instruction:
In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.
question:
PHOTO RETOUCHING OUTSOURCING AGREEMENT

Between: DGT Corp. Suite 207 - 1130 Austin Avenue, Coquitlam, British Columbia, Canada V3K 3P5 (hereinafter referred to as DGT)

And: Dolphin Industries Limited Room 1302 Golden Gate Commercial Bldg 136 Austin Road Tsimshatsui, Hong Kong (hereinafter referred to as Dolphin)

WHEREAS:

DGT is an internet provider of professional digital photo-editing services for photography studios and digital photo processors.

Both parties are desirous of entering into this Agreement regarding the outsourcing of photo-editing services of DGT's clients in the North American market place and elsewhere.

NOW THEREFORE THIS AGREEMENT WITNESSETH that both parties agrees as follows: 1.DGT shall pay Dolphin USD10,000, for carrying out the beta testing of the quality of their photo-editing services and testing of the Internet bandwidth for file transmission. This amount is to be paid in two monthly installments, USD5,000 on the date of this Agreement and USD5,000, 30 days subsequent to the date of this Agreement; 2.Upon successful completion of the beta testing stage, DGT will guarantee Dolphin the greater of: (1) USD5,000 for each 30 day period of photo-editing work completed for a total of 90 days (payment to be effective 30 days from the successful completion of the beta tests); or (2) a minimum of 3,300 pictures to be edited for each 30 day period for a total of 90 days at USD1.50 per finished digital photo; 3.Dolphin agrees to complete its photo-editing services within 14 days of receiving the original digital photo files. The completed files must meet DGT pre-defined standards for finished products; 4.Dolphin shall charge DGT USD1.50 per delivered, completed photo. The price per unit shall be open to renegotiation - in response to competitive pricing pressures - upon receipt of written notice at any time by either party;     Page 1 of 5





    5.Dolphin will provide photo-editing services exclusively, at DGT option, when the number of downloaded photos to be edited by Dolphin totals 50,000 in a single year; 6.Dolphin acknowledges that it is illegal to copy or reproduce these photographs, including but not limited to electronic reproduction, without DGT expressed permission, and any violation will be subject to civil and criminal penalties.   WHEREAS BOTH PARTIES AGREE FURTHER TO THE TERMS AND CONDITONS AS FOLLOWS:   Indemnity And Limitation of Liability:    Dolphin hereby indemnifies, holds harmless and defends DGT, its Board of Directors, officers, and agents against any and all claims (including all legal fees and disbursements incurred in association therewith) arising out of the exercise of any rights under this Agreement including, without limiting the generality of the foregoing, against any damages or losses, consequential or otherwise, arising from or out of the use of DGT's products under this Agreement by Dolphin or their customers or end-users howsoever the same may arise.   DGT's total liability, whether under the express or implied terms of this Agreement, in tort (including negligence), or at common law, for any loss or damage suffered by Dolphin, whether direct, indirect or special, or any other similar or like damage that may arise or does arise from any breaches of this Agreement by DGT and its Directors, Officers or agents, shall be limited to the amount of the cost of the products.   In no event shall DGT be liable for consequential or incidental damages arising from any breach or breaches of this Agreement.   No action, whether in contract or tort (including negligence), or otherwise arising out of or in connection with this Agreement, may be brought by Dolphin more than six months after the cause of action has occurred.   Right of photo   Records:   Dolphin shall maintain at its principal place of business, or such other place as may be most convenient, separate accounts and records of all services provided to DGT, such accounts and records to be in sufficient detail to enable proper returns to be made under this Agreement.   Dolphin shall deliver to DGT on the date 30 days after each and every year a detailed photo-editing report on all services provided on a unit basis (i.e. customer number, file number, cost).     Page 2 of 5





    The calculation shall be carried out in accordance with generally accepted U.S. accounting principles (GAAP), or the standards and principles adopted by the U.S. Financial Accounting Standards Board (FASB) applied on a consistent basis.   During the term of this Agreement, and thereafter, Dolphin shall use reasonable efforts to ensure that all information provided to DGT or its representatives pursuant to this Article remains confidential and is treated as such by DGT.   Governing Law And Arbitration:   This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, USA in force therein without regard to its conflict of law rules. All parties agree that by executing this Agreement they have attorned to the jurisdiction of the Supreme Court of the United States. The Supreme Court shall have exclusive jurisdiction over this Agreement.   In the event of any dispute arising between the parties concerning this Agreement, its enforceability or the interpretation thereof, the same shall be settled by a single arbitrator appointed pursuant to the provisions of the Commercial Arbitration Act of the State of Nevada, or any successor legislation then in force. The language to be used in the arbitration proceedings shall be English.   Notices:   All payments, reports and notices or other documents that any of the parties hereto are required or may desire to deliver to any other party hereto may be delivered only by personal delivery or by registered or certified mail, telex or fax, all postage and other charges prepaid, at the address for such party set forth below or at such other address as any party may hereinafter designate in writing to the others. Any notice personally delivered or sent by telex or fax shall be deemed to have been given or received at the time of delivery, telexing or faxing. Any notice mailed as aforesaid shall be deemed to have been received on the expiration of five days after it is posted, provided that if there shall be at the time of mailing or between the time of mailing and the actual receipt of the notice a mail strike, slow down or labour dispute which might affect the delivery of the notice by the mails, then the notice shall only be effected if actually received.   Termination:   DGT shall be entitled to terminate this Agreement if Dolphin fails to meet its requirements and material obligation hereunder and only after DGT have given Dolphin written notice of such failure and only after Dolphin has not rectified such failure within 10 days of the notice. Dolphin shall be entitled to terminate this Agreement only after DGT fails to meet a material obligation hereunder and only after Dolphin has given DGT written notice of such failure and only after the DGT has not rectified such failure within 30 days of the notice.     Page 3 of 5





    General:   1.Dolphin shall be entitled to defer any obligation hereunder in the event of force majeure, where force majeure is defined as an act of God, war, revolution, insurrection, riot, blockade or any other unlawful act against public order or authority, strike, lockout or other industrial disturbance, storm, fire, flood, explosion or lightning, the failure to obtain the approval or any government, governmental agency, commission, board or other tribunal having jurisdiction, and any other event not reasonably within the control of Dolphin;   2.Any notice, demand, payment or other communication (collectively the Correspondence) to be given hereunder shall be in writing and shall be delivered to the address or fax number of the party appearing herein;   3.Both parties shall do all such things and execute all such written materials as may be required to carry out the full intent and meaning of this Agreement; and   4.This is the entire Agreement between the parties in respect of the matter referred to herein and no amendment or interpretation of this Agreement will be binding on the parties unless same is in writing executed by the parties hereto.   5.Dolphin shall permit any duly authorized representative of DGT, during normal business hours and at DGT's sole risk and expense, to enter upon and into any premises of Dolphin for the purpose of inspecting the service.   6.Nothing contained herein shall be deemed or construed to create between the parties hereto a partnership or joint venture. No party shall have the authority to act on behalf of any other party, or to commit any other party in any manner or cause whatsoever or to use any other party's name in any way not specifically authorized by this Agreement. No party shall be liable for any act, omission, representation, obligation or debt of any other party, even if informed of such act, omission, representation, obligation or debt.   7.Subject to the limitations hereinbefore expressed, this Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.   8.No condoning, excusing or overlooking by any party of any default, breach or non-observance by any other party at any time or times in respect of any covenants, provisos or conditions of this Agreement shall operate as a waiver of such party's rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance, so as to defeat in any way the rights of such party in respect of any such continuing or subsequent default or breach, and no waiver shall be inferred from or implied by anything done or omitted by such party, save only an express waiver in writing.   9.No exercise of a specific right or remedy by any party precludes it from or prejudices it in exercising another right or pursuing another remedy or maintaining an action to which it may otherwise be entitled either at law or in equity.     Page 4 of 5





    10.Marginal headings as used in this Agreement are for the convenience of reference only and do not form a part of this Agreement and are not be used in the interpretation hereof.   11.If any Article, part, section, clause, paragraph or subparagraph of this Agreement shall be held to be indefinite, invalid, illegal or otherwise voidable or unenforceable, the entire Agreement shall not fail on account thereof, and the balance of this Agreement shall continue in full force and effect.   12.Time shall be of the essence of this Agreement.   13.Whenever the singular or masculine or neuter is used throughout this Agreement the same shall be construed as meaning the plural or feminine or body corporate when the context or the parties hereto may require.     IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement on the 1st  day of JUNE , 2006 , but effective as of the Date of Commencement.   SIGNED FOR AND ON BEHALF of DGT CORP.   ) by its duly authorized officers: )   ) ) /s/ Norman Joe, President ) Authorized Signatory )   ) SIGNED FOR AND ON BEHALF of DOLPHIN INDUSTRIES LIMITED ) ) by its duly authorized officers: )   )   ) /s/ Chung-Keung Ho, President/Director ) Authorized Signatory ) 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
answer:
2968


question:
1                                                                   EXHIBIT 10.4

                           SPONSORSHIP AGREEMENT                               ---------------------

               This Sponsorship Agreement is made between National Processing Company (NPC) and National City Bank of Kentucky (NCB) effective June 30, 1996 (Effective Date).

                                WITNESSETH:

               WHEREAS, NCB is a member in good standing of Visa U.S.A., Inc. (Visa) and a member in good standing of MasterCard International, Incorporated (MasterCard); and

               WHEREAS, NPC, pursuant to its arrangements with NCB, a member of Visa and MasterCard, provides data processing, settlement and authorization services for merchants who participate in the Visa and MasterCard bankcard programs (such activities being referred to as Merchant Bankcard Business); and

               WHEREAS, NPC and NCB have concluded that it is in their mutual best interests for NPC to continue to act as an agent of NCB for purposes of providing data processing, settlement and authorization services for merchants with respect to their Visa and MasterCard transactions and in connection with such agency arrangement, for NPC to continue to use NCB for certain banking relationships; and

               WHEREAS, the parties desire to formalize the terms and conditions on which NPC will act as agent of NCB, and NPC will perform certain functions, for purposes of conducting Merchant Bankcard Business;

             NOW, THEREFORE, in consideration of the premises, the representations, acknowledgments, and mutual agreements set out in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, NPC and NCB represent, acknowledge and agree as follows:

     ARTICLE I - MERCHANT PROCESSING, SETTLEMENT AND AUTHORIZATION SERVICES         ----------------------------------------------------------------------

               1.1 APPOINTMENT AS AGENT. NCB appoints NPC, and NPC agrees to serve, as NCB's sole agent (i) to provide authorization, processing and settlement services with respect to Visa and MasterCard transactions (Merchant Processing Services) to merchants who desire to receive Merchant Processing Services from NCB or NPC (Merchants) and (ii) to enter into contracts with merchants (Merchant Contracts) for the provision of Merchant Processing Services as agent of NCB; provided, however, that nothing herein shall limit NPC's right to provide, as agent for other members of Visa and MasterCard, Merchant Processing Services to merchants who desire to receive such services from NCB or others. NCB agrees that NPC may use NCB's name and its BIN, ICA and any other Visa and MasterCard identification numbers to the extent necessary or appropriate to perform the Merchant Processing Services.

               1.2 PERFORMANCE BY NPC. NPC shall have full responsibility for the proper performance of the Merchant Processing Services under each Merchant Contract except for the obligations and responsibilities which NCB assumes hereunder. Without limiting the foregoing, NPC shall provide authorization services to the Merchants, perform data capture services with respect to all credit card transactions by the Merchants, submit such data to the applicable Interchange, process retrievals and chargebacks, and direct the settlement of such transactions. In providing Merchant Processing Services, NPC agrees to comply with: (i) all Visa and MasterCard Bylaws, Manuals, Operating Regulations and other written materials as they may from time to time be amended which bind or apply to NCB as a member of Visa and MasterCard with respect to Merchant Processing Services or to NPC as a third party processor with respect to Merchant Processing Services (Rules), (ii) all agreements between Merchants and NCB with respect to Merchant Processing Services, and (iii) all applicable laws and regulations, whether state or federal. NPC agrees to enter into any agreements with Visa and MasterCard necessary to perform this Agreement

                                    1    2

in accordance with its terms, subject to the rights of NPC to terminate this Agreement pursuant to Section 6.2. Without in any way limiting the foregoing, NPC agrees as follows: (a) any material containing any of the Visa Card Program Marks used by it in performing this Agreement will prominently identify NCB by name and city adjacent to such marks and, in identifying NPC, will specify that NPC is acting as agent or representative of NCB; (b) any solicitation material used by NPC shall clearly disclose that NPC is acting as agent or representative of NCB; and (c) NPC acknowledges that it does not have authority to permit the use of Visa Card Program Marks by any of its own agents. NPC and NCB agree that the foregoing clauses shall be deemed modified from time to time to reflect any changes in Visa's requirements applicable to NPC's use of Visa Card Program Marks and solicitation material or to the terms required herein.





               1.3 MERCHANT CONTRACTS. NPC, as agent of NCB, shall be responsible for establishing the terms and conditions of the Merchant Contracts, including all changes thereunder, subject to Section 1.7 below. Without in any way limiting the authority granted in Section 1.1, NCB hereby authorizes NPC to use NCB's name to the extent necessary or appropriate in accordance with the terms of this Agreement to enter into and to renew Merchant Contracts, to modify Merchant Contracts to the extent necessary to assign them to NCB, to perform the Merchant Contracts and to take other necessary or appropriate actions with respect to the Merchant Contracts, all in accordance with requirements of Visa and MasterCard. As between NPC and NCB, NPC shall be responsible for all credit, fraud and other risks associated with each Merchant Contract.

               1.4 AUTHORIZATION SERVICES. NPC, or its designated third parties, shall provide the Merchants with telephonic or electronic authorization for all Visa and MasterCard transactions exceeding any floor amount specified pursuant to such Merchant's contract.

               1.5 PROCESSING AND SUBMISSION TO INTERCHANGE. NPC shall process all data received by it reflecting the Visa and MasterCard sales transactions and any related return credits by the Merchants and shall submit to the applicable Visa or MasterCard interchange networks (Interchange) Settlement Files reflecting such transactions and directing the applicable Interchange to pay the net amount due to an account established by NCB for the purpose of receiving all settlement amounts paid by Visa and MasterCard with respect to the transactions processed by NPC pursuant to this Agreement and effecting appropriate payments to the Merchants and NPC in accordance with this Agreement (the NCB Account).

               1.6 ACCOUNT SETTLEMENT.

               (a) PAYMENT INSTRUCTIONS. NPC shall prepare and transmit to          NCB, in a mutually acceptable format, instructions specifying the          payments to be made from the NCB Account to the Merchants and to NPC          pursuant to this Agreement (the Payment Instructions). Payment          Instructions shall be delivered to NCB in accordance with the schedule          and procedures established from time to time by the parties.

               (b) PAYMENT. In accordance with the Payment Instructions, NCB          shall pay the Merchants on a timely basis the net settlement amounts          due to them and shall credit NPC's account at NCB for the fees due to          NPC hereunder. Such payments to Merchants shall be effected through          mutually acceptable procedures which are consistent with the payment          procedures established pursuant to the Merchant Contracts. NPC shall          perform on NCB's behalf all of the administrative and bookkeeping          functions necessary to effect payment in such manner.

               1.7 DUE DILIGENCE BY NCB; NPC'S STANDARDS.

               (a) DUE DILIGENCE PRIOR TO EXECUTION OF AGREEMENT. Senior          management officials of NPC have met with senior management officials          of NCB and have discussed with the NCB officials the credit and          financial review procedures and standards used by NPC in deciding          whether to accept or retain Merchants as customers for Merchant          Processing Services, as well as NPC's experience with respect to any          losses resulting from financial failures or fraud by its merchant          customers. Schedule A attached hereto outlines the credit and financial          review procedures and standards currently used by NPC. NPC represents

                                    2    3

      to NCB, and has provided NCB's senior management with financial          information showing, that for 1994 and 1995 combined, the losses          incurred by NPC as a result of financial failures or fraud by its          merchant customers have averaged less than .60% of NPC's net revenues          from Merchant Processing Services.

               (b) CONTINUING DUE DILIGENCE: NPC'S RISK STANDARDS. NPC shall          keep NCB's senior management advised of any material changes in the          credit and financial review procedures and standards and of any          material exceptions to such procedures and standards which may from          time to time be made with respect to particular Merchants. NPC shall          not make any such changes or exceptions until its management committee          has approved such changes or exceptions after carefully evaluating the          relative advantages and disadvantages expected to result from such          changes or exceptions. NPC also shall continue to advise senior          management officials of NCB on a timely basis with respect to any          substantial loss (meaning any loss of $1,000,000 or more with respect          to a single Merchant or $3,000,000 or more in the aggregate in any          twelve month period) incurred by NPC as a result of any financial          failures or fraud by its merchant customers. If NCB's senior management          officials reasonably determine from time to time that any changes are          needed in NPC's credit and financial review procedures and standards or          in the implementation thereof in order to avoid any significant          increase in NPC's losses from financial failures or fraud by its          merchant customers, then NCB shall so notify NPC in writing, and NPC          and NCB shall mutually agree upon, and NPC shall implement appropriate          changes.

               (c) DUE DILIGENCE BY NCB FOR NPC PRICING STANDARDS. Senior          management officials of NPC have met with senior management officials          of NCB and have discussed with the NCB officials the pricing procedures          and standards used for Merchants as customers for Merchant Processing          Services. NPC shall keep NCB's senior management advised of any





      material changes in its pricing procedures and standards and of any          material exceptions to such procedures and standards which may from          time to time be made with respect to particular Merchants. NPC shall          not make any such changes or exceptions until its management committee          has approved such changes or exceptions after carefully evaluating the          relative advantages and disadvantages expected to result from such          changes or exceptions. If NCB's senior management officials reasonably          determine from time to time that any changes are needed in NPC's          pricing procedures and standards or in the implementation thereof, then          NCB shall so notify NPC in writing, and NPC and NCB shall mutually          agree upon, and NPC shall implement appropriate changes.

                 ARTICLE II - AUTHORITY OF JOINT OFFICERS                     ----------------------------------------

               2.1 JOINT OFFICERS. In order to enhance NPC's effectiveness as an agent of NCB, the parties agree and acknowledge that it is desirable for one or more officers of NPC to serve also as an officer of NCB (the Joint Officers) so that such persons shall have clear authority to represent NCB on matters relating to Merchant Processing Services. Accordingly, the Board of Directors of NCB shall elect the NPC officers named in Schedule B as Contracting Officers of NCB only with respect to matters pertaining to Merchant Processing Services. From time to time during the term of this Agreement, the Board of Directors of NCB may elect other officers of NPC as officers of NCB in addition to or in lieu of the Joint Officers. The authority of each Joint Officer to act as an officer of NCB shall terminate immediately upon termination of this Agreement or the termination or suspension of employment of that person by NPC for whatever reason or the removal of that person by the Board of Directors of NCB as an officer of NCB.

               2.2 AUTHORITY TO REPRESENT NCB. Each Joint Officer or its designated representative shall have authority to be the designated recipient of all letters, correspondence and other material from Visa and MasterCard to NCB as a member which relate to Merchant Processing Services, to attend as NCB's representative those meetings for members of Visa and MasterCard which relate to Merchant Processing Services, to maintain on behalf of NCB copies of all Merchant Contracts to which NCB is a party, to act generally as the NCB representative with respect to Merchant Processing Services in discussions, meetings and otherwise between NCB as a member and Visa or MasterCard, and to take such other actions on behalf of NCB That may be required by applicable Visa or MasterCard rules to be performed by a member and that are necessary or appropriate in order to perform this Agreement and effect the parties' intent with respect to this Agreement. NPC shall keep NCB, or such other person

                                    3    4

as may be designated by NCB, advised of all material, non-routine actions taken on behalf of NCB by any of the Joint Officers and shall consult in advance with NCB or such other designated person with respect to any material, non-routine actions to be taken by any of the Joint Officers on behalf of NCB.

               2.3 COMPENSATION. Except to the extent NCB and NPC otherwise agree, all compensation of the Joint Officers shall be paid by NPC, and NCB shall have no obligation to compensate any of the Joint Officers.

                      ARTICLE III - BANKING SERVICES                          ------------------------------

               3.1 MERCHANT PROCESSING - BANKING SERVICES. As soon as practicable after the Effective Date NPC shall enter into agreements or make other mutually acceptable arrangements with NCB pursuant to which NCB will provide those banking services which are necessary for NPC to provide the Merchant Processing Services and which the parties wish NCB to provide.

               3.2 AUTHORITY TO ESTABLISH BANK ACCOUNTS. Each Joint Officer shall have authority to establish at NCB or any other mutually acceptable financial institution any deposit accounts on behalf of NCB as may be necessary to provide some or all of the Merchant Processing Services contemplated by this Agreement for such periods as NCB and NPC agree. No provision of this Agreement authorizes or shall be construed to authorize any Joint Officer or NPC to incur any debt to NCB or any other financial institution, or to create any overdraft, which NCB is obligated directly or indirectly to repay.

               3.3 LOANS AND OVERDRAFTS. Nothing in this Agreement shall be deemed to create any obligation on the part of NCB to loan or advance to NPC any amounts in connection with Merchant Processing Services for any period of time.

                      ARTICLE IV - FEES AND EXPENSES                          ------------------------------

               4.1 CHARGES TO MERCHANTS. As between NPC and NCB, NPC shall receive all fees, discounts and other amounts payable by Merchants for Merchant Processing Services with respect to Merchant Contracts.

               4.2 EXPENSES. NPC shall bear all expenses of maintaining facilities and connections necessary to provide Merchant Processing Services except for the facilities and connection maintained by NCB for purposes of effecting payments pursuant to Section 1.6(b). In addition, NPC agrees to pay or reimburse NCB in full all interchange or issuer reimbursement fees on outgoing





merchant sales volume, as well as all fee assessments or charges imposed on NCB by Visa or MasterCard as a result of the Merchant Processing Services performed by NPC. Such fees shall be paid by NPC directly when due or shall be paid by NPC to NCB on the banking day immediately prior to the day on which NCB must pay such fees. All such fees, assessments and charges for which NCB seeks payment by NPC shall, upon request, be documented to NPC's reasonable satisfaction as being attributable to NPC's Merchant Processing Services.

                        ARTICLE V - INDEMNIFICATION                            ---------------------------

               5.1 INDEMNIFICATION. NPC agrees to indemnify, defend and save NCB, its directors, officers and employees harmless from all losses, claims, judgments, awards, penalties, expenses and other amounts of any nature arising out of:

               (a) NPC's failure to perform this Agreement in accordance with        its terms, including, but not limited to, the failure to pay expenses,        charges and other amounts in accordance with the provisions of this        Agreement,

                                    4    5

               (b) The negligent exercise of or the exceeding by any Joint          Officer of the authority granted pursuant to this Agreement to act as          an officer of NCB, or,

               (c) NCB's grant of authority to NPC pursuant to this          Agreement,

including, but not limited to, all court costs, investigation expenses and the reasonable fees and expenses of separate counsel for NCB selected by NCB, provided, however, that NCB shall not be entitled to indemnification as to amounts arising from the negligence or willful misconduct of NCB.

                   ARTICLE VI - COMPLIANCE MODIFICATIONS                       -------------------------------------

               6.1 COMPLIANCE MODIFICATIONS. In the event that:

               (a) the laws, rules and/or regulations or any official       interpretations thereof applicable to NCB as a National Bank or the Visa       or MasterCard rules and/or regulations or any official interpretations       thereof applicable to NCB and the matters covered by this Agreement are       modified such that

                      (i) any modifications in the relationship or               transactions contemplated hereby between NCB and NPC or in the               provisions of this Agreement are needed to comply with any such               laws, rules, regulations or official interpretations thereof, or

                      (ii) some or all of the activities contemplated by this               Agreement are prohibited, or

               (b) Visa or MasterCard requires, as a condition to performance        of this Agreement, that NPC enter into an agreement with Visa or        MasterCard that NPC considers unacceptable,

then at NPC's request, NCB will cooperate in making any modifications to this Agreement and to the parties' relationship hereunder to the extent any such modifications will permit NPC to continue processing, settling and authorizing bankcard transactions (or continue performing some of such functions) in compliance with the laws, rules, regulations or any official interpretations thereof applicable to NCB as a National Bank and the Visa and MasterCard rules, regulations, and interpretations thereof and any contractual terms required by Visa or MasterCard and acceptable to NPC (any such modifications being referred to as Compliance Modifications) provided that such Compliance Modifications are reasonable and are not unduly burdensome to NCB, and NPC reimburses NCB for any additional costs reasonably incurred by NCB in connection with such Compliance Modifications.

               6.2 FAILURE TO MAKE COMPLIANCE MODIFICATION. If NPC does not request any Compliance Modifications or the parties cannot agree upon the terms of any Compliance Modifications, then either party may terminate this Agreement upon prior written notice to the other party effective at the later of: (a) the deadline imposed by Visa or MasterCard for complying with any such rule, regulation, official interpretation or contract requirement or (b) 120 days after actual notice to NPC of such rule, regulation, interpretation or contract requirement.

                    ARTICLE VII - TERM AND TERMINATION                        ----------------------------------

               7.1 TERM. The term of this Agreement shall be five years commencing on the Effective Date and ending at the close of business on the fifth anniversary of the Effective Date. This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal.





                                    5    6

               7.2 TERMINATION. Either party may terminate this Agreement without penalty and without prejudice to any claims arising prior to termination as follows:

               (a) Upon the written agreement of both parties.

               (b) Upon the other party's breach of this Agreement provided          the terminating party has given written notice of the breach to the          other party specifying the breach, the action necessary to cure the          breach and the breaching party has not cured the breach within five          business days after notice is given of any failure by NPC to provide          any funds required hereunder to be provided by NPC to pay Merchants or          within thirty business days after notice is given of any other breach.

               (c) By NCB immediately upon NPC's voluntary filing of any          petition or complaint seeking relief under any federal or state          bankruptcy or other debt relief statute or upon an involuntary petition          in bankruptcy being filed against NPC if such petition is not dismissed          within sixty days after it is filed.

               (d) By NPC immediately in the event that any agreements          between NCB and Visa and/or MasterCard or NCB's membership in either          such bankcard association shall be terminated or materially limited          which termination or material limitation would impair the ability of          NPC to authorize, process or settle merchant bankcard transactions.

               7.3 SURVIVAL. The provisions of Sections 3.3, 4.2, 5.1, 8.1 and 10.6 of this Agreement shall survive any termination. No termination shall prejudice any claim or rights of any party which accrued prior to termination.

                      ARTICLE VIII - CONFIDENTIALITY                          ------------------------------

               8.1 CONFIDENTIALITY. In performing this Agreement, each party will have access to confidential information of the other. Each party agrees to hold in confidence and to instruct its employees and agents to hold in confidence all information and materials, in whatever form, reasonably designated as confidential by the party requesting confidentiality. NPC agrees to comply with all laws and regulations relating to confidentiality of customer lists and other information which are applicable to NCB and its agents or to NPC. NCB agrees to comply with all contractual obligations of NPC actually known to NCB and all laws and regulations applicable to NCB or NPC relating to confidentiality of customer lists and other information.

                           ARTICLE IX - NOTICES                               --------------------

               9.1 NOTICES. All notices which are required or permitted by this Agreement shall be in writing and shall be (i) delivered personally to the designated addressee, (ii) sent by the United States Mail addressed to the designated person by certified mail, return receipt requested, all postage prepaid, or (iii) sent by overnight delivery service addressed to the designated person, all charges prepaid, or (iv) by other means such as facsimile machine if the designated addressee acknowledges receipt in writing. Notices shall be addressed as follows:

If to NPC:                         Louis Parker                         Executive Vice President                         National City Processing Company                         1231 Durrett Lane                         Louisville, KY  40285-0001

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with copies to:         Kurt Knipp                         Executive Vice President                         National City Processing Company                         1231 Durrett Lane                         Louisville, KY  40285-0001

If to NCB:              Peter J. Barrick                         Senior Vice President                         National City Bank of Kentucky                         101 S. 5th Street                         Louisville, KY  40202

with copies to:         Curtis M. Jacobs                         Senior Vice President and Counsel                         National City Bank of Kentucky                         101 S. 5th Street                         Louisville, KY  40202





Notices personally delivered are given when received. Notices sent by United States Mail, certified mail, return receipt requested, are given five business days after delivery to the United States Postal Service unless prior actual receipt by the addressee is proven. Notice sent by overnight delivery service is deemed given one business day after delivery to and acceptance by overnight delivery service for next day delivery. Notices sent by other means and acknowledged are deemed given when acknowledged in writing.

                         ARTICLE X - MISCELLANEOUS                             -------------------------

               10.1 HEADINGS. The headings are for information and are not part of this Agreement.

               10.2 ENTIRE AGREEMENT, MODIFICATION. This Agreement and the attachments to it represent the entire agreement of the parties with respect to the subject matter of the Agreement. This Agreement may not be modified except by a written agreement which expressly refers to the Agreement and is signed by both parties.

               10.3 SEVERABILITY. If any section of this Agreement is deemed void, illegal or unenforceable, that section shall be severed and the balance shall remain in effect.

               10.4 GOVERNING LAW. This Agreement and its interpretation shall be governed by the laws of the United States and, to the extent not inconsistent therewith, by the laws of the Commonwealth of Kentucky without regard to conflicts of laws rules.

               10.5 BINDING AGREEMENT, ASSIGNMENT PROHIBITED. This Agreement shall bind the parties, their successors and permitted assigns. Neither party shall assign this Agreement or any rights under it except with the prior written consent of the other.

               10.6 MONITORING BY NCB. NPC shall admit properly identified and authorized NCB employees and agents onto its premises for purposes of monitoring NPC's compliance with this Agreement. It is understood that such monitoring will occur during normal business hours, will be preceded by reasonable notification to NPC, and must not interfere with NPC's normal operations.

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          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.

                              NATIONAL PROCESSING COMPANY

                              By: /s/ Mark D. Schatz                                      --------------------------------                                  Name: Mark D. Schatz                                        ------------------------------                                  Title: Vice President                                         -----------------------------

                              NATIONAL CITY BANK OF KENTUCKY                                  By: /s/ Peter J. Barrick                                      --------------------------------                                  Name: Peter J. Barrick                                        ------------------------------                                  Title: Senior Vice President                                         -----------------------------

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                                SCHEDULE A                                      to the                         SPONSORSHIP AGREEMENT BETWEEN NCB                                        and                                        NPC                                       dated                                   June 30, 1996

1.       BUSINESSES GENERALLY NOT SOLICITED. NPC does not generally solicit          customers engaged in any of the following businesses, but in special          circumstances it sometimes accepts customers engaged in one of these          businesses. Such exceptions occur primarily when NPC acquires another          processor's customer base or when NPC enters into a processing          agreement with an ISO/MSP which maintains merchant customers engaged in          such businesses.          - Telemarketing (In-bound or out-bound)





      - Pawn Shops          - Door-to-Door Sales          - Massage Parlors          - Bail & Bond Payments          - Business operated out of Residence          - Flea Markets          - Fulfillment Houses          - Timesharing          - Travel Clubs/Packages

2.       DOCUMENTATION REQUIRED FOR MERCHANT CUSTOMERS          - Merchant Application - all pertinent personal and business            information, including previous processor          - Site Visitation Report (when applicable)          - Bankcard Agreement - signed by Principal/Officer          - Personal Guarantee - signed by Principal (when applicable)          - Business Financial Statements (when applicable)          - Business and/or Personal Income Tax Filings if Financial Statements            unavailable (when applicable)          - Catalogues, Advertising Copy, etc. - as needed

3.       CREDIT REVIEW PROCEDURES. The following credit review procedures are          completed by NPC before a Merchant is accepted as a new customer. These          procedures may be repeated with respect to any existing Merchant          customer if such Merchant has unusual credit card activity, unusual or          higher than normal chargebacks, or if other circumstances arise which,          in the judgment of NPC's management, warrant a new or on-going credit          review.          - Inquire against Terminated Merchant File          - Obtain and Review Personal Credit Reports on Principal(s) (when            applicable)          - Obtain and Review Dun & Bradstreet Report (when applicable)          - Review of Financial Statements, Tax Returns and all other pertinent            data (when applicable)          - Investigation of previous processing relationship

4.       REASONS FOR DECLINING A MERCHANT.          - Listed on the terminated merchant file          - Insufficient credit history established          - Significant derogatory credit - personal or business          - Poor financial condition of business          - Derogatory report from previous processor          - Unacceptable line of business

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                                SCHEDULE B                                      to the                         SPONSORSHIP AGREEMENT BETWEEN NCB                                        and                                        NPC                                       dated                                   June 30, 1996

                 NAME                          NCB TITLE                     ----                          ---------                                                         Tony G. Holcombe              Contracting Officer

           Kurt S. Knipp                 Contracting Officer

           Wayne A. Chatham, Jr.         Contracting Officer

                                    10 
Question: Highlight the parts (if any) of this contract related to License Grant that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty?
answer:
2712


question:
Exhibit 10.1

COOPERATION AGREEMENT

This Cooperation Agreement (Agreement) is entered into as of July 1, 2020, by and between e.l.f. Beauty, Inc., a Delaware corporation (the Company), and Marathon Partners Equity Management, LLC (Marathon Partners), Marathon Partners L.P., Marathon Focus Fund L.P., Marathon Partners LUX Fund, L.P., Cibelli Research & Management, LLC and Mario Cibelli (collectively, the Marathon Parties) (each of the Company, on the one hand, and the Marathon Parties, on the other hand, a Party to this Agreement, and collectively, the Parties).

RECITALS

WHEREAS, the Marathon Parties have voting power or sole dispositive power or otherwise have beneficial ownership of 2,585,000 shares of the common stock, par value $0.01 per share, of the Company (the Common Stock) as of the date of this Agreement;

WHEREAS, Marathon Partners submitted a letter to the Company on May 28, 2020 (the Nomination Notice) nominating a slate of director candidates to be elected to the Board of Directors of the Company (the Board) at the Company's 2020 Annual Meeting of Shareholders (the 2020 Annual Meeting); and

WHEREAS, as of the date of this Agreement, the Company and the Marathon Parties have determined to come to an agreement with respect to certain matters set forth below.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties to this Agreement, intending to be legally bound, agree as follows:

1. Board Nomination; Certain Information; Other Board and Company Actions.

(a) Lori Keith (the New Director) has provided the Company with (i) fully completed and executed copies of the Company's standard director & officer questionnaire, representation and agreement letter, and other reasonable and customary director onboarding documentation, including (A) all information reasonably requested by the Company that is required to be disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or regulation or stock exchange rules or listing standards, in each case, relating to their appointment, nomination or election as a director of the Company and (B) information reasonably requested by the Company in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to their appointment, nomination or election as a director of the Company and required by the Company in connection with the appointment or election of new members of the Board, (ii) an executed consent of the New Director to be named in any proxy statement or other filings under applicable law or stock exchange rules or listing standards and to serve as a Class III Director and (iii) a written representation that the New Director, if elected as a director of the Company, would be in compliance, and will comply with, all applicable confidentiality, corporate governance, conflict of interest, Regulation FD, code of conduct and ethics, stock ownership and trading policies and guidelines, and other policies of the Company applicable to members of the Board (collectively, the Information), and has cooperated with a background check.

(b) Based on the Information, the Nominating and Corporate Governance Committee (the Nominating Committee) of the Board and the Board have determined that the New Director may serve as an independent director of the Company in accordance with the rules and listing standards of the New York Stock Exchange (NYSE) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the SEC).

(c) As promptly as practicable, but in no event later than two business days following the execution of this Agreement, the Nominating Committee and the Board shall take all necessary action to (i) increase the size of the Board from eight to nine directors, with such new Board seat to be in Class III, (ii) appoint the New Director as a Class III director on the Board and (iii) appoint the New Director to the Nominating Committee.





(d) Immediately following the execution of this Agreement by the Parties, the Marathon Parties shall send a letter to the Secretary of the Company irrevocably withdrawing (i) the Nomination Notice, and, accordingly, (ii) their nomination of Mario Cibelli, Dhiren Fonseca and Beth Birnbaum (the Nominations) for election to the Board as Class I directors at the 2020 Annual Meeting and (iii) the Marathon Parties' demand letter pursuant to Section 220 of the Delaware General Corporation Law, dated April 12, 2019.

(e) The Board shall take all necessary action to include in the proposals to be voted on at the 2020 Annual Meeting (i) a say-on-pay proposal of the Company and (ii) a vote as to the frequency at which say-on-pay proposals will be presented to and voted on by the stockholders at future annual meetings of the Company, which shall include a recommendation by the Board that stockholders vote FOR annual say-on-pay proposals.

(f) The Board shall take all necessary action to amend Section 3.1(a) of the 2016 Equity Incentive Award Plan of the Company (the 2016 Incentive Plan) to reduce the maximum automatic annual percentage increase of shares of Common Stock reserved for issuance under the 2016 Incentive Plan from 4% to 2%. During the Support Period (as defined below), the Board shall not (i) adopt a new equity incentive award plan or otherwise seek to amend the 2016 Incentive Plan to increase the Share Limit (as defined in the 2016 Incentive Plan) or (ii) issue Awards (as defined in the 2016 Incentive Plan) in excess of the Share Limit (as defined in the 2016 Incentive Plan).

(g) The New Director (or any Replacement (as defined below)), in addition to all current directors, will (A) comply with all policies, procedures, codes, rules, standards and guidelines applicable to members of the Board and (B) keep confidential all Company confidential information and not disclose to any third parties (including the Marathon Parties) discussions or matters considered in meetings of the Board or Board committees.

(h) Annual grants of equity awards to executive officers of the Company in 2021 will take place during the open trading window following the Company's fourth quarter earnings call in 2021. The proxy statement for the 2020 Annual Meeting shall include language describing the obligation of the Company set forth in this Section 1(h).

(i) Nothing in this Agreement shall be deemed to abridge or limit the fiduciary duties of any member of the Board under Delaware law.

(j) The New Director (or any Replacement (as defined below)) may attend as a non-voting observer any meeting(s) of the Compensation Committee of the Board (the Compensation Committee) held following the date of this Agreement and during the Support Period, and shall receive a copy of any materials disseminated to Compensation Committee members in connection with such meeting(s).

2. Representations of the Marathon Parties. The Marathon Parties represent and warrant to the Company as of the date hereof as follows:

(a) The Marathon Parties are the beneficial owners of 2,585,000 shares of Common Stock, such shares of Common Stock constitute all of the Common Stock beneficially owned by the Marathon Parties, and (i) the Marathon Parties' interests in the Common Stock and debt or other securities of the Company is as set forth on Exhibit A, (ii) except as set forth on Exhibit A, the Marathon Parties do not currently have, and do not currently have any right to acquire, any interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps, puts, calls, appreciation rights or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of Common Stock, whether or not any of the foregoing would give rise to beneficial ownership, and whether or not to be settled by delivery of Common Stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement) (collectively, Securities of the Company) and (iii) the Marathon Parties will not, directly or indirectly, compensate or agree to compensate the New Director for her service as a director of the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation. The terms

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beneficially owns and beneficial ownership for all purposes under this Agreement shall have the meanings set forth in Rule 13d-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the Exchange Act). As used in this Agreement, the terms Affiliate and Associate shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act.

(b) The Marathon Parties have no agreements, understandings or undertakings with any third party to share or delegate disposition or voting control over any of the securities set forth on Exhibit A, or to transfer, hypothecate or lend any of the securities set forth on Exhibit A.

(c) Each of the Marathon Parties represents and warrants to the Company as of the date hereof that it has the power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by each of the Marathon Parties, and constitutes a legal, valid and binding obligation of each of the Marathon Parties, enforceable against each of the Marathon Parties in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles, (ii) does not require the approval of any investor in or member of the Marathon Parties and (iii) does not violate any law, order of any court or any governmental agency or regulation or the charter or any organizational document of the Marathon Parties, or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the Marathon Parties or any of their respective assets is bound.

3. Representations of the Company. The Company represents and warrants to the Marathon Parties as of the date hereof that it has the corporate power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles and (ii) does not violate any law, order of any court or any agency or regulation or the Company's Certificate of Incorporation or the Amended and Restated Bylaws of the Company (the Bylaws), or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the Company or any of its assets or the assets of its subsidiaries are bound. The Company further represents and warrants to the Marathon Parties as of the date hereof that since March 2, 2019 it has not granted any performance equity awards to any named executive officers other than those disclosed or referenced by the Company in its Forms 4 filed with the SEC in June 2020.

4. Support Period Covenants.

(a) During the period commencing on the date hereof and ending at 11:59 pm New York Time on the date that is thirty (30) days prior to expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the Company's 2021 Annual Meeting of Stockholders (the 2021 Annual Meeting) as determined by applicable law and set forth in the Bylaws (such period, as modified, if applicable, in Section 4(b) below, the Support Period), the Marathon Parties shall appear in person or by proxy for quorum purposes at the 2020 Annual Meeting and any other meeting of stockholders of the Company, including any adjournment or postponement thereof, to vote all of the shares of Common Stock beneficially owned by the Marathon Parties on the record date for such meeting (i) in favor of all persons nominated by the Board to serve as directors of the Company and against any stockholder nominated candidate not endorsed by the Board, (ii) to ratify the appointment of the Company's independent registered public accounting firm, (iii) in accordance with the Board's recommendation with respect to the Company's say-on-pay proposal and compensation plans and any amendments thereto and (iv) in favor of any other proposals recommended by the Board, provided, that with respect to any extraordinary matter, including any merger, acquisition, recapitalization, restructuring, financing, disposition, distribution, spin-off, asset sale, joint venture or other business combination involving the Company or its subsidiaries which requires a vote of the Company's stockholders, the Marathon Parties shall have the right to vote the shares of Common Stock beneficially owned by the Marathon Parties in their sole discretion. The Marathon Parties shall provide written evidence of such vote to the Company no later than ten (10) business days prior to the 2020 Annual Meeting.

(b) Notwithstanding the foregoing, if either:

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(i) at any time between the date of this Agreement and the date that is thirty (30) days prior to the expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the 2021 Annual Meeting as determined by applicable law and set forth in the Bylaws (such date, the 2021 Annual Meeting Nomination Window Date), the Marathon Parties do not meet the Minimum Ownership Threshold (as defined below), or

(ii) as of the 2021 Annual Meeting Nomination Window Date, all of the following conditions have been met:

a. if the New Director or her Replacement is a director on the Board as of the 2021 Annual Meeting Nomination Window Date, the New Director or her Replacement (as applicable) is a member of the Nominating Committee as of such date,

b. between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, Tarang Amin has not entered into a voting agreement or similar agreement that would subject any Securities of the Company beneficially owned by Mr. Amin to any arrangement or agreement with respect to the voting thereof with any other person that is a holder of any Securities of the Company and that is not affiliated with Mr. Amin or his estate planning, or that would give Mr. Amin the power to vote or direct the voting of any Securities of the Company beneficially owned by any other person that is not affiliated with Mr. Amin or his estate planning,

c. between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, the Company has not issued shares of Common Stock (and/or Securities of the Company convertible into, or exercisable for, shares of Common Stock) in any transaction that represents more than 20% of the issued and outstanding shares of Common Stock (including any Securities of the Company convertible into, or exercisable for, shares of Common Stock) immediately prior to such issuance,

d. the Company has confirmed that the proxy statement for the 2021 Annual Meeting shall include language describing the obligation of the Company set forth in Section 1(h) above as relates to annual grants of equity awards to executive officers of the Company in 2022, and

e. the Company has confirmed that any director(s) or officer(s) of the Company who beneficially owned 3% or more of the issued and outstanding shares of Common Stock as of the record date for the 2020 Annual Meeting voted all such shares at the 2020 Annual Meeting in favor of annual say-on-pay proposal frequency at future annual meetings of the Company,

then, for all purposes under this Agreement, the Support Period shall not expire on the 2021 Annual Meeting Nomination Window Date, and instead the Support Period shall automatically be extended until 11:59 pm New York Time on the date that is thirty (30) days prior to expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the Company's 2022 Annual Meeting of Stockholders as determined by applicable law and set forth in the Bylaws for all purposes under this Agreement, and the Marathon Parties shall be required to (x) appear in person or by proxy at the 2021 Annual Meeting or any other meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period, (y) vote any of the shares of Common Stock beneficially owned by the Marathon Parties in accordance with Section 4(a)(i), (ii), (iii) and (iv) at any meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period, provided, however, that in the event that Institutional Shareholder Services Inc. (ISS) recommends otherwise with respect to the Company's say-on-pay proposal or any proposal relating to any compensation plan submitted for shareholder approval at the 2021 Annual Meeting, including any amendments thereto, each of the Marathon Parties will be permitted to vote in accordance with the ISS

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recommendation in its discretion, and (z) provide written evidence of such vote by the Marathon Parties at any meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period (including the 2021 Annual Meeting) no later than ten (10) business days prior to any such meeting (including the 2021 Annual Meeting). As used herein, the Minimum Ownership Threshold shall mean beneficial ownership equal to or greater than 2.0% of the issued and outstanding shares of Common Stock. The Marathon Parties shall provide notice to the Company within two business days following the date on which the Marathon Parties no longer meet the Minimum Ownership Threshold.

(c) If at any time during the Support Period (x) the New Director is unable to serve out her term as a Class III Director on the Board for any reason, and (y) as of such time, the Marathon Parties have maintained since the date of this Agreement the Minimum Ownership Threshold and the Marathon Parties have provided evidence of such ownership, together with a certification of such ownership, to the Company, then the Marathon Parties and the Company shall negotiate in good faith to propose a mutually-agreed upon replacement director (the Replacement) to be appointed to the Board to serve as her successor for the remainder of her current term as a Class III Director in accordance with the Bylaws, provided such Replacement (i) qualifies as independent pursuant to the rules and listing standards of the NYSE and applicable SEC rules and regulations, (ii) has provided the Company with the Information, (iii) has cooperated with a background check and (iv) has executed all documents required to be executed by directors of the Company. The Replacement shall be promptly appointed to the Board and at least one standing committee of the Board, subject to the approval by each of the Nominating Committee and the Board, after conducting a good faith customary due diligence process and consistent with the Board's fiduciary duties.

5. Standstill Covenants.

(a) Except as otherwise contemplated in Section 4 of this Agreement, at all times during the Support Period, the Marathon Parties shall not, and shall cause their Affiliates and Associates and their and such Affiliates' and Associates' respective equity owners (including members and limited partners), directors, officers, managers and employees not to, and will direct their consultants, agents, representatives, attorneys and advisors (to the extent directly or indirectly acting on behalf of the Marathon Parties) (collectively, the Marathon Party Representatives) not to, directly or indirectly, in any manner, alone or in concert with others:

(i) make, engage, solicit, or in any way participate in any solicitation of proxies (as such term under the Exchange Act) or consents to vote, or knowingly advise, encourage or influence any person or entity with respect to the voting of any Securities of the Company or become a participant in any contested solicitation for the election of directors with respect to the Company (as such terms are defined or used under the Exchange Act) (other than a solicitation or acting as a participant in support of all of the nominees recommended by the Board at any stockholder meeting);

(ii) propose or otherwise solicit stockholders of the Company for the approval of one or more stockholder proposals (whether made pursuant to Rule 14a-8 under the Exchange Act or otherwise) or call, attempt to call or solicit consents to call a special meeting of stockholders of the Company;

(iii) agree or propose to grant any proxies with respect to, or deposit any Securities of the Company in a voting trust or similar arrangement or subject any Securities of the Company to any arrangement or agreement with respect to the voting thereof, except as expressly set forth in Section 4 of this Agreement;

(iv) take any action to form, join, encourage, influence or in any way participate in any partnership, limited partnership, syndicate or other group (as such term is contemplated in Rule 13d-5 promulgated under the Exchange Act) with respect to the Securities of the Company (other than a group formed with an Affiliate of the Marathon Parties) or otherwise act in concert with any person or entity for the purpose of circumventing the provisions or purposes of this Agreement;

(v) purchase or otherwise acquire, or offer, seek, propose or agree to acquire, ownership (including beneficial ownership) of the Securities of the Company, any direct or indirect rights or options to

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acquire any such Securities of the Company, any derivative securities or contracts or instruments in any way related to the price of shares or value of Common Stock, any other securities of the Company, or any assets or liabilities of the Company, provided that the Marathon Parties and their Affiliates, in the aggregate, may acquire beneficial ownership of up to 12.5% of the Company's outstanding shares of Common Stock;

(vi) other than in open-market transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, sell, offer or agree to sell, directly or indirectly, through swap or hedging transactions or otherwise, the Securities of the Company or any rights decoupled from the underlying Securities of the Company held by the Marathon Parties or any of their Affiliates or Associates to any person or entity not (A) a party to this Agreement, (B) a member of the Board or (C) an officer of the Company (any person or entity not set forth in clauses (A)-(C) shall be referred to as a Third Party), that would knowingly result in such Third Party, together with its Affiliates and Associates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of more than 4.9% of the shares of Common Stock outstanding at such time, other than Schedule 13G filers that are mutual funds, pension funds, index funds or investment fund managers with no known history of activism or known plans to engage in activism, except in a transaction approved in advance by the Board;

(vii) effect or seek to effect, offer or propose to effect, cause or participate in, or knowingly assist or facilitate any other person or entity to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, division, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of material assets, liquidation, dissolution or other extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities (each, an Extraordinary Transaction), or make any public statement with respect to an Extraordinary Transaction; provided, however, that nothing in this Agreement shall prevent the Marathon Parties from making a public statement about how they intend to vote and the reasons therefor with respect to any Extraordinary Transaction to which any executive officer or director of the Company is a party (other than customary support agreements) and that requires a vote of the Company's stockholders; provided further, that this clause shall not preclude the tender by the Marathon Parties or any of their Affiliates or Associates of any Securities of the Company into any tender or exchange offer which has been approved and recommended to stockholders of the Company by the Board;

(viii) (A) seek or solicit support for (whether publicly or privately) any written consent of stockholders of the Company, (B) seek representation on, or nominate any candidate to, the Board, except as set forth in Section 1 of this Agreement, (C) seek the removal of any member of the Board, (D) conduct a referendum of stockholders, (E) institute any litigation against the Company, its directors or its officers other than to (1) enforce the provisions of this Agreement and (2) make counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against the Marathon Parties, or (F) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the Delaware General Corporation Law or otherwise;

(ix) knowingly encourage, advise or influence any other person or assist any Third Party in so encouraging, assisting or influencing any person or entity with respect to the giving or withholding of any proxy vote at the 2020 Annual Meeting or the 2021 Annual Meeting (including any vote no or withhold vote or similar campaign);

(x) take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board or unfilled newly-created directorships; (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company; (C) any other material change in the Company's management, business or corporate structure, including, without limitation, its capital allocation, expense structure, business operations or strategies or its management or other personnel; (D) seeking to have the Company waive or make amendments or modifications to the Company's Certificate of Incorporation or the Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person or entity;

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(E) causing a class of Securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (F) causing a class of Securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

(xi) otherwise act in concert with any person or entity to seek to control or direct the management, Board (or any individual members thereof), stockholders or policies of the Company;

(xii) take any action that would require the Marathon Parties or any of their Affiliates or Associates to file a statement of beneficial ownership report on Schedule 13D or any amendment thereto with the SEC, other than solely as a result of the purchase or sale by the Marathon Parties of Securities of the Company set forth on Exhibit A;

(xiii) make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any Securities of the Company or assets of the Company or this Agreement;

(xiv) enter into substantive discussions, negotiations, agreements or understandings with any Third Party with respect to the foregoing, or solicit, assist, prompt, induce or attempt to induce any Third Party to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or

(xv) request, directly or indirectly, any amendment or waiver of this Section 5(a).

(b) Notwithstanding anything contained in this Agreement to the contrary:

(i) Nothing in this Section 5(a) shall prohibit or restrict the Marathon Parties from taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has jurisdiction over the Marathon Parties or any of their Affiliates or Associates. The provisions of this Section 5(a) shall also not prevent the Marathon Parties from freely voting their Shares (except as otherwise provided in this Agreement) or taking any actions except as specifically contemplated in this Agreement.

(ii) The Marathon Parties shall be responsible for any breach of this Section 5(a) by any of their Affiliates or Associates or any Marathon Party Representatives.

6. Mutual Non-Disparagement; No Public Statements.

(a) Subject to applicable law, the Company, on the one hand, and each of the Marathon Parties on the other hand, covenants and agrees that, during the Support Period or if earlier, until such time as the other Party or any of its or her officers, directors, employees, subsidiaries, Affiliates, Associates, agents, attorneys or other representatives (collectively, the Representatives) shall have breached this section, neither it nor any of its respective Representatives acting, directly or indirectly, at its direction or on its behalf, shall in any way publicly (including by any communication with other investors or prospective investors in the Company where such communications could reasonably be expected to be made public or trigger a public disclosure obligation, with securities analysts or any member of traditional or digital media) criticize, disparage, call into disrepute or otherwise defame or slander the other Party or such other Party's Representatives (including any current officer or director of a Party or a Party's subsidiaries who no longer serves in such capacity at any time following the execution of this Agreement), or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business or reputation of such other Party.

(b) During the Support Period and except for the filing or amendment of a statement of beneficial ownership report on Schedule 13D in relation to the purchase or sale of Common Stock, neither the Marathon Parties nor any of their Representatives, acting at the direction of, or on behalf of, the Marathon Parties shall make any public statement relating to the Company nor take any action which would reasonably be expected to require any public filing

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related to the Company without prior written approval from the Company; provided, however, that nothing in this Agreement shall prevent the Marathon Parties from making a public statement about how they intend to vote and the reasons therefor with respect to any Extraordinary Transaction to which any executive officer or director of the Company is a party (other than customary support agreements) and that requires a vote of the Company's stockholders.

(c) Each Party shall be responsible for any breach of this Section 6 by any of their respective Representatives.

(d) During the Support Period, so long as the Marathon Parties have maintained since the date of this Agreement the Minimum Ownership Threshold, (i) management of the Company (together with the Company's Lead Independent Director, should such director elect to participate) will hold a customary investor conference call, for up to 45 minutes, with Mr. Cibelli and other representatives of the Marathon Parties following each of the Company's quarterly and annual earnings calls, and (ii) promptly following such call, the Lead Independent Director of the Company (together with any other independent directors of the Company selected by the Lead Independent Director to attend such meeting) will participate in a call with Mr. Cibelli and other representatives of the Marathon Parties without management of the Company present for up to 15 minutes (the calls in (i) and (ii), Quarterly Investor Conference Calls). The Marathon Parties shall provide the Company with a detailed agenda of discussion topics for the portion of the Quarterly Investor Conference Call with the Lead Independent Director no later than three business days prior to the date of such Quarterly Investor Conference Call. Should the Marathon Parties forgo a Quarterly Investor Conference Call, any unused minutes from such relinquished Quarterly Investor Conference Call shall carry over to the Quarterly Investor Conference Call being held the following quarter; provided, however, for the avoidance of doubt, any unused minutes from a Quarterly Investor Conference Call shall not carry over more than one successive quarter.

(e) Between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, no Marathon Party or any of their Representatives will contact or communicate with the Company or any of its Representatives (including any member of the Board) in any way or through any media other than at a Quarterly Investor Conference Call, in connection with arranging any such Quarterly Investor Conference Call or in connection with the Marathon Party's specific rights and obligations under this Agreement. Any communications from any Marathon Party or any of their Representatives in connection with arranging any such Quarterly Investor Conference Call or in connection with the Marathon Party's rights and obligations under this Agreement must be directed to the Parties in accordance with the notice provisions in Section 8(l), and no Marathon Party or any of their Representatives will contact or communicate with the Company or any of its Representatives (including any member of the Board) in any other manner unless agreed to in writing by the Company.

(f) In the event that the Support Period is automatically extended pursuant to Section 4(b), then, following the 2021 Annual Meeting Nomination Window Date, the Marathon Parties agree that any and all contacts and communications regarding the Company, as well as any request by any of the Marathon Parties or any of the Marathon Party Representatives to contact, communicate or meet with the Company or any of its Representatives (including any member of the Board), shall be directed solely to the Company's General Counsel. Any such communications from any of the Marathon Parties or any of the Marathon Party Representatives in connection with arranging any Quarterly Investor Conference Call or in connection with the Marathon Parties' rights and obligations under this Agreement shall be directed solely to the Company's General Counsel.

7. Press Release. The Parties agree that the Company shall issue a press release (the Press Release) in substantially the form attached hereto as Exhibit B promptly following the execution and delivery of this Agreement by the Parties.

8. Miscellaneous.

(a) Specific Enforcement; Special Remedy. Each of the Parties agrees that the other Party would be irreparably injured in the event that any provision of the Agreement is breached or not performed. Accordingly, it is agreed that each Party shall be entitled to temporary and permanent injunctive relief with respect to each and any breach or purported repudiation of this Agreement by the other and to specifically enforce strict adherence to this Agreement and the terms and provisions hereof against the other in any action instituted in a court of competent

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jurisdiction, in addition to any other remedy which such aggrieved Party may be entitled to obtain. Moreover, in the event of the breach of any of the provisions of this Agreement, timeliness in obtaining relief is of the essence.

(b) Amendments; Waiver. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally or in writing, except that any term of this Agreement may be amended by a writing signed by the Parties, and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) solely in a writing signed by the Party against whom such waiver is to be asserted. No delay on the part of either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either Party of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

(c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. This Agreement may not be assigned without the prior written consent of the other Party hereto.

(d) No Third-Party Beneficiaries. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person or entity, other than the Parties and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement and any conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns, and for the benefit of no other person or entity.

(e) Counterparts. This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts (including by facsimile signature, Docusign or other form of electronic signature), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. This Agreement may be executed and delivered by the Parties electronically, including by electronic mail, .pdf, Docusign, or other means of electronic delivery.

(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(g) Governing Law; Choice of Venue.

(i) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within that state, without giving effect to any law or principals of law that would result in the application of the laws of any other jurisdiction.

(ii) Each Party (A) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (B) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (C) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each Party irrevocably waives the right to trial by jury and (D) irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such Party's principal place of business or as otherwise provided by applicable law.

(h) Reimbursement. The Company shall reimburse the Marathon Parties for their reasonable out-of-pocket expenses, including the reasonable fees and expenses of counsel, incurred in connection with their engagement with the Company, the Nominations and the negotiation of, and all matters arising under this Agreement; provided, however, that such reimbursement shall not exceed $250,000.

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(i) Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision in this Agreement.

(j) Interpretation and Construction. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. For purposes of this Agreement, the term including shall be deemed to be followed by the words without limitation.

(k) Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof.

(l) Notices. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail to the e-mail address for a Party set forth below; and (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses for such communications shall be:

If to the Company or the Board:

e.l.f. Beauty, Inc. 570 10th Street Oakland, CA 94607 Attention: General Counsel Email: ***

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP 140 Scott Drive Menlo Park, CA 94025 Attention: Tad Freese and Josh Dubofsky E-mail: Tad.Freese@lw.com and Josh.Dubofsky@lw.com

If to the Marathon Parties:

Marathon Partners Equity Management, LLC Attention: Mario Cibelli Email: ***

with a copy (which shall not constitute notice) to:

Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Attention: Andrew Freedman E-mail: AFreedman@olshanlaw.com

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(m) Termination. Unless earlier terminated as provided in this Agreement, upon the expiration of the Support Period, this Agreement shall immediately and automatically terminate in its entirety and no Party shall have any further rights or obligations under this Agreement; provided, however, (i) that this Section 8 shall survive any such termination and (ii) no Party shall be released from any breach of this Agreement that occurred prior to the termination of this Agreement.

[Signature Pages Follow]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.

E.L.F. BEAUTY, INC.

By: /s/ Scott Milsten Name: Scott Milsten Title: General Counsel

[Signature Page to Cooperation Agreement]





Marathon Partners Equity Management, LLC

By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member

Marathon Partners L.P.

By: Marathon Partners Equity Management, LLC, its General Partner

By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member

Marathon Focus Fund L.P.

By: Cibelli Research & Management, LLC, its General Partner

By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member

Marathon Partners LUX Fund, L.P.

By: Cibelli Research & Management, LLC, its General Partner

By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member

Cibelli Research & Management, LLC

By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member

By: /s/ Mario D. Cibell Name: Mario D. Cibelli

[Signature Page to Cooperation Agreement] 
Question: Highlight the parts (if any) of this contract related to Anti-Assignment that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
answer:

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