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Exhibit 10.2

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of May
20, 2016 by and among Turning Point Brands, Inc., a Delaware corporation (the
“Company”), Daniel Fitzgerald and Peter Parent (the “Noteholders”).

RECITALS

WHEREAS, the Company has effected an initial public offering (the “IPO”) of its
voting common stock, par value $0.01 per share (the “Common Stock”), pursuant to
a registration statement on Form S-1 filed with the U.S. Securities and Exchange
Commission (the “S-1”);

WHEREAS, the Company has issued to the Noteholders, pursuant to that certain
Note Purchase Agreement, dated as of January 22, 2014, by and among North
Atlantic Holding Company, Inc. and the purchasers thereto, 7% Senior Notes due
December 31, 2023 (the “Notes”) in the respective principal amounts set forth
opposite their names on Exhibit A hereto;

WHEREAS, each of the Noteholders has agreed to exchange all of such Noteholder’s
Note(s) for Shares as provided herein.

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

ARTICLE I
EXCHANGE OF NOTES

Section 1.1         Exchange of Notes for Exchange Shares.

(a)         Subject to the terms and conditions set forth in this Agreement,
each Noteholder hereby agrees to exchange (the “Exchange”) at the Closing (as
defined below), all Note(s) held by such Noteholder for the number of shares of
Common Stock set forth opposite such Noteholder’s name on Exhibit A (the
“Exchange Shares”).

(b)         Upon the surrender by each Noteholder of such Noteholder’s Note(s)
in exchange for the Exchange Shares issuable to the Noteholder in the Exchange,
such Note(s) shall be cancelled and the Company’s obligation to pay any amounts
on the Note(s) shall be terminated. Each Noteholder waives all rights to receive
any future payments of principal of or interest on such Noteholder’s Notes from
and after the Closing.
 

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ARTICLE II
CLOSING DATE; DELIVERY

Section 2.1        Closing. The closing (the “Closing”) of the Exchange shall
take place at the offices of Milbank, Tweed, Hadley & McCloy LLP, 28 Liberty
Street, New York, New York 10005, on the date of this Agreement (the “Closing
Date”) substantially simultaneously with the execution and delivery of this
Agreement by the Noteholders and TPB.

Section 2.2         Delivery for the Exchange. At the Closing:

(a)         Each Noteholder shall surrender such Noteholder’s Note(s) duly
endorsed to the Company (and accompanied by appropriate endorsement and transfer
documents) for cancellation; and such Note(s) shall be cancelled by the Company;
and

(b)         The Company shall deliver the Exchange Shares issuable to each
Noteholder by book entry deposit to an account established for such purpose.

Section 2.3          Consummation of Closing. All acts, deliveries and
confirmations comprising the Closing, regardless of chronological sequence,
shall be deemed to occur contemporaneously and simultaneously upon the
occurrence of the last act, delivery or confirmation of the Closing and none of
such acts, deliveries or confirmations shall be effective unless and until the
last of same shall have occurred.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

Section 3.1         Representations and Warranties of Each Party. The Company
and each Noteholder severally and not jointly, with respect to only itself
hereby represents and warrants to the other parties 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 directors of the Company 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 the Notes or
(D) conflict with or result in a breach of or constitute a default under any
provision of any party’s governing documents; and

(iv)       as of the date hereof, no material action, suit or legal,
administrative or arbitral proceeding or investigation 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.

Section 3.2         Representations and Warranties of the Noteholders. Each
Noteholder severally and not jointly, with respect to only itself hereby
represents and warrants to the Company that it:

(i)         owns exclusively, beneficially and of record and has good, valid and
marketable title to such Noteholder’s Note(s) 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 take the actions contemplated by this Agreement with respect to
such Note(s);

(ii)        understands that shares of the Common Stock it will receive in the
Exchange have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”) and are being or will be issued by the Company in a
transaction exempt from the registration requirements of the Securities Act;

(iii)       understands that shares of the Common Stock it will receive in the
Exchange may not be offered or resold except pursuant to an effective
registration statement under the Securities Act or pursuant to an applicable
exemption from registration under the Securities Act; and

(iv)      understands that it is an “accredited investor” as defined in Rule
501(a) of Regulation D under the Securities Act; it or its representative has
had access to the same kind of information concerning the Company that is
required by Schedule A of the Securities Act, to the extent that the Company
possesses such information; has such knowledge and experience in financial and
business matters that it is capable of utilizing the information that is
available to it concerning the Company to evaluate the risks of investment in
the Company including the risk that it could lose its entire investment in the
Company; and consummating the Exchange for its own sole benefit and account for
investment and not with a view to, or for resale in connection with, a public
offering or distribution thereof.
 
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ARTICLE IV
MISCELLANEOUS

Section 4.1        Further Actions. Each party shall, at the written request of
any other party, at any time and from time to time following the Closing,
execute and deliver to such other party all such further instruments and take
all such further action as may be reasonably necessary or appropriate in order
to confirm or carry out its obligations under this Agreement.

Section 4.2         Entire Agreement; Assignment. This Agreement constitutes 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, or any of them, with respect to the subject matter hereof. This
Agreement shall not be assigned (whether pursuant to a merger, by operation of
law or otherwise) except as permitted herein.

Section 4.3        Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.

Section 4.4         Governing Law. 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 such party 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.

Section 4.5        Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the transactions
contemplated hereby. Each of the parties hereto (a) certifies that 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 that foregoing waiver and (b) acknowledges that it and the other
hereto have been induced to enter into this Agreement and the transactions
contemplated hereby, as applicable, by, among other things, the mutual waivers
and certifications in this Section 4.5.

Section 4.6         Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.

Section 4.7         Counterparts. This Agreement may be executed and delivered
(including by facsimile or portable document format (pdf) transmission) in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

Section 4.8         Waiver; Remedies. No delay on the part of any Noteholder or
the Company in exercising any right, power or privilege under this Agreement
shall operate as a wavier thereof, nor shall any waiver on the part of any
Noteholder or the Company of any right, power or privilege under this Agreement
operate as a waiver of any other right, power or privilege of such party under
this Agreement, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege under this Agreement.

Section 4.9        Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this agreement
or to enforce specifically the performance of the terms and provisions hereof in
addition to any other remedy to which they are entitled at law or in equity.

Section 4.10       Amendment. This Agreement may be modified or amended only by
written agreement of each of the parties to this Agreement.

Section 4.11       Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
 
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Section 4.12       Notice. 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 facsimile
or email or by registered or certified mail (postage prepaid, return receipt
requested, provided that the facsimile or email is promptly confirmed by
telephone or email confirmation thereof) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 4.12):

if to the Company:

Turning Point Brands, Inc.
5201 Interchange Way
Louisville, Kentucky 40229
Attention: James Dobbins, Senior Vice President, General Counsel and Secretary
Email: JDobbins@Natcinc.net
with a copy to:

Milbank, Tweed, Hadley & McCloy LLP
28 Liberty Street
New York, New York 10005
Attention: David E. Zeltner, Esq.
Email: DZeltner@milbank.com

If to any Noteholder, at the address set forth beneath such Noteholder’s
signature on the signature pages hereto.

*          *          *
 
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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.

 
TURNING POINT BRANDS, INC.
           
By:
/s/ Mark Stegeman
   
Name:
Mark Stegeman
   
Title:
Senior Vice President and Chief Financial Officer
           
/s/ Daniel Fitzgerald
   
Name:
Daniel Fitzgerald
    Address:      
Email:
               
/s/ Peter Parent
   
Name:
Peter Parent
    Address:      
Email:
 

[Signature Page to Exchange Agreement for Senior Notes to Equity]
 

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Exhibit A
 
Notes

Noteholder
 
Principal Amount
of Note(s)
   
Principal Plus
Accrued and
Unpaid Interest
   
Number of
Exchange Shares
 
Daniel Fitzgerald
 
$
13,885.35
   
$
16,281.33
     
1,629
 
Peter Parent
 
$
3,589.11
   
$
4,208.43
     
421
 

 
 

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