result in a breach of or
constitute a default under any provision of such party’s governing documents;
and

 

(iv)             as of the date hereof, no material litigation, action or
proceeding by or against such party is pending, or to the knowledge of such
party threatened in writing, which would affect the legality, validity or
enforceability of this Agreement or the consummation of the transactions
contemplated hereby.

 

3.2              Representations and Warranties of each Holder. Each Holder
hereby represents and warrants to TPB that it owns exclusively, beneficially and
of record and has good, valid and marketable title to the Warrant set forth
opposite such Holder’s name on Schedule 1 free and clear of any security
interest, lien, claim, pledge, proxy, option, right of first refusal, agreement,
voting restriction, limitation on disposition, charge, adverse claim of
ownership or use or other encumbrance of any kind and has the full right, power
and authority to sell, transfer and deliver such Warrant, and such Holder does
not own, directly or indirectly, any warrants to purchase common units of
Intrepid other than such Warrant.

 

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4.                  Additional Agreements.

 

4.1              No Sale or Transfer of Warrants. Each Holder covenants and
agrees that, between the date hereof and the Closing, such Holder shall not (a)
exercise any Warrants or (b) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder (each, a “Transfer”), with respect to any Warrants or any
securities convertible into, or exercisable, or exchangeable for, Warrants owned
by him, her or it; provided, however, that the such Holder may Transfer any
Warrants to any of its affiliates that agrees in writing prior to such Transfer
to be bound by the obligations of the Holders under this Agreement.

 

4.2              General Release. In consideration of such Holder’s Purchase
Price, each Holder, on behalf of himself or herself and each of his or her
successors, executors, representatives, agents, estate, heirs, legatees,
devisees, beneficiaries and assigns, hereby forever releases, remises, acquits,
satisfies, and discharges TPB (and any successor thereto) and its affiliates,
and the respective directors, officers, employees, partners, agents, advisors
and representatives thereof, and the respective successors and assigns of the
foregoing (each, a “Releasee”), from any and all manner of actions, claims,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
covenants, contracts, controversies, agreements, promises, damages, judgments,
executions, and demands whatsoever, in law or in equity (collectively,
“Claims”), which the undersigned ever had, now has, or which any successor or
assign of the undersigned hereafter can, shall or may have, against any
Releasee, for, upon or by reason of any matter, cause or thing whatsoever, known
or unknown, directly or indirectly, from the beginning of the world to the
closing of the IPO including, without limitation, Claims arising out of or
related to any (i) breach or alleged breach of fiduciary duty and claims in
tort, and (ii) the Warrants and the Warrant Agreement; except for (x) the right
to receive such Holder’s Purchase Price under this Agreement, (y) the right of
employees to receive accrued compensation and benefits to which they are
entitled from TPB, whether by written employment or bonus agreement or
otherwise, and (z) any Claims arising out of or relating to any actual fraud of
a Releasee.

 

5.                  Termination. In the event the S-1 is withdrawn by TPB for
any reason, this Agreement shall automatically terminate and become null and
void without any further action by the parties.

 

6.                  Miscellaneous.

 

6.1              Further Assurances. TPB and each Holder will take such actions
as may be reasonably required or desirable to carry out the provisions of this
Agreement.

 

6.2              Successors and Assigns. This Agreement and the rights evidenced
hereby shall be binding upon and shall inure to the benefit of the parties
hereto and the successors of TPB and the successors and permitted assigns of
each Holder. Such successors and/or permitted assigns of each Holder shall be
deemed to be a Holder for all purposes hereunder.

 

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6.3              Governing Law; Jurisdiction; No Trial by Jury. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the State of New York’s conflict of law
principles to the extent such principles are not mandatorily applicable by
statute and would require or permit the application of the laws of another
jurisdiction. Each of the parties hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any New
York State court or Federal court of the United States sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims or causes of action
(whether in contract, tort or otherwise) in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.3.

 

6.4              Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or e-mail or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at their addresses as specified on the
signature pages of this Agreement.

 

6.5              Amendments and Waivers. Except as otherwise provided herein,
this Agreement may only be amended, modified or supplemented by an agreement in
writing signed by each party hereto. No waiver by TPB or any Holder of any of
the provisions hereof shall be effective unless explicitly set forth in writing
and signed by the party so waiving. No waiver by any party shall operate or be
construed as a waiver in respect of any failure, breach or default not expressly
identified by such written waiver, whether of a similar or different character,
and whether occurring before or after that waiver. No failure to exercise, or
delay in exercising, any rights, remedy, power or privilege arising from this
Agreement shall operate or be construed as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.

 

6.6              No Third-Party Beneficiaries. This Agreement is for the sole
benefit of TPB and the Holders and their respective successors and, in the case
of each Holder, permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity any legal or equitable right, benefit or
remedy of any nature whatsoever, under or by reason of this Agreement.

 

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6.7              Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

 

6.8              Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.

 

6.9              Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall be
deemed to be one and the same agreement. A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.

 

6.10          Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter hereof.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

  TURNING POINT BRANDS, INC.         By: James Dobbins     Name: James Dobbins  
Title: Senior Vice President, General Counsel and Secretary         Address for
notice:         Turning Point Brands, Inc.
5201 Interchange Way
Louisville, Kentucky 40229
Attention: James Dobbins
Telephone: (502) 778-4421
Email: jdobbins@natcinc.net       

 

 

[Signature Page to Warrant Purchase Agreement]

 

 

 

 

  Helms Management Corp.         By: /s/ Thomas F. Helms, Jr.     Name: Thomas
F. Helms, Jr.   Title: President         Address for notice:        

                                                  

                                                  

                                                  

Attention:                                                   

Telephone:                                                   

Facsimile:                                                   

Email:                                                   

     

 

 

 

 

 

  Lawrence Wexler         /s/ Lawrence Wexler     (Signature)           Address
for notice:        

393 Carter St

New Canaan CT 06840

Attention: L. Wexler

Telephone: 502-439-1516

Facsimile: _____________________

Email: lwexler@tpbi.com

     

 

 

 

 

 

  Michael G. Terry         /s/ Michael G. Terry     (Signature)          
Address for notice:        

9501 Gerdardia Lane

Prospect, KY 40059

Attention: Michael Terry

Telephone: 502-681-2043

Facsimile:                                                   

Email: mterry522@aol.com

     

  

 

 

 

  Graham A. Purdy         /s/ Graham A. Purdy     (Signature)           Address
for notice:        

5201 Interchange Way

Louisville, KY 40229

Attention: Graham Purdy

Telephone: 913-485-6393

Facsimile:                                                   

Email: gpurdy@nationaltobacco.com

     

 

 

 

 

 

  James Dobbins         /s/ James Dobbins     (Signature)           Address for
notice:        

1006 Monmouth Avenue

Durham, NC 27701

Attention: James Dobbins

Telephone: 502-774-9270

Facsimile: 502-774-9223

Email: jdobbins@natcinc.net

     

 

 

 

 

 

  FORT GEORGE INVESTMENTS, LLC       By: Corbin Capital Partners Management, LLC
        By: /s/ Steven Carlino     Name: Steven Carlino

  Title: CFO    

 

  Address for notice:    

 

 

590 Madison Avenue

31st Floor

New York, NY 10022

Attention:                                                   

Telephone:                                                   

Facsimile:                                                   

Email:                                                   

     

 

 

 

 

 

 

  Standard General Focus Fund L.P.         By: /s/ Soohyung Kim     Name:
Soohyung Kim   Title: Managing Partner         Address for notice:        

Standard General

767 5th Ave, 12th Fl

New York, NY 10153

Attention:                                                   

Telephone: 212-257-4701

Facsimile:                                                   

Email:                                                   

     

  

 

 

 

  Standard General Master Fund L.P.         By: /s/ Soohyung Kim     Name:
Soohyung Kim   Title: Managing Partner         Address for notice:        

Standard General

767 5th Ave, 12th Fl

New York, NY 10153

Attention:                                                   

Telephone: 212-257-4701

Facsimile:                                                   

Email:                                                   

 

 

 

 

 

Schedule 1

 

Holder Number of Common Units subject to Warrant Holder’s Purchase Price ($.040
per Common Unit subject to Warrant) Helms Management Corp.
              1,984,598 $793,839.21 Lawrence Wexler                   180,000
$72,000.00 Michael G. Terry                     10,000 $4,000.00 Graham A. Purdy
                    10,000 $4,000.00 James Dobbins                       5,000
$2,000.00 Fort George Investments, LLC               2,836,125.56 $1,134,450.22
Standard General Focus Fund L.P.                     90,511.06 $36,204.42
Standard General Master Fund L.P.               4,491,290.89 $1,796,516.36