Document:

2012.6.30-EX.10.5

Exhibit 10.5

[Letterhead of Avon Products, Inc.]
EXECUTION VERSION 
LETTER WAIVER
Dated as of July 31, 2012
To the banks, financial institutions
and other institutional lenders
(collectively, the “Banks”)
parties to the Credit Agreement
referred to below and to Citibank, N.A.,
as agent (the “Administrative Agent”) for the Banks

Ladies and Gentlemen:
We refer to the Revolving Credit and Competitive Advance Facility Agreement, dated as of November 2, 2010 (the “Credit Agreement”) among the undersigned and you.  Capitalized terms not otherwise defined in this Letter Waiver have the same meanings as specified in the Credit Agreement.
As previously disclosed in API's annual report on Form 10-K for the year ended December 31, 2011, in the fourth quarter of 2011, API recorded a non-cash charge of $263 million to adjust good will and indefinite lived intangible assets related to API's Silpada business (the “Silpada Non-cash Charge”).  Due to the Silpada Non-cash Charge, as of September 30, 2012, depending upon API's financial result for the third quarter of 2012, API may be unable to comply with the Interest Coverage Ratio covenant set forth in the Credit Agreement.  Since it was incurred in the fourth quarter of 2011 and the Interest Coverage Ratio under the Credit Agreement is calculated based on a period of four fiscal quarters ending on the date of determination, the Silpada Non-cash Charge will not be relevant to calculations of the Interest Coverage Ratio for fiscal quarters after the third quarter of 2012.  
For purposes of Section 7.02(d) of the Credit Agreement, we hereby request that you waive, and by executing this Letter Waiver you hereby waive, the requirement that we include in the calculation of Interest Coverage Ratio the Silpada Non-cash Charge and permit us, solely for the calculation of the Interest Coverage Ratio as of September 30, 2012, to add back to the consolidated pre-tax income of API and its Consolidated Subsidiaries the Silpada Non-cash Charge.  
This Letter Waiver shall become effective as of the date first above written when, and only when, the Administrative Agent shall have received counterparts of this Letter Waiver executed by us and the Required Banks.
The Credit Agreement and the Notes, except to the extent of the waiver specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Except as expressly provided herein, the execution, delivery and effectiveness of this Letter Waiver shall not operate as a waiver of any right, power or remedy of any Bank or the Administrative Agent under the Credit Agreement, or constitute a waiver of any provision of the Credit Agreement.
If you agree to the terms and provisions of this Letter Waiver, please evidence such agreement by executing and returning at least two counterparts of this Letter Waiver to Dovid Duchman, Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022.

This Letter Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Letter Waiver by telecopier or other electronic means shall be effective as delivery of a manually executed counterpart of this Letter Waiver.
This Letter Waiver shall be governed by, and construed in accordance with, the laws of the State of New York.
Very truly yours,
	
					
	 
	 
	AVON PRODUCTS, INC.

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Richard J. Valone
	 

	 
	 
	 
	Name: Richard J. Valone

	 
	 
	 
	Title: Vice President & Treasurer

	 
	 
	 
	 
	 

	 
	 
	AVON CAPITAL CORPORATION

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Richard J. Valone
	 

	 
	 
	 
	Name: Richard J. Valone

	 
	 
	 
	Title: Vice President & Treasurer

2

	
					
	Agreed as of the date first above written:
	 
	 
	 

	 
	 
	 
	 
	 

	CITIBANK, N.A.,
	 
	 
	 
	 

	as Administrative Agent and as a Bank
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Michael Vondriska
	 
	 
	 

	Name: Michael Vondriska
	 
	 
	 

	Title: Vice President
	 
	 
	 
	 

	 
	 
	 
	 
	 

	BANK OF AMERICA, N.A.
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ J. Casey Cosgrove
	 
	 
	 

	Name: J. Casey Cosgrove
	 
	 
	 

	Title: Director
	 
	 
	 
	 

	 
	 
	 
	 
	 

	JPMORGAN CHASE BANK, N.A.
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Tony Yung
	 
	 
	 

	Name: Tony Yung
	 
	 
	 
	 

	Title: Executive Director
	 
	 
	 

	 
	 
	 
	 
	 

	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH

	 

	 
	 
	 
	 
	 

	By:
	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	DEUTCHE BANK AG NEW YORK BRANCH
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	HSBC BANK USA, NATIONAL ASSOCIATION
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Alan Vitulich
	 
	 
	 

	Name: Alan Vitulich
	 
	 
	 
	 

	Title: Vice President
	 
	 
	 
	 

	
					
	GOLDMAN SACHS BANK USA
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Michelle Latzoni
	 
	 
	 

	Name: Michelle Latzoni
	 
	 
	 

	Title: Authorized Signatory
	 
	 
	 

	 
	 
	 
	 
	 

	MORGAN STANLEY BANK, N.A.
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Brendan MacBride
	 
	 
	 

	Name: Brendan MacBride
	 
	 
	 

	Title: Authorized Signatory
	 
	 
	 

	 
	 
	 
	 
	 

	BANCO SANTANDER, S.A., NEW YORK BRANCH
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Rita Walz-Cuccioli
	 
	 
	 

	Name: Rita Walz-Cuccioli
	 
	 
	 

	Title: Executive Director
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Terence Corcoran
	 
	 
	 

	Name: Terence Corcoran
	 
	 
	 

	Title: Senior Vice President
	 
	 
	 

	 
	 
	 
	 
	 

	BNP PARIBAS
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Simone G. Vinocour McKeever
	 
	 
	 

	Name: Simone G. Vinocour McKeever
	 
	 
	 

	Title: Managing Director
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Angela B. Arnold
	 
	 
	 

	Name: Angela B. Arnold
	 
	 
	 

	Title: Managing Director
	 
	 
	 

	 
	 
	 
	 
	 

	BANCO BILBAO VIZCAYA ARGENTARIA ARIA S.A., NEW YORK BRANCH
	 

	 
	 
	 
	 
	 

	By: /s/ Paul A. Rodriguez
	 
	 
	 

	Name: Paul A. Rodriguez
	 
	 
	 

	Title: Vice President
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Nietzche Rodricks
	 
	 
	 

	Name: Nietzche Rodricks
	 
	 
	 

	Title: Executive Director
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	THE NORTHERN TRUST COMPANY
	 
	 
	 

	 
	 
	 
	 
	 

	By: /s/ Daniel J. Boote
	 
	 
	 

	Name: Daniel J. Boote
	 
	 
	 
	 

	Title: Senior Vice President
	 
	 
	 

	 
	 
	 
	 
	 

	U.S. BANK NATIONAL ASSOCIATION
	 
	 

	 
	 
	 
	 
	 

	By:
	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:2012.6.30-EX.10.6

Exhibit 10.6

LETTER WAIVER
Dated as of July 31, 2012
To the holders of the Notes
(collectively, “you” or the “Holders”)
issued pursuant to the Note Purchase Agreement referred to below

Ladies and Gentlemen:
We refer to the Note Purchase Agreement, dated as of November 23, 2010 (the “Note Purchase Agreement”), among Avon Products, Inc., a New York corporation (“us” or “API”), and each of the Holders.  Capitalized terms not otherwise defined in this Letter Waiver have the same meanings as specified in the Note Purchase Agreement.
As previously disclosed in API's annual report on Form 10-K for the year ended December 31, 2011, in the fourth quarter of 2011, API recorded a non-cash charge of $263 million to adjust good will and indefinite lived intangible assets related to API's Silpada business (the “Silpada Non-cash Charge”).  Due to the Silpada Non-cash Charge, as of September 30, 2012, depending upon API's financial result for the third quarter of 2012, API may be unable to comply with the Interest Coverage Ratio covenant set forth in the Note Purchase Agreement.  Since it was incurred in the fourth quarter of 2011 and the Interest Coverage Ratio under the Note Purchase Agreement is calculated based on a period of four fiscal quarters ending on the date of determination, the Silpada Non-cash Charge will not be relevant to calculations of the Interest Coverage Ratio for fiscal quarters after the third quarter of 2012.  
For purposes of Section 10.1 of the Note Purchase Agreement, we hereby request that you waive, and by executing this Letter Waiver you hereby waive, the requirement that we include in the calculation of Interest Coverage Ratio the Silpada Non-cash Charge and permit us, solely for the calculation of the Interest Coverage Ratio as of September 30, 2012, to add back to the consolidated pre-tax income of API and its Consolidated Subsidiaries the Silpada Non-cash Charge.
This Letter Waiver shall become effective as of the date first above written when, and only when, the Holders shall have received counterparts of this Letter Waiver executed by API, reaffirmed by the Subsidiary Guarantor and the Required Holders, and a letter waiver under the Bank Credit Agreement executed by the Required Banks (as defined in the Bank Credit Agreement) substantially in the form attached hereto as Exhibit A.
The Note Purchase Agreement, the Subsidiary Guaranty and the Notes, except to the extent of the waiver specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Except as expressly provided herein, the execution, delivery and effectiveness of this Letter Waiver shall not, operate as a waiver of any right, power or remedy of any Holder under the Note Purchase Agreement or the Subsidiary Guaranty, or constitute a waiver of any provision of the Note Purchase Agreement or the Subsidiary Guaranty.
API and the Subsidiary Guarantor represent and warrant that no Default or Event of Default has occurred and is continuing under the Note Purchase Agreement as of the date hereof and after giving effect to this Letter Waiver.

If you agree to the terms and provisions of this Letter Waiver, please evidence such agreement by executing and returning at least two counterparts of this Letter Waiver to David McMullen, Chapman and Cutler LLP, 595 Market Street, 26th Floor, San Francisco, CA 94109.

This Letter Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Letter Waiver by telecopier or other electronic means shall be effective as delivery of a manually executed counterpart of this Letter Waiver.
This Letter Waiver shall be governed by, and construed in accordance with, the laws of the State of New York, excluding choice-of-law principles of the law of such State that would prohibit the application of the laws of a jurisdiction other than such State.
Very truly yours,
	
					
	 
	 
	AVON PRODUCTS, INC.

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Richard J. Valone
	 

	 
	 
	 
	Name: Richard J. Valone

	 
	 
	 
	Title: Vice President & Treasurer

	 
	 
	 
	 
	 

	 
	 
	AVON CAPITAL CORPORATION

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Richard J. Valone
	 

	 
	 
	 
	Name: Richard J. Valone

	 
	 
	 
	Title: Vice President & Treasurer

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	METROPOLITAN LIFE INSURANCE COMPANY

	 
	 
	on behalf of itself and as investment manager of:

	 
	 
	 

	 
	 
	METLIFE INSURANCE COMPANY OF CONNECTICUT

	 
	 
	MISSOURI REINSURANCE (BARBADOS), INC.

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Judith A. Gulotta
	 

	 
	 
	 
	Name: Judith A. Gulotta

	 
	 
	 
	Title: Managing Director

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	THE NORTHWESTERN MUTUAL LIFE INSURANCE

	 
	 
	COMPANY

	 
	 
	 

	 
	 
	By:
	/s/ Timothy S. Collins
	 

	 
	 
	 
	Name: Timothy S. Collins

	 
	 
	 
	Title: Its Authorized Representative

	 
	 
	 
	 
	 

	 
	 
	THE NORTHWESTERN MUTUAL LIFE INSURANCE

	 
	 
	COMPANY FOR ITS GROUP ANNUITY SEPARATE

	 
	 
	ACCOUNT

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Timothy S. Collins
	 

	 
	 
	 
	Name: Timothy S. Collins

	 
	 
	 
	Title: Its Authorized Representative

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

	 
	 
	 

	 
	 
	By:
	/s/ Ward Clayton Argust III
	 

	 
	 
	 
	Name: Ward Clayton Argust III

	 
	 
	 
	Title: Manager, Investments

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Tad Anderson
	 

	 
	 
	 
	Name: Tad Anderson

	 
	 
	 
	Title: AVP, Investment

	 
	 
	 
	 
	 

	 
	 
	THE GREAT-WEST LIFE ASSURANCE COMPANY

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	NEW YORK LIFE INSURANCE COMPANY

	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

	 
	 
	 
	 
	 

	 
	 
	NEW YORK LIFE INSURANCE AND ANNUITY 

	 
	 
	CORPORATION
	 

	 
	 
	 
	 
	 

	 
	 
	 
	By:  New York Life Investment Management

	 
	 
	 
	LLC, Its Investment Manager
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

	 
	 
	 
	 
	 

	 
	 
	NEW YORK LIFE INSURANCE AND ANNUITY

	 
	 
	CORPORATION INSTITUTIONALLY OWNED LIFE

	 
	 
	INSURANCE SEPARATE ACCOUNT (BOLI 30C)

	 
	 
	 
	 
	 

	 
	 
	 
	By:  New York Life Investment Management

	 
	 
	 
	LLC, Its Investment Manager
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

	 
	 
	 
	 
	 

	 
	 
	NEW YORK LIFE INSURANCE AND ANNUITY

	 
	 
	CORPORATION INSTITUTIONALLY OWNED LIFE

	 
	 
	INSURANCE SEPARATE ACCOUNT (BOLI 30E)

	 
	 
	 
	 
	 

	 
	 
	 
	By:  New York Life Investment Management

	 
	 
	 
	LLC, Its Investment Manager
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	FORETHOUGHT LIFE INSURANCE COMPANY

	 
	 
	 

	 
	 
	 
	By:  New York Life Investment Management

	 
	 
	 
	LLC, Its Investment Manager

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	RGA REINSURANCE COMPANY, a Missouri corporation

	 
	 
	 

	 
	 
	By:  Principal Global Investors, LLC, a Delaware

	 
	 
	 
	limited liability company, its authorized

	 
	 
	 
	signatory
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adrienne L. McFarland
	 

	 
	 
	 
	Name: Adrienne L. McFarland

	 
	 
	 
	Title: Counsel

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James C. Fifield
	 

	 
	 
	 
	Name: James C. Fifield

	 
	 
	 
	Title: Assistant General Counsel

	 
	 
	 
	 
	 

	 
	 
	SYMETRA LIFE INSURANCE COMPANY, a Washington

	 
	 
	corporation

	 
	 
	 

	 
	 
	By:  Principal Global Investors, LLC, a Delaware

	 
	 
	limited liability company, its authorized signatory

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adrienne L. McFarland
	 

	 
	 
	 
	Name: Adrienne L. McFarland

	 
	 
	 
	Title: Counsel

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James C. Fifield
	 

	 
	 
	 
	Name: James C. Fifield

	 
	 
	 
	Title: Assistant General Counsel

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	NATIONWIDE LIFE INSURANCE COMPANY

	 
	 
	 
	 
	 

	 
	 
	By:
	

	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By: Babson Capital Management LLC, as                        Investment Advisor

	 
	 
	

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Elisabeth A. Perenick
	 

	 
	 
	 
	Name: Elisabeth A. Perenick

	 
	 
	 
	Title: Managing Director

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	MONY LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By:
	/s/ Amy Judd
	 

	 
	 
	 
	Name: Amy Judd

	 
	 
	 
	Title: Investment Officer

	 
	 
	 

	 
	 
	AXA EQUITABLE LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By:
	/s/ Amy Judd
	 

	 
	 
	 
	Name: Amy Judd

	 
	 
	 
	Title: Investment Officer

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	UNITED OF OMAHA LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Justin P. Kavan
	 

	 
	 
	 
	Name: Justin P. Kavan

	 
	 
	 
	Title: Vice President

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	THE OHIO NATIONAL LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By:
	/s/ Jed R. Martin
	 

	 
	 
	 
	Name: Jed R. Martin

	 
	 
	 
	Title: Vice President, Private Placements

	 
	 
	

	 
	 
	OHIO NATIONAL LIFE ASSURANCE CORPORATION

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Jed R. Martin
	 

	 
	 
	 
	Name: Jed R. Martin

	 
	 
	 
	Title: Vice President, Private Placements

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	TRANSAMAERICA LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By:
	 
	 

	 
	 
	 
	Name:

	 
	 
	 
	Title:

	 
	 
	 
	 
	 

	 
	 
	TRANSAMERICA PACIFIC INSURANCE COMPANY LTD

	 
	 
	 
	 
	 

	 
	 
	By:
	

	 

	 
	 
	 
	Name:  

	 
	 
	 
	Title: 

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	CONNECTICUT GENERAL LIFE INSURANCE COMPANY

	 
	 
	 

	 
	 
	By: CIGNA Investments, Inc. (authorized agent)

	 
	 
	 

	 
	 
	By:
	/s/ Deborah B. Wiacek
	 

	 
	 
	 
	Name: Deborah B. Wiacek

	 
	 
	 
	Title: Senior Managing Director

	 
	 
	 
	 
	 

	 
	 
	LIFE INSURANCE COMPANY OF NORTH AMERICA

	 
	 
	 

	 
	 
	By: CIGNA Investments, Inc. (authorized agent)

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Deborah B. Wiacek
	 

	 
	 
	 
	Name: Deborah B. Wiacek

	 
	 
	 
	Title: Senior Managing Director

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	FARM BUREAU LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By:
	/s/ Herman L. Riva
	 

	 
	 
	 
	Name: Herman L. Riva

	 
	 
	 
	Title: Securities Vice President

	 
	 
	 
	 
	 

	 
	 
	EQUITRUST LIFE INSURANCE COMPANY

	 
	 
	 
	 
	 

	 
	 
	By:
	

	 

	 
	 
	 
	Name:  

	 
	 
	 
	Title: 

[SIGNATURE PAGE FOR LETTER WAIVER]

Agreed as of the date first above written:

	
					
	 
	 
	AMERITAS LIFE INSURANCE CORP.

	 
	 
	ACACIA LIFE INSURANCE COMPANY

	 
	 
	THE UNION CENTRAL LIFE INSURANCE COMPANY

	 
	 
	

	 
	 
	By: Summit Investment Advisors Inc., as Agent

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Andrew S. White
	 

	 
	 
	 
	Name: Andrew S. White

	 
	 
	 
	Title: Managing Director - Private Placements

[SIGNATURE PAGE FOR LETTER WAIVER]

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