Exhibit 10.1
THIS NOVATION AGREEMENT is made the 19th day of June 2006
BETWEEN

         
(1)
  SANTANDER BANCORP    
 
  207 Ponce de Leon Avenue,    
 
  San Juan    
 
  Puerto Rico   (the “Borrower”)
 
       
(2)
  SANTUSA HOLDINGS S.L.    
 
  Avenida de Cantabria s/n,    
 
  28660 Boabdilla del Monte    
 
  Madrid   (the “Original Lender”)
 
       
(3)
  LLOYDS TSB BANK PLC    
 
  25 Gresham Street,    
 
  London, EC2V 7HN   (the “New Lender”)

WHEREAS

(A)   By a loan agreement dated 27 February, 2006 (the “Original Loan
Agreement”) the Original Lender agreed to make available to the Borrower a loan
facility of USD 725,000,000 (seven hundred and twenty five million US Dollars).
  (B)   At the date of this agreement the facility has been drawn down in full
and the principal amount of USD 725,000,000 (the “Loan”) is outstanding to the
Original Lender together with accrued interest from 27th February, 2006.   (C)  
The Original Lender and the New Lender have agreed that the Original Lender
shall transfer by novation its rights and obligations under the Loan Agreement,
including its rights to accrued interest, to the New Lender on the Effective
Date, and the Borrower has consented to the transfer of the Loan and all of the
Borrower’s obligations under the Original Loan Agreement to the New Lender.  
(D)   The Borrower and the New Lender have agreed that the Original Loan
Agreement be amended and restated on the Effective Date.

NOW IT IS HEREBY AGREED AND DECLARED as follows:

1.   DEFINITIONS       “Amended Loan Agreement” means the Original Loan
Agreement, as amended and restated in the form set out in Schedule I (Form of
Amended Loan Agreement).       “Accrued Interest Amount” means the amount of
accrued interest on the Loan up to and including the Effective Date,(as agreed
by the parties on or before 11 a.m. London time on the Notification Date).      
“Effective Date” means 22nd June, 2006, or such later date as the preconditions
specified in Clause 4 shall have been satisfied.       “Interest Consideration”
means an amount equal to the accrued interest on the Loan up to and including
the Effective Date, as agreed by the Original Lender and the New Lender on or
before 11 a.m. London time on the Notification Date.       “Notification Date”
means the date occurring two business days before the Effective Date.      
“Principal Consideration” means USD 725,000,000.

 

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    “Selection Notice” means a notice substantially in the form set out in Annex
II of the Amended Loan Agreement.       “Utilisation Fee” has the meaning
ascribed to that term under the Amended Loan Agreement.   2.   NOVATION      
With effect from the Effective Date:

  (i)   the Original Lender and the Borrower shall be released from their
existing and future obligations towards one another under the Original Loan
Agreement and their respective rights against one another shall be cancelled
(being the “Discharged Rights and Obligations”);     (ii)   the Borrower and the
New Lender shall assume obligations towards one another and/or acquire rights
against one another which differ from the Discharged Rights and Obligations only
insofar as the Borrower and the New Lender have assumed and/or acquired them in
place of the Borrower and the Original Lender.

3.   PAYMENTS       On the Effective Date:

  (i)   the New Lender will pay the Principal Consideration to the Original
Lender;     (ii)   the New Lender will pay the Interest Consideration to the
Original Lender;     (iii)   the Borrower will pay the Accrued Interest Amount
to the New Lender pursuant to its obligations under the Amended Loan Agreement;
    (iv)   the Borrower will pay the Utilisation Fee to the New Lender pursuant
to its obligations under the Amended Loan Agreement.

    Payments to the Original Lender shall be made to the following account:

      Account number 10936195 with CITIBANK N.A, New York (SWIFT address
CITIUS33) in name of Banco Santander Central Hispano S.A. Madrid, for further
credit to Santusa Holding S.L. (account number: 0049-1799-41-281-2202946 and
IBAN: ES75-0049-1799-4128-1220-2946);

    Payments to the New Lender shall be made to the following account:

      Bank of New York, New York (SWIFT address IRVTUS3N) favour of LLOYDS TSB
BANK, Loans Administration Dept, Bristol, Account No. 8900047003 under reference
BANCOMER;

    All payments shall be made in US Dollars by 10 a.m. local time on the due
date concerned in same day funds free and clear of any set-off, counterclaim,
restriction or condition whatsoever and without any deduction in respect of
taxes, duties, levies, imposts, charges, fees or withholdings of any nature
whether made before or after the date of this agreement.

4.   AMENDMENT AND RESTATEMENT OF THE FACILITY LETTER       With effect from the
Effective Date the Original Loan Agreement shall be amended and restated in the
form set out in Schedule I (Form of Amended Loan Agreement).   5.   CONDITIONS
PRECEDENT       This Agreement shall not be effective until the New Lender has
received in a form acceptable to it:

  (i)   a certified copy of the resolution of the board of directors of the
Borrower evidencing the authority of the Borrower to enter into this Agreement
and transfer the Loan in accordance with its terms and

 

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      certificate of authority and incumbency nominating the person(s)
authorised to sign this Agreement, together with specimen signatures of such
person(s);     (ii)   evidence of the authority of the Original Lender to enter
into this Agreement;     (iii)   the guarantee from Banco Santander Central
Hispano S.A. required pursuant to Clause 3(c) of the Amended Loan Agreement;    
(iv)   a legal opinion from Pietrantoni Mendez & Alvarez LLP addressed to the
New Lender in respect of the laws of the Commonwealth of Puerto Rico;     (v)  
a Selection Notice to be delivered by the Borrower pursuant to the Amended Loan
Agreement by not later than 9 a.m. London time on the Notification Date,
selecting the interest period to apply to the Loan with effect from the
Effective Date.

    The New Lender shall provide the Original Lender with reasonable evidence of
authority of the New Lender to enter into this Agreement.

6.   LIMITATION OF RESPONSIBILITY OF ORIGINAL LENDER

  (i)   The New Lender confirms to the Original Lender that it has made its own
independent appraisal of the affairs and creditworthiness of the Borrower and
has not relied exclusively on any information provided to it by the Original
Lender in connection with the Original Loan Agreement.     (ii)   The Original
Lender makes no representation or warranty to the New Lender in respect of the
validity and effectiveness of the Original Loan Agreement, the financial
condition of the Borrower, or the performance of any obligation of the Borrower
under the Original Loan Agreement.     (iii)   Nothing in this Agreement obliges
the Original Lender to accept a re-transfer from the New Lender of any of the
rights or obligations assigned or transferred under this Agreement, or to
support any losses directly or indirectly incurred by the New Lender by reason
of the non-performance by the Borrower of its obligations under the Original
Loan Agreement.

7.   REPRESENTATIONS & WARRANTIES

  (i)   The Borrower hereby represents and warrants to the New Lender that all
action necessary to authorise the Borrower’s execution of this Agreement and its
performance of its obligations both under this Agreement and under the Amended
Loan Agreement has been duly taken and neither such execution nor such
performance will constitute or result in any breach of any agreement, law,
requirement or regulation.     (ii)   On the date of this Agreement and on the
Effective Date the Borrower makes the representations and warranties in Clause 8
(Representations and Warranties) of the Amended Loan Agreement by reference to
the facts and circumstances then existing.

8.   MISCELLANEOUS

  (i)   This Agreement and the Amended Loan Agreement shall be read and
construed as one instrument.     (ii)   The Borrower shall reimburse the New
Lender on demand with the amount of all reasonable legal fees or other costs
incurred by the New Lender in connection with the preparation and execution of
this Agreement.     (iii)   This agreement may be executed in any number of
counterparts, which together shall constitute a single agreement.     (iv)  
This agreement shall not otherwise confer any benefit on or be enforceable by a
third party.     (v)   This Agreement shall be construed, interpreted and
governed in all respects in accordance with the laws of England. The Borrower
and the Original Lender hereby agree to submit to the jurisdiction of the
English courts.

 

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THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.

     
Signed for and on behalf of
  Signed for and on behalf of
LLOYDS TSB BANK PLC
  SANTANDER BANCORP
 
   
 
  By: /s/ Carlos M. García
 
   
By: /s/ Richard Bowser
  By: /s/ Juan P. Pérez Hanley
 
   
      Richard Bowser
   
      Relationship Director
  Signed for and on behalf of
 
  SANTUSA HOLDINGS S.L.
 
   
By: /s/ Adrian Tooth
  By: /s/ César Ortega
 
   
     Adrian Tooth
  By: /s/ Ana Cueto
 
   
     Relationship Manager
   

 

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SCHEDULE I
FORM OF AMENDED LOAN AGREEMENT

 

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Santander BanCorp
  Lloyds TSB Bank plc,
207 Ponce de Leon Ave
  Financial Institutions
Hato Rey
  25 Gresham Street,
San Juan,
  London,
Puerto Rico 00917
  EC2V 7HN

     
SWIFT:
  LLOYDGB2L
Fax No:
  +44 20 7661 4790
Telephone:
  +44 20 7661 4771
 
   
Reference:
  D\PHUN\MCPJ1959
Date:
  27th February, 2006

Dear Sirs,
Amended and Restated USD 725,000,000 Loan Facility
We are pleased to confirm that we are prepared to make available to you a loan
facility subject to the following terms and conditions.

1.   Definitions       “Borrower” means Santander BanCorp.       “Business Day”
means a day (other than a Saturday or a Sunday) on which banks are open for
business in London and New York.       “Commitment Termination Date” means the
date which occurs one month following the date of this agreement.      
“Dollars” and “USD” means the lawful currency of the United States of America.  
    “Early Termination Event” means an event or circumstance set out in Clause
12 (Early Termination).       “Facility” means the loan facility in Dollars made
available under this agreement.       “Facility Amount” means USD 725,000,000
(United States Dollars Seven Hundred and Twenty-Five Million).       “Guarantee”
means a guarantee in a form acceptable to the Lender from Banco Santander
Central Hispano S.A. Madrid in respect of the obligations of the Borrower to the
Lender in respect of the Loan.       “Interest Period” means, in respect of the
Loan, each period determined in accordance with Clause 4(d) – (Interest).      
“Lender” means Lloyds TSB Bank plc, acting through its Financial Institutions
office.

 

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    “LIBOR” means with respect to the Loan and an Interest Period,

(a) the British Bankers Association Interest Settlement Rate displayed on the
appropriate page of the Reuters screen or, if no such screen rate is available,
(b) the arithmetic mean of the rates (rounded up to four decimal places) as
supplied to the Lender at its request quoted by the Reference Banks to leading
banks in the London interbank market,

    for the offering of deposits in Dollars for a period comparable to that of
the Interest Period concerned as of 11 a.m. two Business Days prior to the
proposed date of drawing.       “Loan” means the loan made or to be made to the
Borrower under this agreement or, as the case may be, the balance outstanding
from time to time of such loan.       “Mandatory Cost” means the percentage rate
per annum calculated by the Lender as being its cost of compliance with the
requirements of the Financial Services Authority in respect of the Loan.      
“Margin” means 0.10% per annum.       “Market Disruption Event” means an
inability to determine LIBOR or only one of the Reference Banks supplies a rate
to determine LIBOR.       “Material Adverse Effect” means a material adverse
effect on the ability of the Borrower to perform its payment obligations under
this agreement.       “Notification Time” means 9.00 a.m. London time.      
“Reference Banks” means the principal London offices of Barclays Bank, Royal
Bank of Scotland, and HSBC Bank, or such other banks as may be agreed between
the Borrower and the Lender.       “Repayment Date” means, in respect of the
Loan, 28th December, 2006.       “Selection Notice” means a notice substantially
in the form set out in Appendix II.       “Tax” means any tax, levy impost duty
or other charge or withholding of a similar nature (including any penalty or
interest payable in connection with any failure to pay or any delay in paying
any of the same).       “Utilisation Request” means a notice substantially in
the form set out in Annex I.

 

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2.   Utilisation

  (a)   The Borrower may utilise the Facility by delivery to the Lender of a
duly completed Utilisation Request on any Business Day occurring on or before
the Commitment Termination Date not later than the Notification Time 2 Business
Days prior to the proposed date of drawing.     (b)   The Loan may be drawn in
one amount not to exceed the Facility Amount.     (c)   The Lender will only be
obliged to make the Loan if on the date of the Utilisation Request and on the
proposed date of utilisation no Early Termination Event has occurred and is
continuing, and Dollars are freely available to the Lender in the London
interbank market.     (d)   The proceeds of the Loan shall be applied by the
Borrower to refinance indebtedness incurred in connection with its purchase of
substantially all the assets and operations of the Island Finance business in
Puerto Rico.

3.   Conditions Precedent       The Borrower may not deliver a Utilisation
Request until the Lender has received the following conditions precedent:

  (a)   a copy of this agreement duly signed by the Borrower as evidence of
acceptance of its terms;     (b)   a certificate of the Borrower’s signatories
authorised to execute and utilise the Facility; and     (c)   the Guarantee.

4.   Interest

  (a)   The Loan will bear interest from the date of drawing until the Repayment
Date calculated on the basis of a 360-day year for the exact number of days
elapsed.     (b)   The Borrower shall pay accrued interest on the Loan on the
last day of each Interest Period.     (c)   The interest rate for each Interest
Period , other than the initial Interest Period, will be determined by the
Lender and shall be the aggregate of:

  (i)   the Margin;     (ii)   LIBOR; and     (iii)   Mandatory Cost, if any.

 

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  (d)   The term for each Interest Period shall be one, three, or 6 months, or
such other period as the Borrower and Lender may agree, provided that no
Interest Period shall extend beyond the Repayment Date. The Borrower may request
an Interest Period by means of the Utilisation Request in respect of the initial
Interest Period, and in a Selection Notice if the Loan has already been drawn.  
  (e)   Each Selection Notice shall be delivered not later than the Notification
Time 2 Business Days prior to first day of the Interest Period concerned. If the
Borrower fails to deliver a Selection Notice then the relevant Interest Period
shall be one month.     (f)   Each Interest Period other than the initial
Interest Period shall start on the last day of the preceding Interest Period.  
  (g)   The initial Interest Period shall start on the date of drawdown and end
on 22nd June, 2006 and the applicable interest rate for the initial Interest
Period shall be 4.96500% inclusive.     (h)   The Lender agrees to promptly
notify the Borrower of the rate of interest applicable for each Interest Period.

5.   Utilisation Fee       The Borrower will pay the Lender on 22nd June 2006 a
utilisation fee of 0.015% calculated on the amount of the Loan.   6.  
Repayment, Prepayment & Cancellation

  (a)   The Loan shall be repaid in one amount on the Repayment Date.     (b)  
The Borrower shall not repay all or any part of any Loan except in the manner
expressly provided for in this agreement.     (c)   Provided no drawing has been
made, the Borrower may by not less than three Business Days’ written notice to
the Lender cancel the Facility in whole, but not in part.

7   Payments

  (a)   The repayment of principal and payment of interest and other amounts due
to the Lender under this agreement shall be made in Dollars by 10 a.m. New York
time on the due date in same day funds to the account of the Lender with such
bank in New York or any other financial centre in the United States of America
as the Lender shall from time to time stipulate.     (b)   All payments shall be
made free and clear of any set-off, counterclaim, restriction or condition
whatsoever and without any deduction in respect of taxes, duties, levies,
imposts, charges, fees or withholdings of any nature whether made before or
after the date of this agreement.

 

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  (c)   In the event of the Borrower being compelled by law to make any such
deduction, the Borrower shall forthwith pay the Lender such additional amounts
as may be necessary to ensure that the aggregate of the net amounts received by
the Lender, after such deduction or withholding, shall equal the amount which
would have been received in the absence of such deduction or withholding. In
such event the Borrower shall provide the Lender within 45 days of the date of
such payment with a certified copy of the receipt evidencing the payment of such
tax or other deduction issued by the relevant taxing authority.

8.   Representations and Warranties       The Borrower makes the representations
and warranties set out in this clause.

  (a)   It is a corporation duly constituted and validly existing under the laws
of the Commonwealth of Puerto Rico and that it has all authorisations required
to carry on its business.     (b)   Its execution of this agreement and the
performance of its terms are within the Borrower’s powers and have been duly
authorised by all necessary actions and do not and will not contravene any law
or any contractual or other restriction binding upon the Borrower.     (c)  
This agreement constitutes a legally binding obligation of the Borrower
enforceable in accordance with its terms.     (d)   Its obligations in respect
of any utilisation of the Facility do not and will not conflict with any law or
regulation applicable to it, including without limitation exchange and other
controls of the Federal Reserve Board.     (e)   Its payment obligations in
respect of utilisations under the Facility will at all times rank pari passu
with the claims of all its other unsecured creditors (save for claims
mandatorily preferred by law applying generally).     (f)   All consents,
licences, approvals, authorisations and registrations which are required in
connection with the execution, delivery, performance, legality and
enforceability of this agreement have been duly obtained or effected, as the
case may be, and are in full force and effect.     (g)   All amounts payable by
the Borrower under this agreement may be made free and clear of and without
deduction for or on account of any Tax.     (h)   No stamp or registration duty
or similar taxes or charges are payable in the Commonwealth of Puerto Rico in
respect of this agreement.     (i)   The execution by the Borrower of this
agreement constitutes, and performance of its terms will constitute, private and
commercial acts, and the Borrower will not be able to claim immunity from suit
or other legal process in any proceedings taken in relation to this agreement.  
  (j)   The choice of English law as the governing law of this agreement will be
recognised and enforced in its jurisdiction of incorporation. Any judgment
obtained in England in relation to this agreement will be recognised and
enforced in its jurisdiction of incorporation.

 

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  (k)   No Early Termination Event is continuing or might reasonably result from
making a drawing under this Facility.     (l)   No litigation, arbitration or
administrative proceedings of or before any court, which, if adversely
determined, might reasonably be expected to have a Material Adverse Effect have
(to the best of its knowledge and belief) been started or threatened against it.

    These representations and warranties shall be deemed to be repeated by
reference to the facts and circumstances then existing on the date of the
Utilisation Request, on the date of drawing and on the date of each Selection
Notice.   9.   Covenants       The Borrower hereby undertakes to the Lender that
during the life of this facility and while any amount is owing to the Lender
under this agreement it will:

  (a)   forward to the Lender its audited annual report and accounts as soon as
these are available to its shareholders and will provide the Lender with such
other financial information as the Lender may reasonably request from time to
time;     (b)   promptly advise the Lender of the occurrence of any event which
constitutes or with the lapse of time or giving of notice or both would
constitute an Early Termination Event;     (c)   promptly obtain, maintain and
comply with any authorisations, licences and permissions required under any law
or regulation to enable it to perform its obligations under, or for the validity
or enforceability of, this agreement; and     (d)   refrain from making any
substantial change to the general nature or scope of its business.

10.   Illegality       If it becomes unlawful in any applicable jurisdiction for
the Lender to perform any of its obligations as contemplated by this agreement
or to fund or maintain the Loan, then upon notification by the Lender to the
Borrower the Facility shall be immediately cancelled and the Borrower shall
repay the Loan on the date specified by the Lender in such notice, being no
earlier than the last day of any applicable grace period permitted by law.

 

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11.   Market Disruption   (a)   If LIBOR falls to be determined by reference to
rates provided by the Reference Banks and a reference bank does not supply an
offered rate by noon two Business Days before the first day of the Loan, the
applicable LIBOR shall be determined on the basis of the quotations of the
remaining Reference Banks.   (b)   If a Market Disruption Event occurs at the
time LIBOR is to be determined, then the Lender shall promptly notify the
Borrower and the rate of interest applicable to the Loan shall be the rate which
represents the sum of the Margin, Mandatory Cost, if any and the cost of funding
for the Loan from whatever source the Lender may reasonably select.   (c)   If a
Market Disruption Event occurs and the Borrower so requires, the Lender and the
Borrower shall enter into negotiations (for a period of not more then 10 days)
with a view to agreeing a substitute basis for determining the rate of interest.
Any alternative basis agreed pursuant to clause 11(b) shall be binding on the
Borrower and the Lender.

12.   Early Termination       If:

  (a)   the Borrower fails to pay any sum due to the Lender under this agreement
on its due date; or     (b)   the Borrower commits any breach of or omits to
observe any other obligation accepted or undertaking given under this agreement;
or     (c)   any representation, warranty or statement made by the Borrower
pursuant to this agreement proves to have been incorrect as of the date it was
made (or deemed made) or is breached; or     (d)   any indebtedness of the
Borrower becomes or is capable of being declared due prior to its due date for
repayment, or the Borrower defaults in the repayment when due of any
indebtedness or in paying on the due date any sum payable under any guarantee,
or indemnity given by it; or     (e)   any security interest securing financial
indebtedness over any asset of the Borrower becomes enforceable; or     (f)  
the Borrower is unable or admits inability to pay its debts as they fall due,
suspends making payments on any of its debts or commences negotiations with
creditors with a view to rescheduling any of its indebtedness; or the value of
its assets is less than its liabilities (taking into account contingent and
prospective liabilities); or a moratorium is declared in respect of any of its
indebtedness; or     (g)   any corporate action, legal proceedings or other
procedure or step is taken in relation to the Borrower regarding (i) the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (ii) a composition, assignment or
arrangement with creditors; or (iii) the appointment of a liquidator, receiver,
administrator, administrative receiver or other similar officer; or (iv) any
analogous procedure or step is taken in any jurisdiction; or     (h)   the
Borrower ceases to carry on its business, or a substantial part of its assets
are seized or appropriated for any reason; or

 

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  (i)   any governmental or other registration licence or approval necessary to
enable the Borrower to continue its business or to comply with or perform any of
its obligations under this agreement is revoked, withdrawn, modified or withheld
or otherwise fails to remain in full force and effect, or     (j)   the
person(s) who now have control or voting control of the Borrower cease to have
control or voting control of the Borrower; or     (k)   it is, or becomes,
unlawful for the Borrower to perform any of its obligations under this
agreement; or     (l)   any event, or series of events occurs which, in the
opinion of the Lender, might produce a Material Adverse Effect; or     (m)   the
Borrower fails to comply with the regulations of the Federal Reserve Board or
any other regulations, legislation or license applicable to it as a bank holding
company, or any consent, authorisation, license, registration or approval from
any regulatory or other authority required by the Borrower in the conduct of its
business is not granted or is revoked or terminated or expires and is not
renewed or otherwise ceases to be in full force and effect; or     (n)   the
Guarantee ceases to be in full force and effect or notice of discontinuance of
the Guarantee is received;

    then upon the happening of such event the obligations of the Lender under
this agreement shall immediately terminate and the Lender shall have the right
to make the Loan, together with accrued interest and any other amount owing, due
and payable on demand.       The Borrower will pay on demand interest on any
overdue amounts at the rate which is 2% per annum above the cost to the Lender
of funding such amounts for such period or consecutive periods as it may select
running from the due date for such amounts until payment in full by the
Borrower.

13.   Indemnity

  (a)   The Borrower shall indemnify the Lender on demand against all losses and
expenses incurred by the Lender arising out of the occurrence of an Early
Termination Event and/or funding the Loan if requested by the Borrower in a
Utilisation Request but not made by reason of the operation of any one or more
of the provisions of this agreement (other than by reason of default or
negligence by the Lender) and/or the payment of the Loan in whole or in part
being made by the Borrower other than on its due date. The Lender’s certificate
of the amount of such losses (setting out in reasonable detail the basis for
calculation of such amount and following, where relevant, standard market
practice) shall in the absence of manifest error be conclusive and binding on
the Borrower.     (b)   The Borrower shall pay to the Lender an amount equal to
the loss, liability or cost which the Lender determines will be or has been
(directly or indirectly) suffered for or on account of any Tax, in connection
with the Loan other than a Tax assessed on the Lender under the law of the
jurisdiction in which the Lender is treated as resident for tax purposes if that
Tax is imposed on or calculated by reference to the net income received or
receivable by the Lender.

 

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14.   Termination of Facility       This agreement shall terminate on the
Repayment Date except in respect of any amount, actual or contingent,
outstanding on that date.   15.   Benefit of Agreement

  (a)   This agreement shall be binding upon and shall inure only to the benefit
of the Borrower and the Lender and their respective successors and assigns
provided that no party shall assign or transfer any of its respective rights or
obligations under this agreement without the prior written consent of the other
party.     (b)   This agreement shall not otherwise confer any benefit on or be
enforceable by a third party.

16.   Miscellaneous       In addition to interest and all other amounts payable
under this agreement the Borrower shall pay the Lender on demand any cost or
loss to the Lender consequent on the introduction of or any change in any
applicable law, regulation, requirement, directive or request or any change in
its interpretation by any relevant governmental, fiscal, monetary or other
authority or by any self-regulating organisation or court of competent
jurisdiction (including without limitation any request or requirement which
affects the manner in which the Lender allocates its capital resources to its
obligations under this agreement) the effect of which is to increase the cost or
reduce the return to the Lender.   17.   Notices       All notices, requests,
demands, consents and other communications given or sent under this agreement
shall be in writing and (unless otherwise indicated) mailed, or faxed to the
applicable party at its address indicated below or at such other address as such
party may designate by written notice to the other party.

           
 
  If to the Borrower:     Santander Bancorp,
 
        Attn: Treasury Back Office
 
        207 Ponce de Leon Ave.
 
        5th Floor
 
        San Juan, PR 00917
 
         
 
        Telephone: 1 – 787 – 777 — 4417
 
         
 
        Facsimile: 1 – 787 – 777 — 4193
 
                or such other office of the Borrower as may be notified to the
Lender in writing.

 

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  If to the Lender (other than operational notices):   Lloyds TSB Bank plc,
 
        Financial Institutions,
 
        25 Gresham Street
 
        London EC2V 7HN
 
         
 
        Telephone: +44 20 7661 4771
 
         
 
        Facsimile: 44 20 7661 4790
 
         
 
        SWIFT: LLOYDGB2L
 
                or such other office of the Lender as may be notified to the
Borrower in writing.

           
 
  If to the Lender (for operational notices):              Lloyds TSB Bank plc
 
        Loans Administration Department
 
        Bank House
 
        Wine Street
 
        Bristol BS1 2AN
 
         
 
        Telephone: +44 117 923 3359/3477
 
         
 
        Facsimile: +44 117 923 3367
 
         
 
        SWIFT: LLOYDGB2L
 
                or such other office of the Lender as may be notified to the
Borrower in writing.

    All such notices, requests, demands, consents or other communications shall
be deemed to have been duly given when received in legible form by the party to
which they are required or permitted to be given or made under this agreement.  
    All fax communications made by the Borrower shall be promptly confirmed by
letter, but so that a failure to confirm shall not affect the validity of the
original fax communication. All communications received by the Lender by fax
which appear to be given by an authorised signatory of the Borrower and are
believed by the Lender to be genuine, shall have the same validity as a
communication received by mail.   18.   Governing Law       The parties hereto
expressly agree that this agreement shall be construed interpreted and governed
in all respects in accordance with the laws of England. The Borrower hereby
agrees to submit to the jurisdiction of the English Courts but this shall not
prejudice the rights of the Lender in any other jurisdiction where proceedings
may lawfully be commenced against the Borrower.

 

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12
Please signify your acceptance of the terms of this agreement by signing and
returning the attached counterpart.
Yours faithfully,
For and on behalf of
LLOYDS TSB BANK PLC

      ....................................
Authorised Signatory   ...................................
Authorised Signatory

Accepted by and agreed to
For and on behalf of
SANTANDER BANCORP

      .............................
Authorised Signatory   ...................................
Authorised Signatory

 

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ANNEX I
Utilisation Request
To: Lloyds TSB Bank plc
Loans Administration Dept
Bank House
Wine Street
Bristol BS1 2AN
From: Santander BanCorp,
[Address]
[Date]
Dear Sirs,
Santander BanCorp
USD 725,000,000 Loan Agreement dated 27thFebruary, 2006 (the “Agreement”)

1.   We wish to borrow the Loan on the following terms:

         
 
  Proposed utilisation date:   [ xxx ] (or if that is not a Business Day, the
next Business Day).
 
       
 
  Amount:   USD 725,000,000.
 
       
 
  Initial Interest Period:   Date of drawdown to 22nd June, 2006.

2.   The proceeds of the Loan should be credited to:

         
 
  Account [ xxx ] of Santander BanCorp    
 
       
 
  [Name of Bank]    
 
       
 
  [Address of Bank]    

3.   We confirm that no Early Termination Event has occurred under the
Agreement.   4.   This Utilisation Request is irrevocable.

Yours truly,
Santander BanCorp
By:
Authorised Signatory

 

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ANNEX II
Selection Notice
To: Lloyds TSB Bank plc
Loans Administration Dept
Bank House
Wine Street
Bristol BS1 2AN
From: Santander BanCorp,
[Address]
[Date]
Dear Sirs,
Santander BanCorp
USD 725,000,000 Loan Agreement dated 27th February 2006 (the “Agreement”)

1.   We refer to the Loan and the current Interest Period ending on [       ].  
2.   We request that the next Interest Period for the Loan is [       ]:   3.  
This Selection Notice is irrevocable.

Yours truly,
Santander BanCorp
By:
Authorised Signatory