Exhibit 10.3
SECOND AMENDMENT TO INVESTMENT AGREEMENT
     This SECOND AMENDMENT (this “Second Amendment”) to the Investment Agreement
(the “Agreement”) dated as of October 24, 2005 and amended as of November 22,
2005 between Banco Santander Central Hispano, S.A., a Spanish sociedad anónima
(“Buyer”), and Sovereign Bancorp, Inc., a Pennsylvania corporation (the
“Company”), is made as of May 31, 2006, between Buyer and the Company.
     WHEREAS, in accordance with Section 13.02(a) of the Agreement, the parties
wish to amend the Agreement in certain respects as more fully set forth below;
     NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Amendment To Agreement
     Section 1.01 . Amendment to Section 1.01 (“Definitions”). The definition of
“PA Law Termination Date” in Section 1.01(a) of the Agreement is hereby amended
by adding after the word “Company” and before the word “by” the following: “, in
each case”.
     Section 1.02 Amendment to Section 2.04 (“Gross Up Rights”).
     (a) Section 2.04(c)(iv) is hereby amended to replace the period at the end
thereof with a semicolon.
     (b) Section 2.04(c) is hereby amended by adding at the end thereof the
following proviso:
     “provided that if the treasury share exception to NYSE Rule 312.03 shall
have been altered (on a basis which could reasonably apply to the purchase of
Voting Securities contemplated by this Section 2.04(c)) or eliminated, or there
shall be an outstanding proposal by the NYSE or the SEC to alter (on a basis
which could reasonably be expected to apply to the purchase of Voting Securities
contemplated by this Section 2.04(c)) or eliminate the treasury share exception,
then in lieu of clause (i) above, and subject to Applicable Law, Buyer and its
Affiliates shall have the option to purchase in open market transactions or from
third parties that number of Voting Securities that Buyer or its Affiliates
would otherwise have had the right to purchase pursuant to clause (i) above (up
to the Permitted Limit). Upon the request of Buyer, the Company will promptly as
practicable furnish Buyer with a statement setting forth the number of Treasury

 

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Shares then held by the Company, specifying in reasonable detail the
transactions giving rise to such Treasury Shares.”
ARTICLE 2
Miscellaneous
     Section 2.01 . Article 13 of the Agreement. All provisions of Article 13 of
the Agreement, as amended hereby, shall continue to apply to the Agreement, as
amended hereby, and Sections 13.01 to 13.09 shall apply to this Second
Amendment, with each reference therein to “Agreement” deemed to be a reference
to this Second Amendment.
     Section 2.02 . Effect on Investment Agreement. The amendments to the
Agreement contemplated by this Second Amendment are limited precisely as written
and shall not be deemed to be an amendment to any other terms or conditions of
the Agreement.
     Section 2.03 . Effectiveness. This Second Amendment shall become effective
as of the date hereof. Upon effectiveness, the Agreement shall continue in full
force and effect as amended by this Second Amendment in accordance with its
terms and all references in the Agreement to the “Agreement” shall be deemed to
mean the Agreement as amended by this Second Amendment.
     Section 2.04 . Entire Agreement. This Second Amendment, the Amendment dated
November 22, 2005, the Agreement, the Registration Rights Agreement and the
Voting Trust Agreement constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.
     Section 2.05 . Defined Terms. Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Agreement.

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.

             
 
                BANCO SANTANDER CENTRAL HISPANO, S.A.    
 
           
 
  By:   /s/ Juan Rodriguez Inciarte    
 
           
 
      Name: Juan Rodriguez Inciarte
Title: Director General    
 
                SOVEREIGN BANCORP, INC.    
 
           
 
  By:   /s/ Mark R. McCollom    
 
           
 
      Name: Mark R. McCollom    
 
      Title: Chief Financial Officer