Document:

Tax Allocation Agreement

 Exhibit 10.01 
 TAX ALLOCATION AGREEMENT 
 dated as of June 19, 2006 
 among 
 New Sally Holdings, Inc.

 Sally Holdings, Inc. 
 New Aristotle Holdings, Inc. 
 and 
 Alberto-Culver Company 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I     DEFINITIONS	  	2
			
	 SECTION 1.01.
	  	General	  	2
		
	ARTICLE II     TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS	  	7
			
	 SECTION 2.01.
	  	Obligations to File Tax Returns.	  	7
	 SECTION 2.02.
	  	Obligation to Remit Taxes	  	8
	 SECTION 2.03.
	  	Tax Indemnity; Prior Agreements; Refunds.	  	8
	 SECTION 2.04.
	  	Restructuring Taxes; Other Taxes Relating to the Distribution.	  	9
	 SECTION 2.05.
	  	Sally Taxes; Alberto-Culver Taxes.	  	10
	 SECTION 2.06.
	  	Calculation of Estimated Pre-Closing Income Taxes; Pre-Closing vs. Post-Closing Issues	  	10
	 SECTION 2.07.
	  	Tax Attributes	  	13
	 SECTION 2.08.
	  	Carryback Provisions	  	13
	 SECTION 2.09.
	  	General Tax Payments	  	14
	 SECTION 2.10.
	  	Other Payments	  	15
	 SECTION 2.11.
	  	Notice	  	15
	 SECTION 2.12.
	  	Audit or Redetermination of U.S. Federal Income Tax Liability or U.S. State, Local or Municipal Consolidated, Combined or Unitary Income Tax Liability.	  	15
	 SECTION 2.13.
	  	Amended Tax Returns	  	15
		
	ARTICLE III     TAX AUDITS	  	16
			
	 SECTION 3.01.
	  	Controlling Party	  	16
	 SECTION 3.02.
	  	Indemnified Claims in General	  	16
	 SECTION 3.03.
	  	Certain Tax Claims	  	16
	 SECTION 3.04.
	  	Payments with Respect to Claims.	  	17
		
	ARTICLE IV    COOPERATION	  	18
			
	 SECTION 4.01.
	  	Inconsistent Actions	  	18
	 SECTION 4.02.
	  	Prohibited Acts.	  	19
	 SECTION 4.03.
	  	Cooperation with Respect to Tax Return Filings, Examinations and Tax Related Controversies	  	20
	 SECTION 4.04.
	  	Cooperation with Respect to Particular Tax Return Filings	  	20
	 SECTION 4.05.
	  	Other Tax Matters	  	20
		
	ARTICLE V     RETENTION OF RECORDS; ACCESS	  	21

  

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	ARTICLE VI     DISPUTES	  	21
		
	ARTICLE VII     SURVIVAL OF LIABILITIES	  	22
		
	ARTICLE VIII     MISCELLANEOUS	  	22
			
	 SECTION 8.01.
	  	Entire Agreement; Construction	  	22
	 SECTION 8.02.
	  	Survival of Agreements	  	22
	 SECTION 8.03.
	  	Governing Law	  	22
	 SECTION 8.04.
	  	Notices	  	22
	 SECTION 8.05.
	  	Payments	  	24
	 SECTION 8.06.
	  	Consent to Jurisdiction	  	24
	 SECTION 8.07.
	  	Amendments	  	24
	 SECTION 8.08.
	  	Assignment	  	24
	 SECTION 8.09.
	  	Captions; Currency	  	25
	 SECTION 8.10.
	  	Severability	  	25
	 SECTION 8.11.
	  	Parties in Interest	  	25
	 SECTION 8.12.
	  	Schedules	  	25
	 SECTION 8.13.
	  	Waivers; Remedies	  	25
	 SECTION 8.14.
	  	Counterparts	  	26
	 SECTION 8.15.
	  	Performance	  	26
	 SECTION 8.16.
	  	Enforcement	  	26
	 SECTION 8.17.
	  	Interpretation	  	26
	 SECTION 8.18.
	  	Mutual Drafting	  	26

  

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 TAX ALLOCATION AGREEMENT 
 TAX ALLOCATION AGREEMENT (this “Agreement”), dated as of June 19, 2006, among New Sally Holdings, Inc., a Delaware corporation
(“New Sally”), Sally Holdings, Inc., a Delaware corporation (“Sally”) (New Sally and Sally, collectively, the “Sally Parties”), Alberto-Culver Company, a Delaware corporation
(“Alberto-Culver”), and New Aristotle Holdings, Inc., a Delaware corporation (“New Alberto-Culver”) (Alberto-Culver and New Alberto-Culver, collectively, the “Alberto-Culver Parties”). 

RECITALS 
 WHEREAS, Alberto-Culver
is the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”), which currently files consolidated federal Income Tax Returns (the
“Affiliated Group”); 
 WHEREAS, pursuant to the Separation Agreement dated as of the date hereof between the Sally Parties
and the Alberto-Culver Parties (as may be amended from time to time in accordance with its terms, the “Separation Agreement”) and the Investment Agreement (as defined below), New Sally will distribute to its stockholders on a pro
rata basis, (i) all of the issued and outstanding shares of New Alberto-Culver common stock (“New Alberto-Culver Common Stock”) (as described more fully in the Separation Agreement, the “Share Distribution”)
and (ii) a cash dividend of $25 per share (as described more fully in the Separation Agreement, the “Cash Distribution”) (the Share Distribution and the Cash Distribution collectively referred to herein as the
“Distributions”); 
 WHEREAS, the Sally Parties, New Aristotle Company, and the Alberto-Culver Parties have entered into an
Investment Agreement, dated as the date hereof (the “Investment Agreement”) with CDRS Acquisition LLC, a Delaware limited liability company (“Investor”) pursuant to which, prior to the Distributions, Alberto-Culver
will undertake the Alberto-Culver Merger, the Alberto-Culver Conversion, the New Alberto-Culver Contribution and the Sally Distribution, and the Investor will make the Equity Investment (as defined in the Separation Agreement); 
 WHEREAS, in connection with the transactions contemplated by the Investment Agreement, one or more of the Sally Group members will incur $1.85 billion of
indebtedness (the “Debt Financing”); 
 WHEREAS, the parties to this Agreement intend that (i) the Alberto-Culver
Merger and the Alberto-Culver Conversion together will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code, (ii) following the Alberto-Culver Merger and the Alberto-Culver Conversion, New Sally will
become the common parent of the Affiliated Group; (iii) the New Alberto-Culver Contribution followed by the Share Distribution will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(D) of the Code; (iv) the
Cash Distribution will constitute a distribution taxable under Sections 301 and 356(b) of the Code; and (v) the Share Distribution will qualify as a distribution eligible for nonrecognition under Sections 355(a) and 361(c) of the Code;

 WHEREAS, after the Distributions Date (as defined in the Separation Agreement), neither Alberto-Culver,
New Alberto-Culver nor any of the Alberto-Culver Subsidiaries (as hereinafter defined) will be a member of the Affiliated Group for federal income tax purposes and Alberto-Culver will be disregarded as an entity separate from New Alberto-Culver for
U.S. federal income tax purposes; 
 WHEREAS, after the Distributions the Affiliated Group shall continue and New Sally shall be treated as
the common parent of the Affiliated Group for federal income tax purposes; and 
 WHEREAS, the Sally Group and the Alberto-Culver Group (as
hereinafter defined) desire on behalf of themselves and their successors to set forth their rights and obligations with respect to Taxes due for periods before, on and after the Distributions Date. 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 ARTICLE I 
 DEFINITIONS 
 SECTION 1.01. General. Capitalized terms used in this Agreement have the meanings set forth in
this Agreement, or, when not so defined, in the Separation Agreement or the Investment Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined): 
 “AC Compensation Payments” has the meaning set forth in Section 2.06(d).

 “Affiliate” has the meaning set forth in the Separation Agreement; provided that the term “Affiliate”
shall not include any Family Shareholder. 
 “Affiliated Group” has the meaning set forth in the first recital. 

“Agreement” means this Tax Allocation Agreement as the same may be amended from time to time. 
 “Alberto-Culver” has the meaning set forth in the preamble. 
 “Alberto-Culver Group” means Alberto-Culver, New Alberto-Culver, and the Alberto-Culver Subsidiaries. 
 “Alberto-Culver Parties” has the meaning set forth in the preamble. 
 “Alberto-Culver Subsidiary” means each direct and indirect Subsidiary of Alberto-Culver other than a member of the Sally Group.

 “Alberto-Culver Taxes” means any Taxes (excluding Restructuring Taxes) that are treated as Alberto-Culver Taxes under
this Agreement. 
  

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 “Applicable Federal Rate” means the federal short-term rate set forth in
Section 1274(d) of the Code, compounded quarterly. 
 “Cash Distribution” has the meaning set forth in the second
recital. 
 “Change-in-Law” means a change in the Code, the Treasury Regulations or published administrative or judicial
interpretation thereof. 
 “Claim” has the meaning set forth in Section 3.03. 
 “Controlling Party” means the party described as the Controlling Party in accordance with Section 3.01. 
 “Covered Group” means, in the case of any Covered Group Taxes, the group of Persons that join in the filing of the consolidated,
combined or unitary Tax Return upon which such Covered Group Taxes are reported. 
 “Covered Group Taxes” means any federal,
state or local Taxes reportable on a consolidated, combined or unitary Tax Return for a group that includes both New Alberto-Culver, Alberto-Culver or any Alberto-Culver Subsidiary, on the one hand, and New Sally, Sally or any Sally Subsidiary, on
the other hand. 
 “Covered Group Year” means, in the case of any Covered Group, any Taxable year of such Covered Group that
ends prior to or includes the Distributions Date. 
 “Debt Financing” has the meaning set forth in the fourth recital.

 “Distributions” has the meaning set forth in the second recital. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 
 “Estimated Pre-Closing Income Taxes” has the meaning set forth in Section 2.06(a). 
 “Family Shareholder” means a “Stockholder” as defined in the Support Agreement. 
 “Filing Party” has the meaning set forth in Section 2.09. 
 “Final Determination” means with respect to any issue (a) a decision, judgment, decree or other order by any court of competent
jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement (whether or not entered into under Section 7121 of the Code) or any other binding settlement
agreement (whether or not with the IRS) entered into in connection with or in contemplation of an administrative or judicial proceeding, or (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is
no longer available. 
 “Income Tax” means any Tax measured by or imposed on net income. 
  

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 “Indemnifiable Losses” has the meaning set forth in the Separation Agreement.

 “Indemnitor” has the meaning set forth in Section 3.02. 
 “Independent Firm” has the meaning set forth in Article VI. 
 “Investment Agreement” has the meaning set forth in the third recital. 
 “Investor” has the meaning set forth in the third recital. 
 “IRS” means the United States Internal Revenue Service. 
 “Liable Party” has the meaning set forth in Section 2.09. 
 “New
Alberto-Culver” has the meaning set forth in the preamble. 
 “New Sally” has the meaning set forth in the
preamble. 
 “Person” has the meaning set forth in the Investment Agreement. 
 “Post Change-in-Law Investor Sale” means any sale of New Sally Common Stock by the Investor or its Affiliates (other than the Sally
Parties or any Subsidiary of the Sally Parties) if and to the extent that, solely as a result of a Change-in-Law after the Distributions Date and prior to the date of such sale, such sale results in Restructuring Taxes being imposed. 
 “Post-Distribution Period” means any Taxable year or other Taxable period beginning after the Distributions Date and, in the case of any
Taxable year or other Taxable period that begins on or before and ends after the Distributions Date, that part of the Taxable year or other Taxable period that begins at the beginning of the day after the Distributions Date. 
 “Pre-Distribution Period” means any Taxable year or other Taxable period that ends on or before the close of the Distributions Date and,
in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distributions Date, that part of the Taxable year or other Taxable period through the close of the Distributions Date. 
 “Prior Payments” means, for any type of Tax Return and any Taxable year, all payments previously made to a Governmental Entity in
respect of such Tax Return for such Taxable year and the amount of any overpayment for a prior Taxable period that is creditable against the liability reportable on such Tax Return for such Taxable year. 
 “Private Letter Ruling” means any private letter ruling received from the IRS to the effect that, on the basis of the facts,
representations and assumptions set forth in the written request for such ruling which are consistent with the state of facts existing at the Distributions Time, the Share Distribution will constitute a tax-free distribution under Section 355
and part of a tax-free reorganization under Section 368(a)(1)(D) of the Code. 
 “Prohibited Acts” has the meaning
specified in Section 4.02(a). 
 “Restricted Period” has the meaning specified in Section 4.02(a).

  

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 “Restructuring Taxes” means any Taxes (and other liabilities, including, without
limitation, liability to stockholders and the costs of defending against the imposition of such Taxes and other liabilities) of any member of the Sally Group or the Alberto-Culver Group arising from or attributable to one or more of the
Transactions, including but not limited to (a) any failure of the Share Distribution to constitute a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Code, or (b) any failure of any stock of New
Alberto-Culver to qualify as “qualified property” within the meaning of Section 355(c)(2) or Section 361(c)(2) of the Code because of the application of Section 355(d) or Section 355(e) of the Code to the Share
Distribution. 
 “Ruling Request” means the ruling request and any other materials (including the attachments and
supplemental submissions to the IRS) delivered or deliverable by the Alberto-Culver Parties and others in connection with the issuance by the IRS of the Private Letter Ruling. 
 “Sally” has the meaning set forth in the preamble. 
 “Sally Compensation Payments” has the meaning set forth in Section 2.06(d). 
 “Sally Group” means New Sally, Sally and the Sally Subsidiaries. 
 “Sally Parties” has the
meaning set forth in the preamble. 
 “Sally Subsidiary” means each direct and indirect Subsidiary of Sally other than a
member of the Alberto-Culver Group. 
 “Sally Tainting Act” means: 
 (a) any action (or failure to take any reasonably available action) by any of the Sally Parties or any Affiliate of the Sally Parties after the
Distributions Date; or 
 (b) any Prohibited Act performed by any of the Sally Parties or any Affiliate of the Sally Parties after the
Distributions Date; 
 provided that: 
 (A) except as otherwise provided in clauses (B) and (C) below, the following shall not constitute a Sally Tainting Act: (i) any sale of New Sally Common Stock by the Investor or its Affiliates (other
than the Sally Parties or any Subsidiary of the Sally Parties), (ii) any action contemplated by the Investment Agreement or any of the Transaction Agreements, including for the avoidance of doubt the distribution of the New Aristotle Common
Stock in the Share Distribution, the Equity Investment and the issuance of the Substitute Sally Options, (iii) any action taken by any Family Shareholder or any issuance of New Sally Common Stock at the request of Alberto-Culver pursuant to
Section 4.05, or (iv) any action, failure to take any action, or Prohibited Act described in clause (a) or (b) above taken pursuant to any agreement or arrangement of any member of the Sally Group or the Alberto-Culver Group
entered into on or prior to the Distributions Date, including for the avoidance of doubt the issuance of any New Sally stock pursuant to any Substitute Sally Option, 
  

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 (B) any sale of New Sally Common Stock by the Investor or its Affiliates (other than the Sally Parties or
any Subsidiary of the Sally Parties) until the first anniversary of the Distributions Date shall not be excluded from the meaning of Sally Tainting Act under any clause of paragraph (A) above, and 
 (C) any Post Change-in-Law Investor Sales during the period beginning on the date after the first anniversary of the Distributions Date and ending on the
second anniversary of the Distributions Date shall not be excluded from the meaning of Sally Tainting Act under any clause of paragraph (A) above. 
 “Sally Taxes” means any Taxes (excluding Restructuring Taxes) that are treated as Sally Taxes under this Agreement. 
 “Sally Separate Group Basis” means, in the case of any Covered Group Taxes for a Covered Group Year, the amount of such Covered Group Taxes for such Covered Group Year that would have been due if the
underlying Covered Group consisted solely of members of the Sally Group and did not include any members of the Alberto-Culver Group and computed (i) by taking into account elections and accounting methods actually used in computing such Covered
Group Taxes for such Covered Group Year, (ii) with appropriate adjustments to take into account the application of Treasury Regulations §1.1502-13 or similar provisions of state and local Tax law to any intercompany transactions between
members of the Sally Group (on one hand) and members of the Alberto-Culver Group (on the other hand) and (iii) with such other adjustments as are contemplated by this Agreement. 
 “Separation Agreement” has the meaning set forth in the second recital. 
 “Share Distribution” has the meaning set forth in the second recital. 
 “Shared Return” means a Tax Return described in clause (a) or (b) of Section 2.01. 
 “Specified AC Tax” has the meaning set forth in Section 2.05(b). 
 “Standalone Sally Tax” has the meaning set forth in Section 2.05(b). 
 “Standalone Sally Income Tax” means a Standalone Sally Tax constituting an Income Tax. 
 “Subsidiary” means, when used with respect to any Person, any corporation or other organization, whether incorporated or unincorporated,
at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries. 
 “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) has the meaning set forth in the Investment Agreement. 
  

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 “Tax Carryover Attribute” has the meaning specified in Section 2.08.

 “Tax Opinion” means the tax opinion described in Section 7.1(g) of the Investment Agreement. 
 “Tax Return” means any return, report or similar statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax. 
 “Transaction Taxes” has the meaning set forth in Section 2.04(b). 
 ARTICLE II 
 TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS 
 SECTION 2.01. Obligations to File Tax Returns. 
 (a) From and after the Distributions Time, New
Alberto-Culver shall prepare and timely file or cause to be timely filed all original Income Tax Returns with respect to any member of the Sally Group for any Taxable year ending on or before September 30, 2006 (including any original Income
Tax Return for any Covered Group Taxes for any Taxable year ending on or before September 30, 2006), whether or not such Income Tax Return includes any member of the Alberto-Culver Group. 
 (b) From and after the Distributions Time, New Sally shall prepare and timely file or cause to be timely filed all Covered Group Income Tax Returns for
Covered Group Years which begin after September 30, 2006 that (i) are required to be filed by New Sally and (ii) are due after the Distributions Date. 
 (c) From and after the Distributions Time, New Alberto-Culver shall, in addition to the Income Tax Returns described in clause (a), prepare and timely file or cause to be timely filed any other Tax Return (other than
any Income Tax Returns described in clause (b) or (d)) with respect to any member of the Alberto-Culver Group. 
 (d) From and after the
Distributions Time, New Sally shall, in addition to the Income Tax Returns described in clause (b), prepare and timely file or cause to be timely filed any other Tax Returns (other than an Income Tax Return described in clause (a)) with respect to
any member of the Sally Group. 
 (e) All Tax Returns relating to any member of the Sally Group for Taxable years or periods ending on or
before or including the Distributions Date shall (to the extent permitted by Applicable Laws) be prepared on a basis consistent with the elections, methods of accounting, positions, conventions and principles of taxation and the manner in which any
Tax item or other information is reported as reflected in comparable Income Tax Returns filed before the date of this Agreement, provided that a different method can be used (x) if it would not increase Taxes for which the Alberto-Culver
Group would be responsible under this Agreement or (y) with the prior written consent of New Alberto-Culver (such consent not to be unreasonably withheld). The preceding sentence shall not apply (i) to the extent otherwise contemplated or
required by the Ruling Request or Private Letter Ruling, or (ii) if there has been a change in Applicable 
  

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 Laws. Consent shall not be considered unreasonably withheld within the meaning of the second preceding sentence if such
different method would increase Taxes for which the Alberto-Culver Parties would be responsible under this Agreement and for which New Sally does not compensate the Alberto-Culver Parties. New Alberto-Culver shall (A) make available to New
Sally any Shared Return it is responsible for filing at least 30 calendar days prior to filing, provided that New Sally shall supply New Alberto-Culver with all information regarding any member of the Sally Group necessary for preparing such
Shared Return at least 60 calendar days prior to the due date for filing such Shared Return, and (B) make reasonable revisions to such Shared Returns that are requested by New Sally. New Sally shall (A) make available to New Alberto-Culver
any Shared Return it is responsible for filing at least 30 calendar days prior to filing, provided that New Alberto-Culver shall supply New Sally with all information regarding any member of the Alberto-Culver Group necessary for preparing
such Shared Return at least 60 calendar days prior to the due date for filing such Shared Return, and (B) make reasonable revisions to such Shared Return that are requested by New Alberto-Culver. 
 (f) New Alberto-Culver or New Sally as the case may be shall bear 100% of out-of-pocket costs, including accountants’ and attorneys’ fees,
incurred after the Distributions Date in preparing any Shared Returns it is responsible for preparing and filing under Section 2.01. 
 SECTION 2.02. Obligation to Remit Taxes. Following the Distributions Date, New Sally and New Alberto-Culver shall each timely remit or cause to be remitted any Taxes due in respect of any Tax Return it is required to file or
cause to be filed pursuant to Section 2.01. 
 SECTION 2.03. Tax Indemnity; Prior Agreements; Refunds. 

(a) From and after the Distributions Time, the Alberto-Culver Parties shall, in a manner consistent with the principles of Section 4.05(a) of the
Separation Agreement, indemnify, defend, and hold harmless the Sally Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by one or more of the Sally Indemnified Parties in connection with, relating to, arising
out of, or due to, directly or indirectly, (i) any Alberto-Culver Taxes (including, for the avoidance of doubt, any Alberto-Culver Taxes arising from a redetermination thereof from an audit or examination); and (ii) any amount for which
New Alberto-Culver is liable under Section 2.04. Any amount payable by the Alberto-Culver Parties to the Sally Parties with respect to any Tax pursuant to this Section 2.03(a) shall be reduced by any direct or indirect
payments made by the Alberto-Culver Parties or any Alberto-Culver Affiliate with respect to such Tax after the Distributions Date to any Sally Indemnified Party. 
 (b) From and after the Distributions Time, the Sally Parties shall, in a manner consistent with the principles of Section 4.05(a) of the Separation Agreement, indemnify, defend, and hold harmless the
Alberto-Culver Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by one or more of the Alberto-Culver Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly,
(i) any Sally Taxes (including, for the avoidance of doubt, any Sally Taxes arising from a redetermination thereof from an audit or examination); and (ii) any amount for which New Sally is liable under Section 2.04. Any amount
payable by the Sally Parties to the Alberto-Culver Parties with respect to any Tax pursuant to this Section 2.03(b) shall be reduced by any direct or indirect payments made by the Sally Parties or any Sally Affiliate with respect to such
Tax after the Distributions Date to any Alberto-Culver Indemnified Party. 
  

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 (c) Any and all prior Tax sharing agreements or practices between the Sally Parties or any Sally
Subsidiary, on the one hand, and the Alberto-Culver Parties or any Alberto-Culver Subsidiary, on the other hand, shall automatically be terminated as of the Distributions Date (other than any such agreements set forth in the Transaction Agreements).

 (d) From and after the Distributions Time, New Alberto-Culver shall be entitled to any refund of or credit for Alberto-Culver Taxes,
provided that the Sally Parties shall be entitled to receive and retain any refund of Taxes (A) to the extent such refund is attributable to a Tax Carryover Attribute of any member of the Sally Group or (B) such refund was credited
against any liability of the Alberto-Culver Parties to the Sally Parties pursuant to Section 2.06 of this Agreement. From and after the Distributions Time, New Sally shall be entitled to any refund of or credit for Taxes to which
Alberto-Culver is not entitled pursuant to the preceding sentence. Notwithstanding the foregoing (but without duplication), any Tax refund attributable to a change in accounting method for lease accounting for the Taxable year ended
September 30, 2005 shall be considered for the account of the Alberto-Culver Parties for purposes of Section 2.06. 
 SECTION 2.04. Restructuring Taxes; Other Taxes Relating to the Distribution. 
 (a) Except to the extent otherwise
provided in the next sentence, the Alberto-Culver Parties shall be liable for 100% of any Restructuring Taxes. The Sally Parties shall be liable for any Restructuring Tax that is imposed solely as a result of a Sally Tainting Act. 
 (b) The Sally Parties shall be liable for 50% and the Alberto-Culver Parties shall be liable for 50% of any sales, transfer, value added or other similar
Taxes or fees (including all real estate, transfer Taxes and real estate recording fees but excluding patent, copyright, and trademark recording fees and similar items relating to patents, copyrights and trademarks (which are governed by
Section 6.6 of the Investment Agreement) and excluding Restructuring Taxes) payable in connection with the transactions contemplated by the Separation Agreement and the Investment Agreement (the “Transaction Taxes”). The
parties agree to timely sign and deliver such certificates or forms as are requested by the other party and may be necessary or appropriate to enable such party to file promptly and timely the Tax Returns for such Transaction Taxes with the
appropriate Taxing authorities and remit payment of the Transaction Taxes. 
 (c) Notwithstanding any other provision of this Agreement, the
Alberto-Culver Parties shall be liable for all Taxes arising from or attributable to (i) any excess loss accounts or deferred intercompany transactions taken into account under Section 1502 of the Code or Treasury Regulations issued
thereunder and any similar items (including but not limited to “deferred intercompany stock accounts” for California tax purposes) taken into account under state, local or foreign Tax laws as a result of the transactions contemplated by
the Separation Agreement and the Investment Agreement (including deferred intercompany gain attributable to the license of certain intangibles granted by Alberto-Culver to Pro-Line International, Inc.), (ii) Sections 301(c)(3) or 357(c)
of the Code and any similar provisions of state, local and foreign Tax law as a result of the transactions contemplated by the Separation Agreement or the Investment Agreement, except as described in Section 2.04(d),
(iii) recapture of any “dual 
  

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 consolidated losses” attributable to any member of the Alberto-Culver Group within the meaning of Section 1503
of the Code, (iv) any failure to withhold Taxes with respect to payments to be made to non-residents of the United States, or to employees, in connection with the transactions contemplated by the Separation Agreement, if such failure is
attributable to Alberto-Culver’s failure prior to the Distributions Date to (x) provide New Sally with an accurate estimate of earnings and profits pursuant to Section 6.10(d) of the Investment Agreement or
(y) institute proper procedures to enable New Sally to timely and properly withhold and remit such Taxes, or and (v) any Taxes arising as a result of a disallowance of deductions for expenses incurred during the Taxable year
ending September 30, 2006 relating to failed merger and acquisition related activity of the Affiliated Group. 
 (d) Notwithstanding any
other provision of this Agreement (including Section 2.04(c)), the Sally Parties shall be liable for (i) all Taxes arising from or attributable to any deferred intercompany transactions relating to sales of inventory from a
member of the Alberto Group to a member of the Sally Group (but only in an amount of Taxable income or gain not to exceed $5 million); (ii) any Tax incurred in distributing the Debt Financing proceeds from the borrower(s) thereof to New
Sally; and (iii) any Tax arising from a failure to remit Taxes with respect to payments to be made to non-residents of the United States, or employees, in connection with the transactions contemplated by the Separation Agreement, except
to the extent such failure is attributable to a failure by Alberto-Culver to institute proper procedures to enable New Sally to properly withhold under Section 2.04(c) above or provide New Sally with an accurate estimate of earnings and
profits pursuant to Section 6.10(d) of the Investment Agreement. 
 SECTION 2.05. Sally Taxes; Alberto-Culver Taxes.

 (a) The portion of any Covered Group Taxes for any Covered Group Year constituting Sally Taxes shall be computed on a Sally Separate Group
Basis. The remaining portion of any Covered Group Taxes for any Covered Group Year shall constitute Alberto-Culver Taxes. 
 (b) Any Tax
(including escheat liability) other than Covered Group Taxes (which Taxes are addressed in Section 2.05(a) above and Section 2.12 below) shall constitute (i) an Alberto-Culver Tax to the extent a member of the
Alberto-Culver Group has the primary liability to a Governmental Entity for such Tax and (ii) a Sally Tax to the extent a member of the Sally Group has the primary liability to a Governmental Entity for such Tax, provided that any Tax of
Alberto-Culver attributable to a Pre-Distribution Period for which New Sally is liable after the Distributions Date to such Governmental Entity as a “successor” to Alberto-Culver for Tax purposes for any Covered Group Year (such Tax, a
“Specified AC Tax”) shall constitute an Alberto-Culver Tax. Any Sally Taxes described in this Section 2.05(b) shall constitute “Standalone Sally Taxes”. 
 SECTION 2.06. Calculation of Estimated Pre-Closing Income Taxes; Pre-Closing vs. Post Closing Issues. 
 (a) The Required Retained Cash Amount shall include the Estimated Pre-Closing Income Taxes. “Estimated Pre-Closing Income Taxes” shall
mean the net amount of: 
  

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 (i) Pre-2007 Covered Group Taxes and Sally Standalone Income Taxes: with respect to all Shared
Returns (i.e., Income Tax Returns with respect to Covered Group Taxes or Sally Standalone Income Taxes) to be filed after the Distributions Date for a Taxable year ending on or before the Distributions Date, an estimate of the total
amount of Income Taxes that will be reflected on such Shared Returns less the Prior Payments for such Shared Returns as of the Distributions Date; 
 (ii) 2007 Group Taxes: with respect to all Shared Returns for Covered Group Taxes to be filed after the Distributions Date for any taxable year that began before and ends after the Distributions Date, an estimate of the Covered Group
Taxes reportable on such Shared Returns that are attributable to the portion of such taxable year ending on the Distributions Date (including any Taxes described in Section 2.04(c)(i), (ii) or (iii)), less the Prior
Payments for such Shared Returns as of the Distributions Date; 
 (iii) 2007 Standalone Sally Income Taxes: with respect to all Income
Tax Returns to be filed after the Distributions Date for Standalone Sally Income Taxes for any taxable year that began before and ends after the Distributions Date, an estimate of the Standalone Sally Income Taxes reportable on such Tax Returns that
are attributable to the portion of such taxable year ending on the Distributions Date, less the Prior Payments for such Tax Returns as of the Distributions Date; 
 (iv) 2007 Specified AC Taxes: with respect to all Tax Returns to be filed after the Distributions Date for Specified AC Taxes for any taxable year that began before and ends after the Distributions Date, an
estimate of the Specified AC Taxes reportable on such Tax Returns less the Prior Payments for such Tax Returns as of the Distributions Date; 
 (v) Cushion: an amount equal to $2.0 million plus an additional $500,000 for each audit shown on Schedule 2.06 of this Agreement that is not resolved and fully paid prior to the Distributions Date, as full compensation for Sally
Taxes attributable to Pre-Distribution Periods for which Tax Returns have already been filed as of the Distributions Date; and 
 (vi)
Refunds: without duplication, any Tax refunds and overpayments described in Section 2.06(f) attributable to periods ending prior to September 30, 2006 and not otherwise taken into account in clauses (i) through
(v) above. 
 (b) Upon the filing after the Distributions Date of any Shared Return required to be taken into account in computing the
Estimated Pre-Closing Income Taxes under Section 2.06(a)(i) (relating to Pre-2007 Group Taxes and Pre-2007 Standalone Sally Income Taxes), a “true-up” payment shall be made between New Sally and New Alberto-Culver to adjust for
any differences between the amounts actually reflected on such Income Tax Return and the estimates 
  

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 taken into account in computing the Estimated Pre-Closing Income Taxes. Upon the filing after the Distributions Date of
any Shared Return required to be taken into account in computing the Estimated Pre-Closing Income Taxes under Section 2.06(a)(ii) (relating to 2007 Group Taxes), a “true-up” payment shall be made between New Sally and New
Alberto-Culver to adjust for any difference between the Alberto-Culver Taxes reflected on such Income Tax Return and the Alberto-Culver Taxes estimated under Section 2.06(a)(ii) for such Shared Return (with the amount of Alberto-Culver
Taxes being determined in accordance with the principles set forth in Section 2.05(a)). Upon receipt, crediting, offset or disallowance of any refunds or overpayments taken into account under Section 2.06(a), a
“true-up” payment shall be made between New Sally and New Alberto-Culver to adjust for any differences between the amounts actually received by the New Sally Group after the Distributions Date (or the actual amount credited or offset
against a Tax for which the New Sally Group is responsible after the Distributions Date) and the amounts taken into account under Section 2.06(a). To the extent any refund or overpayment is not so received, credited or offset on or prior
to the second anniversary of the Distributions Date, (i) such refund or overpayment shall be deemed to have been disallowed and a true-up payment shall be made by New Alberto-Culver to New Sally and (ii) if such refund or overpayment is
thereafter so received, credited or offset, New Sally shall make a payment to New Alberto-Culver to reverse such true-up payment. All true-up payments pursuant to this Section 2.06(b) shall be made without duplication of true-up payments
made to the Sally Parties pursuant to Section 2.04(c) of the Separation Agreement to the extent such payments relate to Estimated Pre-Closing Income Taxes. The parties shall cooperate in simplifying the true-up procedures contemplated by this
Section 2.06(b). 
 (c) For purposes of Section 2.06(a)(ii) and (iii), in the case of any Income Taxes imposed
for a taxable year that begins before but ends after the Distributions Date, the items of income, gain, loss and deduction attributable to the portion of such taxable year ending on the Distributions Date shall be determined using the interim
closing-of-the-books method in a manner that does not distort the portion of the net taxable income treated as attributable to the pre-Distribution period or the post-Distribution period by (i) in the case of any deductions that are calculated
on an annual basis (such as the deduction for depreciation), apportioning such deductions ratably between Pre-Distribution Periods and Post-Distribution Periods on a per diem basis, (ii) equitably apportioning any adjustments under
Section 481 of the Code and similar items between the pre-Distributions Date portion and the post-Distributions Date portion (other than as a result of a filing by New Sally of an application for change in method of accounting following the
Distributions Date), and (iii) giving effect to the intent of Section 2.06(d). 
 (d) Notwithstanding any other provision of
this Agreement, to the extent permitted by law, the following amounts (the “Sally Compensation Payments”) shall be treated as deductible by New Sally or its Subsidiaries for all Income Tax purposes and attributable to taxable years
(or portions thereof) that begin after the Distributions Date: (i) any amount payable by the Sally Parties as to which Alberto-Culver is required to make a payment to Sally pursuant to Section 4.03 of the Employee Matters Agreement
representing the after-tax cost of such payment, (ii) the $3.6 million payable to Michael Renzulli in connection with the Transactions and (iii) any deduction arising by virtue of the exercise after the Distributions Time of any
compensatory option to acquire New Sally Common Stock. To the extent permitted by law, the following amounts (the “AC Compensation Payments”) shall be treated as deductible by Alberto-Culver or its Subsidiaries for all Income Tax
purposes (and not by Sally): (A) any deduction arising by 
  

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 virtue of the exercise of any compensatory option to acquire Alberto-Culver Stock or New Alberto-Culver Common Stock, and
(B) any deduction arising by virtue of the vesting prior to or after the Distributions Time of any restricted shares of Alberto-Culver Common Stock that were outstanding for corporate purposes as of the third trading day prior to the
Distributions Time. In the event that, notwithstanding the foregoing, it is determined that any Sally Compensation Payment is deductible by Alberto-Culver or any of its Subsidiaries or any AC Compensation Payment is deductible by New Sally or any of
its Subsidiaries, appropriate reconciliation payments shall be made between the parties. 
 (e) To the extent required by Applicable Laws,
the Taxable year of each member of the Alberto-Culver Group shall close at the close of the Distributions Date and the Taxable income of such year for Income Tax purposes shall be computed taking into account the principles of Treasury Regulation
Section 1.1502-76(b) or of a corresponding provision under the laws of an applicable state, local, municipal or foreign jurisdiction, except that no “ratable allocation election” for extraordinary items as defined thereunder will be
made. 
 (f) For purposes of Section 2.06(a), Tax refunds entitled to be received by New Sally or its Subsidiaries after the
Distributions Date that have been applied for but not yet received shall be treated as Prior Payments but solely to the extent the Sally Parties are permitted to retain such refunds after the Distributions Time. Any refund of Taxes received by or on
behalf of Monarch Beauty Supply Co. Ltd., which is required to be paid over to a third party under an indemnity obligation, shall not constitute a Prior Payment, except to the extent the third party has already been otherwise compensated by
Alberto-Culver prior to the Distributions Time and the obligation to the turn over such refund has thus been extinguished. To the extent such refund is received before the Distributions Time, Alberto-Culver shall have caused such refund to be paid
over to such third party and any amount not paid over shall be treated as an unpaid Alberto-Culver Tax for all purposes of this Agreement. Any other Tax refund that gives rise to an offsetting obligation to a third party shall be treated similarly.
Any overpayment or refund that would otherwise be taken into account under this Section 2.06 shall be reduced to take into account any Tax cost that would arise from such overpayment or refund. Any refund that would otherwise be taken
into account under this Section 2.06 shall exclude any interest with respect thereto for periods after the Distributions Date. 
 SECTION 2.07. Tax Attributes. Tax benefit carryforwards to Post-Distribution Periods, including net operating loss carryforwards, net capital loss carryforwards, foreign Tax credit carryforwards and research and development
credit carryforwards shall be computed and allocated between the Alberto-Culver Group and the Sally Group based on the group that generated such item, except to the extent otherwise provided under Applicable Laws. 
 SECTION 2.08. Carryback Provisions. Unless the parties otherwise agree in writing, the Alberto-Culver Parties and the Sally Parties shall
elect and shall cause each of the Alberto-Culver Subsidiaries or Sally Subsidiaries to elect, where permitted by Applicable Laws, to carry forward any loss, credit or similar Tax attribute (“Tax Carryover Attribute”) arising in a
Post-Distribution Period, with respect to a Shared Return, that could, in the absence of such election, be carried back to a Pre-Distribution Period. Any refund or credit of Taxes resulting from the required carryback of any Tax Carryover Attribute
attributable to a member of the Alberto-Culver Group arising in a Post-Distribution Period shall be for the account and benefit of New 
  

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 Alberto-Culver; provided, however, that New Sally shall only be required to pay such amount to New Alberto-Culver at the
time such amount is actually realized in cash, credit, refund or offset by the Sally Group after taking into account (i) all other Tax attributes of the Affiliated Group and (ii) any carryback of any Tax Carryover Attribute attributable to
any member of the Sally Group. Any refund, credit or offset of Taxes resulting from the carryback of any Tax Carryover Attribute attributable to a member of Sally Group arising in a Post-Distribution Period shall be for the account and benefit of
New Sally. If a member of the Alberto-Culver Group recognizes a Tax Carryover Attribute that, under Applicable Laws, must be carried back to a Pre-Distribution Period during which Alberto-Culver or any Alberto-Culver Subsidiary joined in filing a
Tax Return on a consolidated, combined, or unitary basis with one or more of New Sally, Sally or any Sally Subsidiary, New Sally shall, at the expense of New Alberto-Culver, file appropriate refund claims within a reasonable period after being
requested by New Alberto-Culver to do so, unless such filing shall affect the liability or any attributes of the Sally Parties or any of their Affiliates under this Agreement (including the ability of any member of the Sally Group to carry back a
Tax attribute), in which case such filing shall be subject to New Sally’s prior written consent (such consent not to be unreasonably withheld). Consent shall not be considered unreasonably withheld within the meaning of the preceding sentence
if such filing would increase Taxes for which the Sally Parties would be responsible under this Agreement and for which New Alberto-Culver does not compensate the Sally Parties. If a refund claim for which the Alberto-Culver Parties have received
payment from the Sally Parties is subsequently disallowed by the relevant Governmental Entity, the Alberto-Culver Parties shall promptly return such payment to the Sally Parties together with any interest, penalties and additions to Tax resulting
from such disallowance. No member of either the Sally Group or the Alberto-Culver Group shall claim “group relief” for United Kingdom corporation tax purposes with respect to any member of the other group without the prior written consent
of such other group (such consent not to be unreasonably withheld). New Sally agrees to elect to claim a credit (rather than a deduction) for all foreign Taxes paid, deemed paid or accrued with respect to its Shared Return that includes the
Distributions Date. New Sally shall allow the Alberto-Culver Parties to prepare and file a claim for refund for any such creditable foreign Taxes which can be carried back to a preceding Tax year. Any Tax refund resulting from such foreign Tax
credit carryback claim shall be allocated to the Alberto-Culver Parties in a ratio of the foreign Taxes paid, deemed paid or accrued prior to the Distributions Date divided by the total foreign Taxes paid, deemed paid or accrued with respect to the
entire Taxable year. Any remaining Tax refund shall be allocated to the Sally Parties. 
 SECTION 2.09. General Tax Payments.
With respect to any Taxes for which one party (the “Liable Party”) is liable under Article II and that are to be remitted in connection with Tax Returns to be filed by the other party (the “Filing Party”)
after the Distributions Date, the Liable Party shall make any payment of estimated Taxes no later than the fifth day after receipt of written request (but not before the fifth date preceding the due date for such payment) from the Filing Party
setting forth the Filing Party’s good faith estimate of the Liable Party’s portion of the estimated Taxes to be remitted. Promptly after the date that the Tax Return for the Taxable period is due (including extensions), the Filing Party
shall provide a written request to the Liable Party describing in reasonable detail the amount of any true-up payment owed to the Filing Party and to be made by the Liable Party or any true-up payment owed by the Filing Party to the Liable Party as
a result of an overpayment by the Liable Party. A true-up payment shall be made no later than fifteen (15) days after receipt of the written request for the true-up payment.  
  

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 SECTION 2.10. Other Payments. Other payments due to a party under Article II shall
be due (a) in the case of the receipt or crediting of a refund, five (5) days after such receipt or crediting and (b) in the case of a Final Determination, or the completion of an audit, assessment or examination or similar event,
(2) days prior to the date payment is to be made to the Governmental Entity. In the case of a delay in payment, the party required to have made payment shall pay interest to the other party at the Applicable Federal Rate. 
 SECTION 2.11. Notice. New Sally and the New Alberto-Culver shall give each other prompt written notice of any payment that may be due under
this Agreement, provided that any failure to notify shall not cause any party to forfeit substantive rights, except to the extent the other party is materially prejudiced thereby. Any payment that may be due under this Agreement is to be made
by wire transfer of immediately available funds to the account designated by New Sally or New Alberto-Culver in such notice or by any other method as shall be agreed upon by New Sally and New Alberto-Culver. 
 SECTION 2.12. Audit or Redetermination of U.S. Federal Income Tax Liability or U.S. State, Local or Municipal Consolidated, Combined or Unitary
Income Tax Liability. 
 (a) With respect to an audit or redetermination of any Covered Group Taxes for any Covered Group Year, the amount
constituting Sally Taxes (other than with respect to Restructuring Taxes) shall be determined on the Sally Separate Group Basis with respect to the Sally Group and any remaining Taxes arising from such audit or redetermination shall constitute
Alberto-Culver Taxes. 
 (b) To the extent required by Applicable Laws, with respect to any Income Tax audit or redetermination of any
foreign Tax credit claimed with respect to any Pre-Distribution Period, in the determination of foreign source income, the research and development expenses, interest expenses, and other general administrative expenses shall be allocated to the
foreign source income which gave rise to such expense allocation. 
 (c) For the avoidance of doubt, (i) any adjustment to or
redetermination of the Tax liability of the Sally Group or the Alberto-Culver Group under this Section 2.12 shall be made only with respect to Covered Group Taxes for Covered Group Years which arise by reason of an audit, adjustment,
redetermination or examination and (ii) in the case of any adjustment to any other Taxes, the liability arising therefrom shall be determined under the principles of Section 2.05(b). 
 SECTION 2.13. Amended Tax Returns. From and after the Distributions Time, the Sally Parties shall not, and shall not permit any of their
Affiliates to, file any amended Tax Return for any Pre-Distribution Period that includes Alberto-Culver or any Alberto-Culver Subsidiary without the prior written consent of New Alberto-Culver (such consent not to be unreasonably withheld) unless
such amended Tax Return does not affect the liability or any attributes of the Alberto-Culver Parties or any of their Affiliates under this Agreement or the Investment Agreement (including the ability of New Alberto-Culver to carry back a Tax
Carryover Attribute in accordance with Section 2.08). Notwithstanding the foregoing, the parties agree to file the foreign Tax credit refund claims described in Section 2.08. 
  

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 ARTICLE III 
 TAX AUDITS 
 The following provisions shall apply from and after the Distributions Time. 

SECTION 3.01. Controlling Party. Except as otherwise provided in this Agreement, New Sally shall be the Controlling Party with respect
to any Covered Group Tax for which it (or any of its Subsidiaries) has the primary liability to the Governmental Entity (e.g., U.S. federal Income Taxes) and New Alberto-Culver shall be the Controlling Party for any Covered Group Taxes
for which it (or any of its Subsidiaries) has the primary liability to the Governmental Entity. The Controlling Party with respect to any Covered Group Tax shall have the right to control the conduct and disposition of all audits or other
proceedings with respect to such Covered Group Tax, provided that New Alberto-Culver shall (subject to the other provisions of this Agreement) have the right to conduct and lead any audit or other proceedings with respect to any Covered Group
Taxes for Taxable years ending on or prior to September 30, 2006, and any audit or other proceedings relating to any Restructuring Taxes, unless such Restructuring Taxes are imposed solely as a result of a Sally Tainting Act. 
 SECTION 3.02. Indemnified Claims in General. New Sally or New Alberto-Culver shall promptly notify the other in writing upon the receipt of
any notice of audit, examination, redetermination or other like proceeding by the relevant Governmental Entity that could reasonably result in any indemnity obligation of a party under this Agreement (the “Indemnitor”), if the Indemnitor
is not also the Controlling Party, the Controlling Party shall provide the Indemnitor with information about the nature and progress of the audit, examination, redetermination or other like proceeding and, subject to additional rights of the
Indemnitor in certain circumstances under Section 3.03, shall permit the Indemnitor to participate in the proceeding at the Indemnitor’s own expense (including without limitation the right to participate in material conference calls
and meetings and to have reasonable comments incorporated in any written submission or response submitted to the relevant Tax authority to the extent such items bear on the Tax for which the Indemnitor could be liable). The Controlling Party shall
be liable for any failure to notify or provide such information to the Indemnitor, except to the extent the Indemnitor is not materially prejudiced thereby. 
 SECTION 3.03. Certain Tax Claims. Any issue raised by the relevant Governmental Entity in any Tax inquiry, audit, redetermination, examination, investigation, dispute, litigation or other proceeding that
would result in liability to the Indemnitor under this Agreement is defined as a Claim (a “Claim”). Notwithstanding any other provision of this Agreement that may be construed to the contrary, the Controlling Party agrees to contest
any Claim for which the Controlling Party is not reasonably likely to have any liability at the direction of the Indemnitor and not to settle any Claim without prior written consent of the Indemnitor, provided that (i) within 30 days after
notice of a Claim is received by the Indemnitor, the Indemnitor shall request in writing that such Claim be contested and (ii) the Indemnitor shall agree to pay (and shall pay) on demand all reasonable out-of-pocket costs, Indemnifiable Losses
(including, but not limited to, legal and accounting fees) paid or incurred by the Controlling Party in connection with contesting such Claim. The Indemnitor, at its option, may select as lead counsel of such defense any legal counsel reasonably
satisfactory to the Controlling Party. In contesting any Claim in accordance with the foregoing, the Indemnitor shall, after reasonable consultation with the 
  

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 Controlling Party, determine the nature of all actions to be taken to contest such Claim, including (x) whether any
action to contest such Claim shall initially be by way of judicial or administrative proceeding, or both, (y) whether any such Claim shall be contested by resisting payment thereof or by paying the same and seeking a refund thereof (provided
that the Indemnitor will provide funds on an interest-free basis for payment in the case of the latter course consistent with Section 3.04(b) below), and (z) the court or other judicial body before which judicial action, if any,
shall be commenced. To the extent the Indemnitor is not participating, the Controlling Party shall keep the Indemnitor (and, upon request by the Indemnitor, its counsel) informed as to the progress of the contest. In the case of a Claim for which
both the Controlling Party and the Indemnitor may bear liability, each party shall bear its own expenses in contesting such a Claim, and the parties agree to use reasonable best efforts to separate the issues for resolution, to the extent possible.
To the extent the issues cannot be separated, the parties shall, in good faith, use reasonable best efforts to jointly control the contesting of such a Claim (including the selection of lead counsel), although the party with the greater liability at
stake shall ultimately have control over the settlement or other disposition of such Claim (including decisions described in clauses (x), (y) and (z) of the fourth sentence of this Section 3.03) after affording the other party
the right to participate fully in contesting the Claim (including without limitation the right to attend material conference calls and meetings and to have reasonable comments incorporated in any written submission or response submitted to the
relevant Tax authority to the extent such items bear on the Tax for which the other party could be liable). 
 SECTION 3.04.
Payments with Respect to Claims. 
 (a) If the Indemnitor accepts full liability for a Claim and requests that the Controlling
Party accept a settlement of a Claim offered by the relevant Taxing authority and if such Claim may, in the reasonable discretion of the Controlling Party, be settled without prejudicing its ability to defend against any claims the relevant Taxing
authority may have with respect to matters unrelated to the Claim, the Controlling Party shall either accept such settlement offer or agree with the Indemnitor that the Indemnitor’s liability with respect to such Claim shall be limited to the
lesser of (i) an amount calculated on the basis of such settlement offer plus interest owed to the relevant Taxing authority on the date of eventual payment or (ii) the amount calculated on the basis of a Final Determination. 

(b) If it is determined that the Controlling Party shall pay the Tax claimed and seek a refund, the Indemnitor shall lend sufficient funds on an
interest-free basis to the Controlling Party (with no net after-Tax cost to the Controlling Party), to cover any applicable indemnity obligations of the Indemnitor under this Agreement. To the extent such refund claim is ultimately disallowed, the
loan or portion thereof equal to the amount of the refund claim so disallowed shall be applied against the Indemnitor’s obligation to make indemnity payments pursuant to this Agreement. To the extent such refund claim is allowed, the
Controlling Party shall pay to the Indemnitor all amounts advanced to the Controlling Party with respect to the indemnity obligation within 10 days of the receipt of such refund (or if the Controlling Party would have received such refund but for
the existence of a counterclaim or other claim not indemnified by the Indemnitor under this Agreement, within 10 days of the final resolution of the contest), plus an amount equal to any interest received (or that would have been received) from the
relevant Taxing authority that is properly attributable to such amount. 
  

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 (c) Except as provided below, the Controlling Party shall not settle a Claim that the Indemnitor is
entitled to require the Controlling Party to contest under Section 3.03 without the prior written consent of the Indemnitor. At any time, whether before or after commencing to take any action pursuant to this Article III with
respect to any Claim, the Controlling Party may decline to take action with respect to such Claim and may settle such Claim without the prior written consent of the Indemnitor by notifying the Indemnitor in writing that the Indemnitor is released
from its obligations to indemnify the Controlling Party with respect to such Claim (which notification shall release the Indemnitor from such obligations except to the extent the Indemnitor has agreed in writing that it would be willing to have its
liability calculated on the basis of a settlement offer, as provided in Section 3.04(a), at that point in the contest) and with respect to any Claim related to such Claim or based on the outcome of such Claim. If the Controlling Party
settles any Claim or otherwise takes or declines to take any action pursuant to this paragraph, the Controlling Party shall pay to the Indemnitor any amounts paid or advanced by the Indemnitor with respect to such Claim (other than amounts payable
by the Indemnitor in connection with a settlement offer pursuant to Section 3.04(a)), plus interest attributable to such amounts. 
 (d) If any party required to make a payment hereunder fails to make such payment when required by this Agreement (or, if no required time period is specified, within 10 Business Days of written request by the party to whom the payment is
due), the amount due shall bear interest at a rate equal to the prime rate of Citibank, N.A. in effect on the date such payment was required to be made plus 2%. 
 ARTICLE IV 
 COOPERATION 
 The following provisions shall apply from and after the Distributions Time. 
 SECTION 4.01. Inconsistent Actions. Each party hereto agrees to, and to cause each of its Affiliates to, (a) report the Alberto-Culver
Merger and the Alberto-Culver Conversion together as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code, the Alberto-Culver Contribution followed by the Share Distribution as a tax-free reorganization within the
meaning of Section 368(a)(1)(D) of the Code, and the Share Distribution as a distribution eligible for nonrecognition under Sections 355(a) and 361(c) of the Code on all Tax Returns and other filings, and (b) comply with and take no action
inconsistent with the representations and covenants provided to the IRS in connection with obtaining the Private Letter Ruling, and (c) not fail to be engaged in the conduct of the active trade or businesses relied upon for purposes of
satisfying the requirements of Section 355(b) of the Code for purposes of the Private Letter Ruling. For all Post-Distribution Periods, each party to this Agreement agrees to, and to cause each of its Affiliates to, in the absence of a
controlling change in Applicable Laws or circumstances, report on all Tax Returns, the Tax consequences of the transactions undertaken pursuant to the Transaction Agreements and the Investment Agreement in accordance with the positions taken with
respect to such transactions to the extent reported on Tax Returns filed with respect to all Covered Group Years in respect of such transactions. For the avoidance of doubt, any action described in proviso (A) to the definition of Sally
Tainting Act (applied without regard to provisos (B) and (C) thereto) shall not be considered a violation by the Sally Parties of Section 4.01(b). 
  

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 SECTION 4.02. Prohibited Acts. 
 (a) For 24 months following the Distributions Date (the “Restricted Period”), each of the Sally Parties and their Affiliates, on the one
hand, and each of the Alberto-Culver Parties and its Affiliates, on the other hand, agree that they will not (i) redeem or otherwise repurchase any capital stock of New Sally or New Alberto-Culver other than pursuant to open market stock
repurchase programs meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696, or (ii) enter into any agreements or arrangements with respect to transactions or events (including, but not limited to, capital
contributions or acquisitions, entering into any partnership or joint venture arrangements, stock issuances, stock acquisitions, option grants, or a series of such transactions or events (but excluding the Share Distribution)), in the case of each
of clauses (i) and (ii) above that, if considered part of a plan that includes the Share Distribution would result in one or more Persons acquiring, directly or indirectly, stock of New Sally or New Alberto-Culver representing a
“50-percent or greater interest” therein within the meaning of Section 355(d)(4) of the Code (the acts described in Section 4.01 hereof and clauses (i) and (ii) above, collectively, the “Prohibited
Acts”). Notwithstanding the foregoing, the following shall not be considered a Prohibited Act: (v) the issuance of any compensatory options by New Sally, (w) the issuance of any New Sally stock pursuant to any New Sally
compensatory option, and (x) the repurchase of any New Sally restricted stock, in each case described in clauses (v), (w) and (x), if such action satisfies the conditions of Treasury Regulation 1.355-7(d)(8)(i) and (y) the acts
described in proviso (A) to the definition of Sally Tainting Act (applied without regard to provisos (B) and (C) thereto). For the avoidance of doubt, any issuance of additional equity or rights to acquire new equity by New Sally to
Investor or to new investors (other than pursuant to the preceding sentence) or a secondary acquisition of New Sally stock by Investor during the Restricted Period shall be considered a Prohibited Act. 
 (b) Notwithstanding the foregoing, a party may take any of the Prohibited Acts, subject to Section 2.04, if, (i) in the case of the
Alberto-Culver Parties and their Affiliates, (A) New Alberto-Culver first obtains (at its expense) an opinion in form and substance reasonably acceptable to New Sally of Sidley Austin LLP or another nationally recognized law firm reasonably
acceptable to New Sally, which opinion may be based on usual and customary factual representations, or (B) at New Alberto-Culver’s request, New Sally (at New Alberto-Culver’s expense) obtains a supplemental ruling from the IRS, or,
(ii) in the case of New Sally and its Affiliates, (A) New Sally first obtains (at its expense) an opinion in form and substance reasonably acceptable to New Alberto-Culver of Debevoise & Plimpton LLP or another nationally
recognized law firm reasonably acceptable to New Alberto-Culver, which opinion may be based on usual and customary factual representations or (B) New Sally (at its expense) obtains a supplemental ruling from the IRS, in each case that such
Prohibited Act(s), and any transaction related thereto, will not affect any of the conclusions set forth in the Private Letter Ruling or Tax Opinion, including (i) the qualification of the Share Distribution under Section 355 and
Section 368(a)(1)(D) of the Code, and (ii) the nonrecognition of gain to New Sally in the Share Distribution. A party may also take any of the Prohibited Acts, subject to Section 2.04, with the written consent of the other
party in the other party’s sole and absolute discretion. During the Restricted Period, the parties shall provide, and shall cause their respective Affiliates to provide, all information reasonably requested by the other party relating to any
transaction involving an acquisition (directly or indirectly) of that party’s stock within the meaning of Section 355(e) of the Code. The parties hereto agree that the payment of monetary compensation 
  

 19 

 would not be an adequate remedy to a breach of the obligations described in the Prohibited Acts, and each party consents
to the issuance and entry of an injunction to prevent a breach of the obligations contained in the Prohibited Acts, subject to the waiver and consent described in the preceding sentence. New Alberto-Culver represents that, to its knowledge, from the
date of this Agreement until the time of the Distributions, and except as contemplated by the Investment Agreement or the Transaction Agreements, there will be no agreement, understanding, arrangement or substantial negotiations by New Sally (or any
of its Subsidiaries) concerning any acquisition of New Sally stock for purposes of applying Treas. Reg. § 1.355-7(d)(3) and an opinion and/or ruling obtained in accordance with Section 4.02(b)(ii) may assume the accuracy of such
representation. 
 SECTION 4.03. Cooperation with Respect to Tax Return Filings, Examinations and Tax Related Controversies. In
addition to any obligations imposed pursuant to the Separation Agreement, each party shall fully cooperate with the other party and its representatives, in a prompt and timely manner, in connection with (i) the preparation and filing of and
(ii) any inquiry, audit, redetermination, examination, investigation, dispute, or litigation involving, any Tax Return required to be filed by such other party pursuant to this Agreement. Such cooperation shall include, but not be limited to,
(x) the execution and delivery to such other party of any power of attorney required to allow such other party and its counsel to participate in or control any inquiry, audit or other administrative proceeding and to assume the defense or
prosecution, as the case may be, of any suit, action or proceeding pursuant to the terms of and subject to the conditions set forth in Article III, and (y) making available, during normal business hours, and within 15 days of any written
request therefor, all books, records and information, and the assistance of all officers and employees, necessary or useful in connection with the preparation of any Tax return or any Tax inquiry, audit, redetermination, examination, investigation,
dispute, litigation or any other matter. Any recoveries by the Sally Parties, the Alberto-Culver Parties, or any of their respective Affiliates against third parties (including awards for damages) relating to Restructuring Taxes shall be shared and
allocated by the parties consistently with the allocation of the underlying Restructuring Taxes. 
 SECTION 4.04. Cooperation with
Respect to Particular Tax Return Filings. With respect to each Alberto-Culver Subsidiary disclosed on Schedule 4.04 of this Agreement for which a Treasury Regulation Section 1.1503-2T(g)(2) election has or will be made for Pre-Distribution
Periods, New Alberto-Culver shall prepare and New Sally shall timely file or cause to be timely filed a closing agreement with the IRS pursuant to Treasury Regulation Section 1.1503-2(g)(2)(iv)(B)(3)(i). New Alberto-Culver shall cause any
Alberto-Culver Affiliate required to execute such closing agreement to actually execute such closing agreement, cooperate with the completion and timely filing of the closing agreement and accept and assume the Tax obligations related to the closing
agreement. The Alberto-Culver Parties shall, in a manner consistent with Article IV of the Separation Agreement (including the principles of Section 4.05 of the Separation Agreement), indemnify, defend, and hold harmless the Sally Indemnified
Parties from and against, any and all Indemnifiable Losses incurred or suffered by one or more of the Sally Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly any inaccuracy of any item disclosed
on Schedule 4.04. 
 SECTION 4.05. Other Tax Matters. The Sally Parties agree not to take any action for a period of two years
following the Distributions Date that would be reasonably likely to cause the 
  

 20 

 original acquisition of Monarch Beauty Supply Co. Ltd. to fail to qualify as a tax-free reorganization under
Section 368(a)(1)(B) of the Code, provided that (a) the Sally Parties shall in no event be required under this Section 4.05 to pay any amount after the Distributions Time in excess of any refunds or other similar amounts
received by the Sally Parties after the Distributions Time and (ii) the Sally Parties shall only be required to issue New Sally Common Stock in connection therewith to the extent requested by Alberto-Culver. 
 ARTICLE V 
 RETENTION OF RECORDS;
ACCESS 
 The Alberto-Culver Group and the Sally Group shall retain all Information in accordance with Section 6.04 of the
Separation Agreement. At or prior to the Distributions Time, Alberto-Culver shall make available to New Sally to copy all consolidated, combined and unitary Tax Returns of the Affiliated Group and all notes, workpapers, correspondence and other
records related thereto. 
 ARTICLE VI 
 DISPUTES 
 From and after the Distributions Time, if New Alberto-Culver and New Sally cannot agree on
the calculation of any liability under this Agreement, or the interpretation or application of any provision under this Agreement, either party may provide to the other party written notice of intent to invoke the dispute resolution procedures of
this Article VI. Within 10 days following the receipt of such written notice, New Alberto-Culver and New Sally shall jointly retain a nationally recognized law firm or “big four” accounting firm, which firm is independent of both
parties (the “Independent Firm”), to resolve the dispute. If the parties cannot jointly agree on an Independent Firm to resolve the dispute within the 10 day period, then each party shall select a nationally recognized law firm or
“big four” accounting firm, which firm is independent of both parties, and both law or accounting firms shall jointly select an Independent Firm which shall make the determination under this Article VI. The Independent Firm shall act as an
arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved. The Independent Firm shall determine the appropriate outcome based upon this Agreement with respect to each disputed item. The
Independent Firm shall have 90 days from the date that it is selected in which to make such determinations, unless New Alberto-Culver and New Sally mutually agree on an extension of such period or the Independent Firm, in its discretion, determines
that an extension of such period is warranted by exceptional circumstances. New Alberto-Culver and New Sally shall provide the Independent Firm with such information or documentation as the Independent Firm deems in its discretion to be necessary
for it to make the determinations requested of it. Any determination by the Independent Firm shall be in writing. Following the decision of the Independent Firm, New Alberto-Culver and New Sally shall each take or cause to be taken any action
necessary to implement the decision of the Independent Firm. The fees and expenses relating to the Independent Firm shall be borne by the party that such Independent Firm determines has lost the dispute. Notwithstanding the foregoing, this
Article VI shall not apply to any dispute arising under Section 2.04 with respect to the respective liability of the parties in the event Restructuring Taxes are imposed. 
  

 21 

 ARTICLE VII 
 SURVIVAL OF LIABILITIES 
 Notwithstanding any other provision in this Agreement, any liabilities
under this Agreement shall survive for 60 days following any applicable statute of limitation; provided, however, that each party may continue to demand the full amount of payment to be made with respect to any such liabilities under this Agreement
and such liabilities shall continue to survive until paid in full in accordance with this Agreement. 
 ARTICLE VIII 
 MISCELLANEOUS 
 SECTION 8.01.
Entire Agreement; Construction. This Agreement, the Separation Agreement, the Investment Agreement and the Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred
to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature,
whether oral or written, with respect to such subject matter. Notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there is a conflict relating to Taxes between the provisions of this Agreement
and the provisions of the Separation Agreement, the Investment Agreement or any other Ancillary Agreements the provisions of this Agreement shall control. 
 SECTION 8.02. Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement will remain in full force and effect and
survive the Distributions Time. 
 SECTION 8.03. Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware (without giving effect to choice of law principles thereof). 
 SECTION 8.04. Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by telefacsimile, (iii) on the first
Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice: 
  

					
	(a)	 	If to New Alberto-Culver or Alberto-Culver, to:
		
		 	Alberto-Culver Company
		 	2525 Armitage Avenue
		 	Melrose Park, Illinois 60160
			
		 	Fax:	 	(708) 450-2511
		 	Attention:	 	Chief Executive Officer
		 		 	 Senior Vice President and
 General Counsel (with a
separate notice to be sent to each such person)

  

 22 

					
		 	with a copy to
		
		 	Sidley Austin LLP
		 	One South Dearborn Street
		 	Chicago, Illinois 60603
		 	Fax:	  	(312) 853-7036
		 	Attention:	  	Frederick C. Lowinger, Esq.
		 		  	David J. Zampa, Esq.
		
	(b)	 	If to New Sally or Sally, to:
		
		 	Sally Holdings, Inc.
		 	3001 Colorado Blvd.
		 	Denton, Texas 76210
		 	Fax:	  	(940) 297-4990
		 	Attention:	  	Vice President and General Counsel
		
		 	with a copy at any time prior to the Distributions Time to
		
		 	Sidley Austin LLP
		 	One South Dearborn Street
		 	Chicago, Illinois 60603
		 	Fax:	  	(312) 853-7036
		 	Attention:	  	Frederick C. Lowinger, Esq.
		 		  	David J. Zampa, Esq.
		
		 	And with a copy at any time to
		
		 	CDRS Acquisition LLC
		 	c/o Clayton, Dubilier & Rice Fund VII, L.P.
		 	1403 Foulk Road, Suite 106
		 	Wilmington, DE 19803
		 	Fax:	  	(302) 427-7398
		
		 	With a copy to
		
		 	Debevoise & Plimpton LLP
		 	919 Third Avenue
		 	New York, New York 10022
		 	Fax:	  	(212) 909-6836
		 	Attention:	  	Paul S. Bird, Esq.

  

 23 

 SECTION 8.05. Payments. Any payment that may be due under this Agreement is to be made by
wire transfer of immediately available funds to the account designated by the Alberto-Culver Parties or the Sally Parties in such notice or by any other method as shall be agreed upon by the Alberto-Culver Parties and the Sally Parties. 

SECTION 8.06. Consent to Jurisdiction. Each of the Sally Parties and the Alberto-Culver Parties irrevocably agrees that any legal action
or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another
party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of the Sally Parties and the Alberto-Culver Parties hereby irrevocably submits with regard to
any such action or proceeding for themselves and in respect to their property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of the Sally Parties and the Alberto-Culver Parties hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement,
validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to
the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts. 
 SECTION 8.07. Amendments. This Agreement cannot be
amended except by a written agreement executed by the Alberto-Culver Parties and the Sally Parties; provided, that unless the Investment Agreement shall have been terminated, any such amendment shall be subject to the prior written consent of
Investor, such consent not to be unreasonably withheld, conditioned or delayed. 
 SECTION 8.08. Assignment. No party to this
Agreement will (or permit any of the members of its Group to) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other parties in their sole and
absolute discretion; provided that the Sally Parties may assign this Agreement and all of their rights hereunder to their lenders and debt providers for collateral security purposes; and further provided, that unless the Investment
Agreement shall have been terminated, any such assignment prior to the Distributions Time shall be subject to the prior written consent of Investor. Any conveyance, assignment or transfer requiring the prior written consent of the other parties or
Investor pursuant to this Section 8.08 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and permitted assigns. The obligations of New Alberto-Culver and Alberto-Culver under this Agreement shall be binding upon any Person that acquires all or substantially all
the assets or stock of New Alberto-Culver, whether by merger, amalgamation or 
  

 24 

 consolidation, asset purchase, stock purchase or subscription or otherwise, and New Alberto-Culver shall not enter into
any agreement for any such transaction that does not so expressly provide in writing. The obligations of Sally and New Sally under this Agreement shall be binding upon any Person that acquires all or substantially all the assets or stock of New
Sally, whether by merger, amalgamation or consolidation, asset purchase, stock purchase or subscription or otherwise, and New Sally shall not enter into any agreement for any such transaction that does not so expressly provide in writing.

 SECTION 8.09. Captions; Currency. The article, section and paragraph captions herein and the table of contents hereto are
for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to
articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or
document delivered pursuant hereto to dollars or “$” shall mean United States Dollars. 
 SECTION 8.10.
Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic
or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties and Investor will negotiate in good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties. 
 SECTION 8.11. Parties in Interest. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement, except that the provisions of Sections 8.08 and 8.10, the proviso in Section 8.07, the proviso
in Section 8.13 and this sentence of Section 8.11 shall inure to the benefit of Investor. 
 SECTION 8.12.
Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the
respective meanings assigned to such terms in this Agreement. 
 SECTION 8.13. Waivers; Remedies. Any agreement on the part of
a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument signed on behalf of such party; provided, that unless the Investment Agreement shall have
been terminated, any such waiver shall be subject to the prior written consent of Investor, such consent not to be unreasonably withheld, conditioned or delayed. No failure or delay on the part of either the Sally Parties or the Alberto-Culver
Parties in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will 
  

 25 

 any waiver on the part of either the Sally Parties or the Alberto-Culver Parties of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder, nor will 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. 
 SECTION 8.14. Counterparts. This Agreement may be executed in separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. 
 SECTION
8.15. Performance. The Sally Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries. The Alberto-Culver Parties will
cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries. 
 SECTION 8.16. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It
is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity. 
 SECTION 8.17. Interpretation. Any reference herein to any federal, state, local, or foreign law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”. 
 SECTION 8.18. Mutual Drafting. This Agreement shall be deemed to be the joint work product of the Sally Parties and the Alberto-Culver
Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 26 

 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers
of the parties as of the date first hereinabove written. 
  

			
	NEW SALLY HOLDINGS, INC.
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	President
	
	SALLY HOLDINGS, INC.
		
	By:	 	 /s/ Gary Winterhalter

	Name:	 	Gary Winterhalter
	Title:	 	President
	
	NEW ARISTOTLE HOLDINGS, INC.
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	President
	
	ALBERTO-CULVER COMPANY
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	 Senior Vice President, General
 Counsel and
Secretary

  

 27Employee Matters Agreement

 Exhibit 10.02 
 EMPLOYEE MATTERS AGREEMENT 
 This Employee Matters Agreement, dated as of June 19, 2006, is
among New Sally Holdings, Inc., a Delaware corporation (“New Sally”), Sally Holdings, Inc., a Delaware corporation (“Sally”) (New Sally and Sally, collectively the “Sally Parties”), Alberto-Culver
Company, a Delaware corporation (“Alberto-Culver”) and New Aristotle Holdings, Inc., a Delaware corporation (“New Alberto-Culver”) (Alberto-Culver and New Alberto-Culver, collectively the “Alberto-Culver
Parties”). 
 RECITALS 
 WHEREAS, the Sally Parties, the Alberto-Culver Parties and New Aristotle Company, a Delaware corporation, have entered into an Investment Agreement, dated as of the date hereof (the “Investment Agreement”) with CDRS
Acquisition LLC, a Delaware limited liability company (“Investor”), pursuant to which Investor will purchase shares of New Sally common stock (“New Sally Common Stock”) for $575 million (“Equity
Investment”); 
 WHEREAS, in connection with the transactions contemplated by the Investment Agreement, one or more of the members
of the Sally Group will incur $1.85 billion of indebtedness (the “Debt Financing”), so that between the Equity Investment and Debt Financing, a total of $2.425 billion is raised; 
 WHEREAS, the Board of Directors of Alberto-Culver has determined that it is in the best interests of Alberto-Culver and its stockholders to effect the
transactions contemplated by the Agreement and the Investment Agreement; 
 WHEREAS, New Sally, Sally, Alberto-Culver and New Alberto-Culver
have entered into a Separation Agreement dated as of the date hereof (the “Separation Agreement”) pursuant to which New Sally will distribute to the holders of shares of New Sally Common Stock, other than the shares held in the
treasury of New Sally, on a pro rata basis, (i) all of the issued and outstanding shares of New Alberto-Culver common stock (“New Alberto-Culver Common Stock”) (the “Share Distribution”) and (ii) a cash
dividend of $25 per share (the “Cash Distribution”) (the Share Distribution and the Cash Distribution collectively referred to herein as the “Distributions”); and 
 WHEREAS, in connection with the Distributions, New Sally, Sally, Alberto-Culver and New Alberto-Culver desire to enter into this Employee Matters
Agreement (this “Agreement”). 
 NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the
Separation Agreement, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 As used in this Agreement, the following terms shall have the
meanings set forth below. Capitalized terms used but not defined herein shall have the meanings set forth in the Separation Agreement. 

 1.01 “Alberto-Culver Common Stock” means the common stock, $0.22 par value per
share, of Alberto-Culver. 
 1.02 “Alberto-Culver Employee” means any individual who, at the Distributions Time, is
either actively employed by, or on an approved leave of absence from, a member of the Alberto-Culver Group. 
 1.03
“Alberto-Culver Option” means an option to acquire shares of Alberto-Culver Common Stock. 
 1.04
“Alberto-Culver Option Plan” means (a) the Alberto-Culver Employee Stock Option Plan of 2003, (b) the Alberto-Culver Employee Stock Option Plan of 1988, (c) the Alberto-Culver 2003 Stock Option Plan for
Non-Employee Directors and (d) the Alberto-Culver 1994 Stock Option Plan for Non-Employee Directors. 
 1.05 “Alberto-Culver
Pre-Distribution Stock Price” means the average of the high and low trading prices per share of Alberto-Culver Common Stock on the last Business Day (as defined in the Investment Agreement) occurring before the date on which
Alberto-Culver Common Stock begins to trade “ex-distribution.” 
 1.06 “Benefit Plans” means Pension Plans,
Welfare Plans and Non-ERISA Benefit Arrangements. 
 1.07 “COBRA” means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at section 4980B of the Code. 
 1.08
“Code” means the U.S. Internal Revenue Code of 1986, as amended. 
 1.09 “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1001, et seq. 
 1.10 “Former
Alberto-Culver Employee” means an individual whose employment with the Alberto-Culver Group was terminated prior to the Distributions Time and who, subsequent to such termination, was not employed by the Sally Group. 
 1.11 “Former Sally Employee” means an individual whose employment with the Sally Group was terminated prior to the Distributions
Time and who, subsequent to such termination, was not employed by the Alberto-Culver Group. 
 1.12 “Intrinsic Value”
means, in the case of a New Sally Option prior to the Distributions Time, the excess, if any, of the New Sally Pre-Distribution Stock Price over the exercise price per share of New Sally Common Stock subject to such New Sally Option, multiplied by
the number of shares of New Sally Common Stock subject to such New Sally Option. 
 1.13 “IRS” means the U.S.
Internal Revenue Service. 
  

 2 

 1.14 “New Alberto-Culver Option” means an option to acquire shares of New
Alberto-Culver Common Stock. 
 1.15 “New Alberto-Culver Post-Distribution Stock Price” means the average of the high
and low trading prices per share of New Alberto-Culver Common Stock on the first full Business Day on which New Alberto-Culver Common Stock begins to trade on a “when issued” basis, or such other per share value as the Board of Directors
of Alberto-Culver shall determine to be appropriate. 
 1.16 “New Sally Option” means an option to acquire shares of
New Sally Common Stock. 
 1.17 “New Sally Post-Distribution Stock Price” means the average closing price per share
of New Sally Common Stock over the first five full Business Days on which Alberto-Culver Common Stock begins to trade “ex-distribution.” 
 1.18 “New Sally Pre-Distribution Stock Price” means the Alberto-Culver Pre-Distribution Stock Price. 
 1.19 “Non-ERISA Benefit Arrangement” means each contract, agreement, policy, practice, program, plan, trust or arrangement, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or
compensation of any nature to any Alberto-Culver Employee, Former Alberto-Culver Employee, Sally Employee or Former Sally Employee, or to any family member, dependent or beneficiary of any such Alberto-Culver Employee, Former Alberto-Culver
Employee, Sally Employee or Former Sally Employee, including, without limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, supplemental unemployment, vacation, sick,
personal or bereavement days, holidays, retirement, deferred compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation. 
 1.20 “Pension Plan” means any pension plan as defined in section 3(2) of ERISA, without regard to sections 4(b)(4) or 4(b)(5) of ERISA. 
 1.21 “Restricted Stock” means shares of Alberto-Culver Common Stock that are subject to transfer restrictions, other than by
reason of applicable securities laws, and a substantial risk of forfeiture, including shares granted pursuant to (a) the Alberto-Culver 2003 Restricted Stock Plan, (b) the Alberto-Culver 1994 Restricted Stock Plan and (c) the
Alberto-Culver Management Bonus Plan. 
 1.22 “Sally Employee” means any individual who, at the Distributions Time,
is either actively employed by, or on an approved leave of absence from, a member of the Sally Group; provided that (i) solely for purposes of this Agreement (and not the Investment Agreement) and except as otherwise expressly provided herein,
the person set forth on Schedule A shall be considered a “Sally Employee” and not an Alberto-Culver Employee or former Alberto-Culver Employee and (ii) for the avoidance of doubt, the persons set forth on Schedule B
shall be considered “Sally Employees” and not Alberto-Culver Employees or Former Alberto-Culver Employees. 
  

 3 

 1.23 “U.S.” means the United States of America. 
 1.24 “Welfare Plan” means any employee welfare plan as defined in section 3(1) of ERISA, without regard to sections 4(b)(4) or
4(b)(5) of ERISA. 
 ARTICLE II 
 EMPLOYEE MATTERS 
 2.01 Employment. Each Alberto-Culver Employee shall remain an employee of a member of the
Alberto-Culver Group and each Sally Employee shall remain an employee of the Sally Group immediately following the Distributions Time. 
 2.02 Severance Obligations. 
 (a) It is not intended that any Alberto-Culver Employee, Former Alberto-Culver Employee,
Sally Employee or Former Sally Employee will be entitled to termination or severance benefits solely as a result of the Distributions or any other transaction contemplated by this Agreement, the Separation Agreement or the Investment Agreement
(other than payments or benefits with respect to employees who separate from service in connection with such transactions and are entitled to a termination or severance benefit on account of such separation). Alberto-Culver shall indemnify and hold
harmless the Sally Parties in the event that any Sally Employee or Former Sally Employee obtains a final, nonappealable judgment from a Governmental Entity declaring that such Sally Employee or Former Sally Employee is entitled to severance benefits
under an Alberto-Culver severance plan or agreement solely as a result of the Distributions or any other transaction contemplated by this Agreement, the Separation Agreement or the Investment Agreement; provided, however, that, for the avoidance of
doubt, Alberto-Culver shall be under no such obligation with respect to any Sally Employee whose employment with the Sally Group terminates after the Distributions Time. For purposes of this Section 2.02(a), Alberto-Culver shall
determine in its sole discretion whether any judgment or determination by a Governmental Entity shall be appealed, shall notify Sally in writing of such determination, and shall pay or reimburse each member of the Sally Group for its reasonable
expenses incurred in connection with any such appeal. If Alberto-Culver notifies Sally in writing that a judgment or determination by a Governmental Entity shall not be appealed, such determination shall be deemed a final, nonappealable judgment
from a Governmental Entity as set forth in this Section 2.02(a). 
 (b) Except as otherwise provided in Section 4.02(a)(i),
from and after the Distributions Time, the Sally Parties shall assume and be fully responsible for, and none of the Alberto-Culver Parties nor any of their respective Affiliates shall have any liability or responsibility for, any termination or
severance payment or benefit obligations with respect to Sally Employees or Former Sally Employees payable after the Distributions Time, including any severance payments owed, but not yet paid, to any Former Sally Employee. Except as expressly
provided in Section 2.02(a), the Sally Parties shall assume and be fully responsible for, and none of the Alberto-Culver Parties nor any of their respective Affiliates shall have any liability or responsibility for, obligations with respect to
Sally Employees under the Alberto-Culver Salaried Employees Special Severance Plan. 
  

 4 

 (c) Alberto-Culver shall retain and be fully responsible for, and none of the Sally Parties nor any of
their respective Affiliates shall have any liability or responsibility for, any termination or severance payments or benefit obligations with respect to Alberto-Culver Employees or Former Alberto-Culver Employees payable after the Distributions
Time, including any severance payments owed, but not yet paid, to any Former Alberto-Culver Employee. 
 2.03 Personnel
Records. 
 (a) Subject to Applicable Laws, all information and records regarding employment and personnel matters of Sally Employees
and Former Sally Employees shall be retained after the Distributions Time by Sally in accordance in all material respects with Applicable Laws relating to the collection, storage, retention and disclosure of such records. Access to such records
after the Distributions Time will be provided to Alberto-Culver in accordance with Article VI of the Separation Agreement. Notwithstanding the foregoing, Alberto-Culver shall retain reasonable access, in accordance with Applicable Laws, to
those records necessary to Alberto-Culver’s continued administration of any plans or programs on behalf of Sally Employees and Former Sally Employees after the Distributions Time or as otherwise required by Applicable Laws for so long as said
administration continues pursuant to this Agreement or such longer period as required by Applicable Laws. Alberto-Culver shall also retain copies of any confidentiality and non-compete agreements with any Sally Employee or Former Sally Employee in
which Alberto-Culver has an interest. 
 (b) Subject to Applicable Laws, all information and records regarding employment and personnel
matters of Alberto-Culver Employees and Former Alberto-Culver Employees shall be retained after the Distributions Time by Alberto-Culver in accordance in all material respects with Applicable Laws relating to the collection, storage, retention and
disclosure of such records. Access to such records after the Distributions Time will be provided to Sally in accordance with Article VI of the Separation Agreement. Notwithstanding the foregoing, Sally shall retain reasonable access, in
accordance with Applicable Laws, to those records necessary to Sally’s continued administration of any plans or programs on behalf of Alberto-Culver Employees and Former Alberto-Culver Employees after the Distributions Time or as otherwise
required by Applicable Laws for so long as said administration continues pursuant to this Agreement or such longer period as required by Applicable Laws. Sally shall also retain copies of any confidentiality and non-compete agreements with any
Alberto-Culver Employee or Former Alberto-Culver Employee in which Sally has an interest. 
 ARTICLE III 
 WELFARE PLANS 
 3.01 Cessation of
Participation in Alberto-Culver Welfare Plans. Except as specifically provided in this Agreement, each member of the Sally Group shall cease to be a participating employer in all Welfare Plans sponsored by a member of the Alberto-Culver
Group (the “Alberto-Culver Welfare Plans”), and participation in the Alberto-Culver Welfare Plans will cease for all Sally Employees and Former Sally Employees, if any, no later than at the Distributions Time. 
  

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 3.02 Sally’s Welfare Plans. To the extent applicable to any Welfare Plans in which
Sally Employees or Former Sally Employees participate after the Distributions Time that provide benefits similar to the benefits that had been provided to such employees under an Alberto-Culver Welfare Plan immediately prior to the Distributions
Time (the “Sally Welfare Plans”), Sally shall cause the Sally Welfare Plans to recognize all coverage and contribution elections made by Sally Employees and Former Sally Employees under the Alberto-Culver Welfare Plans in effect for
the period immediately prior to the Distributions Time and shall apply such elections under the Sally Welfare Plans for the remainder of the period or periods for which such elections are by their terms applicable, in each case to the extent
practicable. All beneficiary designations made by Sally Employees and Former Sally Employees under the Alberto-Culver Welfare Plans shall, to the extent applicable, be transferred to, and be in full force and effect under, the Sally Welfare Plans
until such beneficiary designations are replaced or revoked by the Sally Employee or Former Sally Employee who made the beneficiary designation. 
 3.03 Welfare Plan Liabilities. 
 (a) Sally Liabilities. Sally shall retain, and the Sally Parties shall be
jointly and severally responsible for, all Liabilities incurred with respect to any Sally Employee or Former Sally Employee after the Distributions Time under the Sally Welfare Plans, and none of the Alberto-Culver Parties or the Alberto-Culver
Welfare Plans shall assume or retain any such Liabilities. 
 (b) Alberto-Culver Liabilities. Alberto-Culver shall continue to be
solely responsible, after the Distributions Time, for all claims for welfare benefits (and for any Liabilities arising as a result of such claims), other than severance plan benefits, incurred by any Sally Employee or Former Sally Employee, if any,
under the Alberto-Culver Welfare Plans at or prior to the Distributions Time, whether such claims have been paid or remain unpaid as of such date, and neither Sally nor the Sally Welfare Plans shall assume or retain any such Liabilities. Claims for
health benefits shall be considered to be incurred prior to the Distributions Time if the services related to such claims were provided prior to the Distributions Time. Claims for all other welfare benefits shall be considered to be incurred prior
to the Distributions Time if the date of loss occurred prior to the Distributions Time. 
 (c) COBRA and HIPAA Liabilities. From and
after the Distributions Time, the Sally Parties shall assume, and be jointly and severally responsible for, the continuation coverage requirements under COBRA and the portability requirements under the Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”) with respect to all Sally Employees and Former Sally Employees and their qualified beneficiaries. 
 3.04 Flexible Spending Accounts. From and after the Distributions Time, Sally shall retain, and the Sally Parties shall be jointly and severally responsible for, all Liabilities incurred by any Sally Employee or Former Sally
Employee under the flexible spending account plan sponsored by Sally, and no Alberto-Culver Party shall assume or retain any such Liabilities. 
 3.05 Short-Term Disability Benefits. From and after the Distributions Time, Sally shall retain, and the Sally Parties shall be jointly and severally responsible for, all short-term disability benefits payable to Sally
Employees at or after the Distributions Time, and no Alberto-Culver Party shall assume or retain any such Liabilities. 
  

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 3.06 Long-Term Disability Benefits. From and after the Distributions Time,
Alberto-Culver shall retain, and be solely responsible for, all long-term disability benefits payable, at or after the Distributions Time, to (a) Sally Employees receiving long-term disability benefits prior to the Distributions Time, and
(b) Former Sally Employees, and Sally shall not assume or retain any such Liabilities. 
 ARTICLE IV 
 COMPENSATION MATTERS 
 AND NON-ERISA
BENEFIT ARRANGEMENTS 
 4.01 Cessation of Participation in Alberto-Culver Non-ERISA Benefit Arrangements. Except as
specifically provided in this Agreement, each member of the Sally Group shall cease to be a participating employer in all Alberto-Culver Non-ERISA Benefit Arrangements, and participation in the Alberto-Culver Non-ERISA Benefit Arrangements will
cease for all Sally Employees and Former Sally Employees at the Distributions Time. 
 4.02 Assumption of Employee Related
Obligations. 
 (a) From and after the Distributions Time, the Sally Parties shall assume or retain (as applicable), and be solely
responsible for, all Liabilities related to the agreements and obligations described in Section 4.02(a)(i) through Section 4.02(a)(vi) and none of any Alberto-Culver Party, any of their respective Affiliates or the
Alberto-Culver Non-ERISA Benefit Arrangements shall retain or have any further liability with respect to such Liabilities. 
 (i) Agreements entered into between the Alberto-Culver Group and Sally Employees and Former Sally Employees, except as otherwise provided in this Agreement; provided, however, that Alberto-Culver shall retain all Liabilities related to
(A) the Key Executive Deferred Compensation Agreement between Alberto-Culver and the Sally Employee set forth on Schedule A and (B) all Liability under the Termination Agreement, dated as of June 18, 2006, among Alberto-Culver, Sally
Holdings, Inc. and the Sally Employee set forth on Schedule A with respect to the “Additional Payment” set forth on Schedule 1 to such Termination Agreement. No other Sally Employee or Former Sally Employee is a party to a Key Executive
Deferred Compensation Agreement with Alberto-Culver. 
 (ii) Agreements entered into between a member of the Alberto-Culver
Group and independent contractors providing services to the extent they are related to the Sally Business. 
 (iii) All
confidentiality and non-compete agreements between a member of the Alberto-Culver Group and Sally Employees, Former Sally Employees and independent contractors; provided, however, that Alberto-Culver, New Alberto-Culver, Sally and New Sally shall
all enjoy the rights and benefits under such agreements, with respect to such party’s and their respective Affiliates’ business operations. 
  

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 (iv) All wages, salary, ordinary compensation and commissions payable to Sally Employees
or Former Sally Employees after the Distributions Time, whether earned before or after the Distributions Time. 
 (v) All
bonus and incentive compensation payment obligations, if any, payable after the Distributions Time to Sally Employees and Former Sally Employees; provided, however, that Sally’s payment obligations with respect to the Alberto-Culver 1994
Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan are set forth exclusively in Section 4.03(a), and not pursuant to this Section 4.02(a)(v). 
 (vi) All Liabilities and obligations whatsoever of the Sally Business with respect to claims made by or with respect to Sally Employees or
Former Sally Employees relating to Non-ERISA Benefit Arrangements with respect to the Sally Business and not specifically assumed or retained by Alberto-Culver pursuant to this Agreement. The term “Liabilities” under this
Section 4.02(a)(vi) expressly excludes any payment of any kind, including insurance coverage, indemnification rights and common law rights, for the acts or omissions of or by any Sally or New Sally officer, director, employee or agent,
which are covered by the Separation Agreement. 
 The parties agree to negotiate in good faith with applicable third parties to have the foregoing
obligations assumed by the Sally Parties on terms no less favorable to the Sally Parties than those that apply to Alberto-Culver. Subject to the foregoing, if any of the foregoing obligations cannot be assumed by the Sally Parties for a reason
beyond the control of the parties hereto, including the refusal of any such third party to agree to such an assumption, then the Sally Parties shall reimburse the Alberto-Culver Group for any such obligation paid by the Alberto-Culver Group, in
accordance with Section 7.03, as though it had been assumed and paid by Sally. 
 (b) From and after the Distributions Time, the
Alberto-Culver Parties shall assume or retain (as applicable), and be solely responsible for, all Liabilities related to the agreements and obligations described in Section 4.02(b)(i) through Section 4.02(b)(vi) and none of
any Sally Party, any of their respective Affiliates or the Sally Non-ERISA Benefit Arrangements shall retain or have any further liability with respect to such Liabilities. 
 (i) Agreements entered into between the Sally Group and Alberto-Culver Employees and Former Alberto-Culver Employees, except as otherwise
provided in this Agreement. 
 (ii) Agreements entered into between a member of the Sally Group and independent contractors
providing services to the extent they are related to the Alberto-Culver Business. 
 (iii) All confidentiality and non-compete
agreements between a member of the Sally Group and Alberto-Culver Employees, Former Alberto-Culver Employees and independent contractors; provided, however, that Alberto-Culver, New Alberto-Culver, Sally and New Sally shall all enjoy the rights and
benefits under such agreements, with respect to such party’s and their respective Affiliates’ business operations. 
  

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 (iv) All wages, salary, ordinary compensation and commissions payable to Alberto-Culver
Employees or Former Alberto-Culver Employees after the Distributions Time, whether earned before or after the Distributions Time. 
 (v) All bonus and incentive compensation payment obligations, if any, payable after the Distributions Time to Alberto-Culver Employees. 
 (vi) All Liabilities and obligations whatsoever of the Alberto-Culver Business with respect to claims made by or with respect to Alberto-Culver Employees or Former Alberto-Culver Employees relating to Non-ERISA
Benefit Arrangements with respect to the Alberto-Culver Business and not specifically assumed or retained by Sally pursuant to this Agreement. The term “Liabilities” under this Section 4.02(b)(vi) expressly excludes any payment
of any kind, including insurance coverage, indemnification rights and common law rights, for the acts or omissions of or by any Alberto-Culver or New Alberto-Culver officer, director, employee or agent, which are covered by the Separation Agreement.

 The parties agree to negotiate in good faith with applicable third parties to have the foregoing obligations assumed by the Alberto-Culver Parties on
terms no less favorable to the Alberto-Culver Parties than those that apply to Sally. Subject to the foregoing, if any of the foregoing obligations cannot be assumed by the Alberto-Culver Parties for a reason beyond the control of the parties
hereto, including the refusal of any such third party to agree to such an assumption, then the Alberto-Culver Parties shall reimburse the Sally Group for any such obligation paid by the Sally Group, in accordance with Section 7.03, as
though it had been assumed and paid by Alberto-Culver. 
 4.03 Certain Incentive Plans; Nonqualified Deferred Compensation.

 (a) From and after the Distributions Time, the Sally Parties shall assume and thereafter be solely responsible for all bonus and incentive
compensation payment obligations earned by Sally Employees as of the Distributions Time under the Alberto-Culver 1994 Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan. Each such plan shall be treated as though a
Change in Control, as defined in such plan, occurred as of the Distributions Time with respect to all employees and former employees. Not later than 28 days after the Distributions Time, Alberto-Culver shall (i) determine all bonus and
incentive payment obligations earned by Sally Employees and Former Sally Employees under the 1994 Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan as of the Distributions Time, if any, and (ii) transfer to Sally
a cash payment equal to 62% of such amounts, which represents the after-tax cost to Sally of paying such amounts. 
 (b) From and after the
Distributions Time, the Sally Parties shall assume and thereafter be solely responsible for all deferred compensation payment obligations credited to the accounts of all Sally Employees and Former Sally Employees as of the Distributions Time under
the Alberto-Culver Executive Deferred Compensation Plan. Such plan shall be treated as though 
  

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 a Change in Control, as defined in such plan, occurred as of the Distributions Time with respect to all Sally Employees
and Former Sally Employees, and, subject to the transfer set forth in the next sentence, as soon as reasonably practicable after the Distributions Time, or at such other time as shall be required to comply with section 409A of the Code, Sally shall
pay to each such Sally Employee and Former Sally Employee the amount credited to his or her account under such plan as of the Distributions Time. As soon as reasonably practicable after the Distributions Time, Alberto-Culver shall (i) determine
all deferred compensation payment obligations credited to the accounts of all Sally Employees and Former Sally Employees under the Alberto-Culver Executive Deferred Compensation Plan as though a Change in Control occurred as of the Distributions
Time, and (ii) transfer to Sally a cash payment equal to 62% of such amounts, which represents the after-tax cost to Sally of paying such amounts. 
 4.04 Equity Compensation Plans. 
 (a) Alberto-Culver Options. Each Alberto-Culver Option
held by an Alberto-Culver Employee, Former Alberto-Culver Employee, member or former member of the Alberto-Culver Board of Directors (a “Director”), Sally Employee or Former Sally Employee that is outstanding immediately before the
Distributions Time shall be converted into a New Sally Option. Each New Sally Option shall have the same terms and conditions as the corresponding Alberto-Culver Option to which it relates and shall continue to be subject to the same terms and
conditions as the applicable Alberto-Culver Option Plan; provided, however, that for purposes of the New Sally Options, unless the context otherwise requires, all references to “Alberto-Culver” therein shall be deemed to be
to “New Sally” and all references to Alberto-Culver Common Stock shall be deemed to be to New Sally Common Stock. For the avoidance of doubt, at no time will an Alberto-Culver Option be deemed to pertain to “New Alberto-Culver
LLC” (as defined in the Investment Agreement). Alberto-Culver and New Sally shall each take such actions as may be necessary to effectuate the provisions of this Section. 
 (b) Options Held by Alberto-Culver Employees and Directors. The New Sally Options held by each Alberto-Culver Employee, each Former Alberto-Culver
Employee, each Director (other than non-employee Directors who will serve as independent directors of New Sally after the Distributions) and the Sally Employee listed on Schedule A, which in each case are outstanding as of the Distributions
Time, shall become fully exercisable and be converted into a New Alberto-Culver Option, effective immediately after the Distributions Time. 
 (i) The number of shares of New Alberto-Culver Common Stock subject to a New Alberto-Culver Option and the exercise price per share of New Alberto-Culver Common Stock subject to a New Alberto-Culver Option shall be
determined in accordance with clauses (A) and (B) below (to be interpreted and applied in such a way as to minimize any adverse consequences of any possible application of FAS 123R and Section 409A of the Code to such conversions):

 (A) The Intrinsic Value of each New Sally Option shall be maintained under each corresponding New Alberto-Culver Option by
setting the option exercise price of the New Alberto-Culver Option and/or the number of shares subject to such New Alberto-Culver Option to ensure that the aggregate difference between the New Alberto-Culver Post-Distribution Stock Price and the
exercise price of the New Alberto-Culver Option equals such Intrinsic Value. 
  

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 (B) The ratio of the per share option exercise price of the New Alberto-Culver Option to
the New Alberto-Culver Post-Distribution Stock Price shall be fixed in such a way that does not increase the ratio of the per share exercise price of the related New Sally Option to the New Sally Pre-Distribution Stock Price. 
 (ii) Each New Alberto-Culver Option shall have the same terms and conditions as the corresponding New Sally Option to which it relates
(except as adjusted as provided herein) and shall continue to be subject to the same terms and conditions as the applicable New Sally Option Plan; provided, however, that for purposes of the New Alberto-Culver Options, unless the
context otherwise requires, all references to “New Sally” therein shall, after the Distributions Time, be deemed to be to “New Alberto-Culver” and all references to New Sally Common Stock shall be deemed to be to New
Alberto-Culver Common Stock. New Sally and New Alberto-Culver shall each take such actions as may be necessary to effectuate the provisions of this Section. 
 (c) Options Held by Sally Employees and Future Sally Directors. The New Sally Options held by each Sally Employee, other than the Sally Employee listed on Schedule A, each Former Sally Employee and each
non-employee Director who will serve as an independent director of New Sally after the Distributions, which in each case are outstanding as of the Distributions Time, shall become fully exercisable and be adjusted, effective immediately after the
Distributions Time (each, an “Adjusted New Sally Option”). 
 (i) The number of shares of New Sally Common
Stock subject to an Adjusted New Sally Option and the exercise price per share of New Sally Common Stock subject to an Adjusted New Sally Option shall be determined in accordance with clauses (A) and (B) below (to be interpreted and
applied in such a way as to minimize any adverse consequences of any possible application of FAS 123R and Section 409A of the Code to such adjustments): 
 (A) The Intrinsic Value of each New Sally Option shall be maintained under each corresponding Adjusted New Sally Option by setting the
option exercise price of the Adjusted New Sally Option and/or the number of shares subject to such Adjusted New Sally Option to ensure that the aggregate difference between the New Sally Post-Distribution Stock Price and the exercise price of the
Adjusted New Sally Option equals such Intrinsic Value. 
 (B) The ratio of the per share option exercise price of the Adjusted
New Sally Option to the New Sally Post-Distribution Stock Price shall be fixed in such a way that does not increase the ratio of the per share exercise price of the related New Sally Option to the New Sally Pre-Distribution Stock Price. 

(ii) Each Adjusted New Sally Option shall have the same terms and conditions as the corresponding New Sally Option to which it relates
(except as adjusted as provided herein). 
  

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 (d) Restricted Stock. The Alberto-Culver Board of Directors shall take all actions reasonably
necessary to ensure that not later than the first business day after the record date of the Distributions all Alberto-Culver Employees and Sally Employees shall be fully vested in any shares of Restricted Stock that they hold. All shares of
Restricted Stock shall be treated the same as all other outstanding shares of Alberto-Culver Common Stock in the Merger and the Distributions, in accordance with the provisions of the Merger Agreement and the Separation Agreement. 

 4.05 Vacation and Leaves of Absence Programs. From and after the Distributions Time, Sally shall recognize and assume all
Liabilities for vacation, holiday, flex days and personal days off to the extent accrued by Sally Employees before the Distributions Time in accordance with the written policies in effect with regard to such Liabilities during the period over which
they were accrued. Sally shall also honor the written terms of any approved leaves of absence with an expected duration of not more than 12 months (other than for military or other leave protected by Applicable Law, which shall not be subject to
such limitation) after the Distributions Time to the extent such leaves are in effect with regard to Sally Employees at the Distributions Time. 
 ARTICLE V 
 QUALIFIED RETIREMENT PLANS 
 5.01 Defined Contribution Plans. 
 (a) Sally 401(k) Plan. From and after the
Distributions Time, Sally shall retain, and the Sally Parties shall be jointly and severally responsible for, all existing and future employer Liabilities related to the Sally Beauty Company, Inc. 401(k) Savings Plan (the “Sally 401(k)
Plan”) and the administration thereof, and the Alberto-Culver Parties shall not assume or retain any such Liabilities. 
 (b)
Profit Sharing Plan. 
 (i) Establishment of Sally Profit Sharing Plan. As soon as administratively practicable
after the Distributions Time, Sally Employees shall be eligible to participate in a defined contribution plan and trust adopted, established and maintained by Sally and qualified under section 401(a) and section 501(a) of the Code (which plan may be
the Sally 401(k) Plan) (the “Sally Profit Sharing Plan”). Subject to the asset transfers described in Section 5.01(b)(ii), the Sally Parties shall assume and thereafter be jointly and severally responsible for all then
existing or future employer Liabilities on behalf of Sally Employees and Former Sally Employees related to the Sally Profit Sharing Plan and the administration thereof and the Alberto-Culver Parties shall not assume or retain any such Liabilities.
As soon as practicable after the adoption or designation of the Sally Profit Sharing Plan, Sally shall, to the extent applicable, submit an application to the IRS for a determination regarding the qualification of the Sally Profit Sharing Plan and
shall take any actions not inconsistent with the other general commitments of the Sally Parties contained in this Agreement and make any amendments necessary to receive a favorable determination letter. 
  

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 (ii) Transfer of Account Balances. As soon as administratively practicable, and in
no event later than 180 days, after the Distributions Time, the Alberto-Culver Parties and the Sally Parties shall cooperate to cause the Alberto-Culver Company Employees Profit Sharing Plan (the “Alberto-Culver Profit Sharing
Plan”) to transfer to the Sally Profit Sharing Plan assets having a value as of the applicable valuation date that are equal to the value of the account balances of, and Liabilities with respect to, all Sally Employees and Former Sally
Employees with an account balance, whether or not vested, under the Alberto-Culver Profit Sharing Plan as of such valuation date. Such transferred assets shall consist of cash, New Alberto-Culver Common Stock, New Sally Common Stock and promissory
notes for outstanding participant loans, and shall be in accordance with section 414(l) of the Code. Liabilities under any qualified domestic relations orders (as defined in section 414(p) of the Code) received with respect to any assets transferred
to the Sally Profit Sharing Plan shall be transferred to the Sally Parties at the time such assets are transferred. 
 (iii)
Past Service Credit and Vesting. With respect to all Sally Employees and without duplication of benefits, the Sally Profit Sharing Plan shall (i) recognize, to the extent applicable, all service, compensation and other determinations
that, at the Distributions Time, were recognized under the Alberto-Culver Profit Sharing Plan for purposes of determining eligibility, participation, vesting, and calculation of benefits for Sally Employees, and (ii) maintain the vesting
schedule applicable under the Alberto-Culver Profit Sharing Plan for accounts transferred from the Alberto-Culver Profit Sharing Plan. 
 (iv) Elections and Designations. To the extent applicable, all participant elections and beneficiary designations made by Sally Employees or Former Sally Employees under the Alberto-Culver Profit Sharing Plan
shall be transferred to, and be in full force and effect under, the Sally Profit Sharing Plan until such participant elections and beneficiary designations are replaced or revoked by the Sally Employee or Former Sally Employee who made the election
or designation. 
 (v) Cessation of Participation in the Alberto-Culver Profit Sharing Plan. Each member of the Sally
Group shall cease to be a participating employer in the Alberto-Culver Profit Sharing Plan, and participation in the Alberto-Culver Profit Sharing Plan will cease for all Sally Employees and Former Sally Employees, in each case no later than at the
Distributions Time. 
 (c) Stock Funds. 
 (i) Sally shall, subject to the fiduciary and other requirements of ERISA, and any other Applicable Laws, take such actions as are reasonably necessary to ensure that any liquidation of the shares of New
Alberto-Culver Common Stock held in the Sally 401(k) Plan and the Sally Profit Sharing Plan is orderly and periodic. During the 24-month period beginning at the Distributions Time (or such shorter period as Sally reasonably determines may be
required under Applicable Laws), subject to the exercise of its fiduciary duties or other requirements of ERISA and any other Applicable Laws, Sally may prohibit purchases of New Alberto-Culver Common Stock under the Sally 401(k) Plan and the Sally
Profit Sharing Plan but shall not require that such funds of New Alberto-Culver Common Stock be liquidated 
  

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 (ii) Alberto-Culver shall, subject to the fiduciary and other requirements of ERISA, and
any other Applicable Laws, take such actions as are reasonably necessary to ensure that any liquidation of the shares of New Sally Common Stock held in the Alberto-Culver 401(k) Savings Plan (the “Alberto-Culver 401(k) Plan”) and
the Alberto-Culver Profit Sharing Plan is orderly and periodic. During the 24-month period beginning at the Distributions Time (or such shorter period as Alberto-Culver reasonably determines may be required under Applicable Laws) subject to the
exercise of its fiduciary duties or other requirements of ERISA and any other Applicable Laws, Alberto-Culver may prohibit purchases of New Sally Common Stock under the Alberto-Culver 401(k) Plan and the Alberto-Culver Profit Sharing Plan but shall
not require that such funds of New Sally Common Stock be liquidated. 
 5.02 Further Cooperation. The Alberto-Culver Parties
and the Sally Parties will cooperate in good faith in the filing of documents required by the transfer of assets and liabilities described in this Agreement to generally effect the purposes of this Agreement and to resolve any discrepancies or
obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to any Sally Employees or Former Sally Employees. 
 ARTICLE VI 
 FOREIGN PLANS 
 At the Distributions Time, or such later date as may be required by Applicable Laws, each Benefit Plan maintained by a member of the Sally Group that
covers only Sally Employees employed outside the U.S. (the “Sally Foreign Plans”) shall be the sole responsibility of the Sally Group and no member of the Alberto-Culver Group shall have any Liability with respect to such Sally
Foreign Plan. At the Distributions Time, or such later date as may be required by Applicable Laws, each Benefit Plan maintained by a member of the Alberto-Culver Group that covers only Alberto-Culver Employees employed outside the U.S. (the
“Alberto-Culver Foreign Plans”) shall be the sole responsibility of the Alberto-Culver Group and no member of the Sally Group shall have any Liability with respect to such Alberto-Culver Foreign Plan. For purposes of this Article
VI, “employed outside the U.S.” means compensated under a payroll which is administered outside the 50 United States and the District of Columbia. 
 ARTICLE VII 
 GENERAL PROVISIONS 
 7.01 Preservation of Rights to Amend. The rights of any of the Sally Parties and the Alberto-Culver Parties to amend or terminate any plan
referred to herein shall not be limited in any way by this Agreement. 
  

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 7.02 Administrative Complaints/Litigation. 
 (a) At and after the Distributions Time, the Sally Parties shall assume, and be jointly and severally liable for, the handling, administration,
investigation, and defense of actions, including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at
any time against the Alberto-Culver Group or the Sally Group by any Sally Employee, Former Sally Employee or any other person arising out of or relating to employment with the Sally Business or Sally. Any Liabilities arising from such actions shall
be deemed Sally Liabilities under the Separation Agreement. The Alberto-Culver Parties reserve the right to participate, at their own expense, in the investigation, defense or settlement of any matter to the extent it deems reasonably necessary.

 (b) At and after the Distributions Time, the Alberto-Culver Parties shall assume, and be jointly and severally liable for, the handling,
administration, investigation, and defense of actions, including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation
claims, asserted at any time against the Sally Group or the Alberto-Culver Group by any Alberto-Culver Employee, Former Alberto-Culver Employee or any other person arising out of or relating to employment with the Alberto-Culver Business or
Alberto-Culver. Any Liabilities arising from such actions shall be deemed Alberto-Culver Liabilities under the Separation Agreement. The Sally Parties reserve the right to participate, at their own expense, in the investigation, defense or
settlement of any matter to the extent it deems reasonably necessary. 
 7.03 Reimbursement and Indemnification. The parties
hereto agree to reimburse one another, within 30 days of receipt from another party of appropriate verification, for all Indemnifiable Losses that each may incur on behalf of the other as a result of any of the Benefit Plans or any of the
termination or severance obligations set forth in Section 2.02. All Liabilities retained, assumed or indemnified against by the Sally Parties pursuant to this Agreement shall be deemed Sally Liabilities, and all Liabilities retained,
assumed or indemnified against by the Alberto-Culver Parties pursuant to this Agreement shall be deemed Alberto-Culver Liabilities, and in each case shall be subject to the indemnification provisions of Article IV of the Separation Agreement.

 7.04 Payment of and Accounting Treatment for Expenses. Except as specifically provided in the Separation Agreement or as the
Sally Parties and the Alberto-Culver Parties otherwise mutually agree, all expenses (and the accounting treatment related thereto) through the Distributions Time regarding matters addressed herein shall be handled and administered by the
Alberto-Culver Parties and the Sally Parties in accordance with past practice of Alberto-Culver and Sally, as applicable, accounting and financial practices and procedures pertaining to such matters. 
 7.05 Sharing of Participant Information. Alberto-Culver and Sally shall share, Alberto-Culver shall cause each applicable member of the
Alberto-Culver Group to share, and Sally shall cause each applicable member of the Sally Group to share, with each other and their respective agents and vendors all participant information necessary for the efficient and accurate administration of
each of the Alberto-Culver Benefit Plans and the Sally Benefit Plans following the Distributions Time. Alberto-Culver and Sally and their respective authorized agents shall, 
  

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 subject to Applicable Laws and understandings regarding confidentiality, be given reasonable and timely access to, and
may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration. Sally and Alberto-Culver shall also cooperate to share all such information regarding
any issue relating to the compensation of Sally Employees as may be required in order to satisfy any requirements related to federal, state and/or local income tax reporting (including, for purposes of preparing a Form W-2 for each such employee)
and withholding, all in accordance with the terms of the Tax Allocation Agreement. 
 7.06 Audit Rights. Subject to the
requirements of Article VI of the Separation Agreement, for a period of 36 months from and after the Distributions Time, each Alberto-Culver Party and each Sally Party, and their duly authorized representatives, shall have the right to
conduct audits at mutually agreed times upon reasonable prior notice, at their own expense, with respect to all information provided to it or to any record keeper or third party administrator by another party that is relevant to this Agreement. The
auditing party shall have the right to make copies of any records at its expense, subject to the confidentiality provisions set forth in the Separation Agreement, which are incorporated by reference herein. The party being audited shall provide the
auditing party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide work space to its representatives. After any audit is completed, the party
being audited shall have the right to review a draft of the audit findings and to comment on those findings in writing within fifteen Business Days after receiving such draft. 
 The auditing party’s audit rights under this Section 7.06 shall include the right to audit, or participate in an audit facilitated by the party being audited, of any Subsidiaries and Affiliates of the
party being audited and of any benefit providers and third parties with whom the party being audited has a relationship, or agents of such party, to the extent any such persons are affected by or addressed in this Agreement (collectively, the
“Non-parties”). The party being audited shall, upon written request from the auditing party, provide an individual (at the auditing party’s expense) to supervise any audit of any such benefit provider or third party. The
auditing party shall be responsible for supplying, at its expense, additional personnel sufficient to complete the audit in a reasonably timely manner. 
 7.07 Effect If Distributions Do Not Occur. If the Distributions do not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of the Distributions Time, or
otherwise in connection with the Distributions, shall not be taken or occur except to the extent otherwise specifically agreed in writing by Sally and Alberto-Culver. 
 7.08 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.  
 7.09 No Right to Continued Employment. Nothing contained in this Agreement
shall confer on any Sally Employee any right to continued employment with Sally or any member of the Sally Group, except as expressly provided in any individual employment 
  

 16 

 agreements to which Sally or a member of the Sally Group is a party, under which any Sally Employee has any such rights.
Nothing contained in this Agreement shall confer on any Alberto-Culver Employee any right to continued employment with Alberto-Culver or any member of the Alberto-Culver Group, except as expressly provided in any individual employment agreements to
which Alberto-Culver or a member of the Alberto-Culver Group is a party, under which any Alberto-Culver Employee has any such rights. 
 7.10 Cooperation. The Alberto-Culver Parties and the Sally Parties shall each cooperate in good faith, including by making personnel available to one another at mutually agreed times, as necessary or appropriate to carry out
the purposes of this Agreement. 
 7.11 No Duplication of Benefits. It is the intention of the parties that nothing in
this Agreement shall allow for any Sally Employee or Alberto-Culver Employee to receive duplicative benefits. Accordingly, Alberto-Culver and Sally shall agree on methods and procedures to prevent Sally Employees and Alberto-Culver Employees from
receiving duplicative benefits. 
 ARTICLE VIII 
 MISCELLANEOUS 
 8.01 Entire Agreement. This Agreement, the Separation Agreement and
other Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. 
 8.02 Survival of Agreements. Except as specifically contemplated by this Agreement, all covenants and agreements of the parties contained
in this Agreement will remain in full force and effect and survive the Distributions Time. 
 8.03 Governing Law. This
Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof). 
 8.04 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of
receipt if delivered by facsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice: 
  

					
	(a)	 	If to New Alberto-Culver or Alberto-Culver to
		 	Alberto-Culver:
		
		 	Alberto-Culver Company
		 	2525 Armitage Avenue
		 	Melrose Park, Illinois 60160
			
		 	Fax:	 	(708) 450-2511
		 	Attention:	 	 Chief Executive Officer
 Senior Vice President
and
 General Counsel (with a separate notice to be sent to each such person)

  

 17 

					
		
		 	with a copy to
		
		 	Sidley Austin LLP
		 	One South Dearborn Street
		 	Chicago, Illinois 60603
		 	Fax:	 	(312) 853-7036
		 	Attention:	 	Frederick C. Lowinger, Esq.
		 		 	David J. Zampa, Esq.
		
	(b)	 	If to New Sally or Sally to Sally
		
		 	Sally Holdings, Inc.
		 	3001 Colorado Blvd.
		 	Denton, Texas 76210
		 	Fax:	 	(940) 297-4990
		 	Attention:	 	Vice President and General Counsel
		
		 	with a copy at any time prior to the Distributions Time to
		
		 	Sidley Austin LLP
		 	One South Dearborn Street
		 	Chicago, Illinois 60603
		 	Fax:	 	(312) 853-7036
		 	Attention:	 	Frederick C. Lowinger, Esq.
		 		 	David J. Zampa, Esq.
		
		 	And with a copy at any time from and after the Distributions Time to
		
		 	CDRS Acquisitions LLC
		 	c/o Clayton, Dubilier & Rice Fund VII, L.P.
		 	 1403 Foulk Road, Suite 106
 Wilmington, DE
19803

		 	Fax:	 	(302) 427-7398
		
	 	 	With a copy to
		
		 	Debevoise & Plimpton LLP
		 	919 Third Avenue
		 	New York, New York 10022
		 	Fax:	 	(212) 909-6836
		 	Attention:	 	Paul S. Bird, Esq.

  

 18 

 8.05 Consent to Jurisdiction. Each of the Sally Parties and the Alberto-Culver Parties
irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any
judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of the Sally Parties and the Alberto-Culver
Parties hereby irrevocably submits with regard to any such action or proceeding for themselves and in respect to their property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of the Sally Parties and the
Alberto-Culver Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision
hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process,
(b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. 
 8.06
Amendments. This Agreement cannot be amended except by a written agreement executed by the Sally Parties and the Alberto-Culver Parties; provided, that unless the Investment Agreement shall have been terminated, any such amendment
shall be subject to the prior written consent of Investor, such consent not to be unreasonably withheld, delayed or conditioned. 
 8.07
Assignment. No party to this Agreement will (or permit any of the members of its Group) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of
the other parties in their sole and absolute discretion; provided, that each of the Sally Parties may assign this Agreement and all of its rights hereunder to its lenders and debt providers for collateral security purposes and
provided, further, that unless the Investment Agreement shall have been terminated, any such assignment prior to the Distributions Time shall be subject to the prior written consent of Investor. Any conveyance, assignment or transfer
requiring the prior written consent of the other parties or Investor pursuant to this Section 8.07 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its
obligations hereunder. For purposes of clarity, New Alberto-Culver may perform any responsibility or exercise any right under this Agreement by causing such responsibility or right to be undertaken or exercised, without limitation, by a New
Alberto-Culver Subsidiary; provided, however, that 
  

 19 

 New Alberto-Culver shall be fully responsible to Alberto-Culver for ensuring compliance by New Alberto-Culver and the New
Alberto-Culver Group with the applicable terms of this Agreement. 
 8.08 Captions; Currency. The article, section and
paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered
articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein
or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars. 
 8.09
Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic
or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to
effect the original intent of the parties, and, if the parties are unable to agree upon a suitable and equitable substitute provision to effect the original intent of the parties, prior to the Distributions Time, the party so materially and
adversely affected may terminate this Agreement. 
 8.10 Parties in Interest. This Agreement is binding upon and is for the
benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and
permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement, except that the provisions in Sections 8.06 and 8.12 shall inure to the benefit of Investor. 
 8.11 Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein.
Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement. 
 8.12 Waivers; Remedies. Any agreement on the part of a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument
signed on behalf of such party; provided, that unless the Investment Agreement shall have been terminated, any such waiver shall be subject to the prior written consent of Investor, such consent not to be unreasonably withheld, delayed or
conditioned. No failure or delay on the part of either the Sally Parties or the Alberto-Culver Parties in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either the Sally
Parties or the Alberto-Culver Parties of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will 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. 
  

 20 

 8.13 Further Assurances. From time to time after the Distributions Time, as and when
requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such actions as the requesting party may reasonably
request to consummate the transactions contemplated by this Agreement. 
 8.14 Counterparts. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. 
 8.15 Performance. The Sally Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their
Subsidiaries. The Alberto-Culver Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries. 
 8.16 Interpretation. Any reference herein to any federal, state, local, or foreign law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”. This Agreement shall be deemed to be the joint work
product of the Sally Parties and the Alberto-Culver Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable. 
 8.17 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in
equity. 
  

 21 

 IN WITNESS WHEREOF, the parties have caused this agreement to be executed in their names by a duly
authorized officer as of the date first written above. 
  

			
	NEW SALLY HOLDINGS, INC.
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	President
	
	SALLY HOLDINGS, INC.
		
	By:	 	 /s/ Gary Winterhalter

	Name:	 	Gary Winterhalter
	Title:	 	President
	
	ALBERTO-CULVER COMPANY
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	 Senior Vice President, General Counsel
 and
Secretary

	
	NEW ARISTOTLE HOLDINGS, INC.
		
	By:	 	 /s/ Gary P. Schmidt

	Name:	 	Gary P. Schmidt
	Title:	 	President

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