Exhibit 10.43
(SOVEREIGN BANCORP LOGO) [w73220w7322000.gif]
February 11, 2009
Kirk Walters
c/o Sovereign Bancorp, Inc.
          Re:  Agreement and General Release
Dear Kirk:
          This Agreement and General Release (“Agreement and Release”) confirms
our discussions regarding your employment with Sovereign Bancorp, Inc. (and/or
its related entities, defined as “Sovereign”).
          In consideration for your signing and returning (and not revoking)
this Agreement and Release, Sovereign will provide you with the following
benefits to which you are not otherwise entitled:

  (i)   $8,137,695 which represents an amount approximately equal to the change
in control or termination benefits set forth in your prior employment agreement
and/or change in control agreement with Sovereign (less applicable deductions
and withholdings). Sovereign will provide this payment to you notwithstanding
that you have chosen not to resign for Good Reason. Sovereign shall make such
payment no later than five (5) business days after the expiration of the
revocation period described below (provided that you have signed and returned
this Agreement and Release and have returned the attached letter confirming that
you have not revoked this Agreement and Release); and     (ii)   an employment
agreement as attached hereto as Exhibit A.

          The amount set forth above includes the “Gross-Up Payment” under
Section 8(a) of your prior employment agreement with Sovereign. If you are
required to pay any additional excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (“Excise Tax”), in respect of (i) the above
amount paid by Sovereign and/or (ii) any other amounts paid,

 

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distributed, or treated as paid or distributed, by Sovereign or compensation
earned by you in connection with Sovereign’s recent acquisition by Banco
Santander, S.A. which amounts or compensation are treated as excess parachute
payments under Section 280G of the Internal Revenue Code of 1986, as amended,
then Sovereign will promptly pay to you, or on your behalf, the amount of the
Gross-Up Payment that was not, but should have been, paid by Sovereign to you,
as determined by a nationally-recognized accounting firm chosen by Sovereign in
its sole discretion. Sovereign’s obligation to pay such amount is conditioned on
your agreement to notify Sovereign promptly in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Sovereign of an additional Gross-Up Payment. If Sovereign notifies you in
writing that it desires to contest such claim, you agree to cooperate with
Sovereign in contesting the claim; provided, however, that Sovereign will pay
directly all reasonable costs and expenses (including additional interest and
penalties) incurred in connection with such contest and will indemnify and hold
you harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Any Gross-Up Payment or
other payment pursuant to this paragraph will be paid no later than the date the
related taxes are due.
          In order to be eligible to receive the payment and other benefits
described above to which you are not otherwise entitled, you are required to
agree to the terms contained in this Agreement and Release, including the
General Release provisions set forth below, indicate your agreement by signing
and returning this Agreement and Release, and not revoke this Agreement and
Release as provided below.
          In consideration for receiving the change in control or termination
benefits amount described above without your having to resign for Good Reason
and for the offer of the employment agreement, you hereby agree to release
Sovereign and any and all of Sovereign’s predecessors, successors, assigns,
subsidiaries, parents, branches, divisions, affiliates, related entities and
present and former officers, directors, employees and agents (of either
Sovereign or any and all of Sovereign’s predecessors, successors, assigns,
subsidiaries, parents, branches, divisions, affiliates and related entities)
(including, but not limited to, Banco Santander, S.A. and its parents,
subsidiaries, affiliates or related entities) (collectively “Sovereign Entities
& Officials”), individually and in their official capacities, of and from all
causes of action, claims, damages, judgments or agreements of any kind arising
up to and including the date of your execution of this Agreement and Release,
including, but not limited to, all matters arising out of your employment with
Sovereign (or its parents, subsidiaries, affiliates or related entities), and of
and from any change in control or termination provisions. This release includes,
but is not limited to, any and all alleged claims based on Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1866, the Age Discrimination
in Employment Act (including the Older Workers Benefit Protection Act), the
Americans with Disabilities Act, the New York State and New York City Human
Rights Laws, the New York Labor Law, the Pennsylvania Human Relations Act, the
Pennsylvania Wage Payment and Collection Law, the Massachusetts Fair Employment
Practices Act, the Massachusetts Age Discrimination Law, the Massachusetts Equal
Rights Act, the Employee Retirement Income Security Act of 1974, the Family and
Medical Leave Act of 1993, the Worker Adjustment and Retraining Notification
Act, or any common law, public policy, contract (whether oral or written,
express or implied) or tort law, or any other local, state, federal or foreign
law, regulation, ordinance or rule having any bearing whatsoever on the terms
and conditions of your employment and the cessation thereof. By signing this
Agreement and

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Release, you are providing a complete waiver of all claims that may have arisen,
whether known or unknown, up until the time that this Agreement and Release is
executed by you. Notwithstanding the foregoing, this release is not intended to
release any rights: (i) to indemnification, if any, pursuant to Sovereign policy
or applicable law; and/or (ii) to any vested or unvested restricted stock and/or
restricted stock units of Sovereign, if any (your rights, if any, to
indemnification or to the stock and/or restricted stock units will be governed
by the applicable policy, plan or law).
          You acknowledge and agree that any employment agreement, offer letter
and/or any agreement regarding change in control or termination benefits,
previously entered into between you and Sovereign are immediately null and void.
          In addition, you will keep in confidence and will not, except as
specifically authorized in writing by Sovereign or as otherwise required by law,
disclose to any third party or use for the benefit of yourself or any third
party any confidential or proprietary information about Sovereign (or its
parents, subsidiaries, affiliates or related entities) which you acquired,
developed or created by reason of your employment, except for information that
is or becomes public other than through your breach of this paragraph.
          You agree that you will cooperate with Sovereign (or its parents,
subsidiaries, affiliates or related entities) and its legal counsel in
connection with any current or future investigation or litigation relating to
any matter with which you were involved or of which you have knowledge or which
occurred during your employment. Such assistance will include, but not be
limited to, depositions and testimony and will continue until such matters are
resolved. Sovereign will provide you with reasonable notice whenever possible of
the need for your cooperation. To the extent practicable, Sovereign will limit
your cooperation to regular business hours (and, to the extent practicable, will
take into account your other personal and Business commitments). In any event,
following your employment with Sovereign, in complying with this paragraph, you
will not be required to act against the reasonable best interests of any new
employer or new business venture in which you are an employee, partner or active
participant. Furthermore, Sovereign will reimburse you for all reasonable
expenses and costs you may incur as a result of providing such assistance,
including travel costs and pre-approved legal fees (which approval will not be
unreasonably withheld), provided Sovereign receives proper documentation with
respect to all such expenses and costs. Following your employment with
Sovereign, you will be entitled to a reasonable hourly fee (which fee will be
mutually determined by Sovereign and you after consideration of your
compensation history) for time spent by you furnishing such cooperation (other
than for time spent by you actually providing testimony in any legal matter),
including, without limitation, for time spent travelling in connection with such
cooperation. Such fee will be paid promptly following your submission of a
statement setting forth the number of hours spent by you on such cooperation.
          If you breach this Agreement and Release, in addition to any other
remedies available, Sovereign will seek restitution and/or offset of any
payments or benefits provided to the extent permitted by law.
          This Agreement and Release does not affect your entitlement to
previously accrued or vested benefits to which you may be entitled under any
Sovereign savings and/or pension plans. Your rights to benefits under any
Sovereign savings and/or pension plan will be determined by law and in
accordance with the terms of the specific plan.

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          Since your execution of this Agreement and Release releases Sovereign
and any Sovereign Entities & Officials from all claims you may have (except as
otherwise set forth above), you should review this carefully before signing it.
You can take at least twenty-one (21) days from your receipt of this Agreement
and Release to consider its meaning and effect and to determine whether you wish
to enter into it. During that time, you are advised to consult with anyone of
your choosing, including an attorney, prior to executing this Agreement and
Release. Any modifications to this Agreement and Release (and the attached
Exhibit A), whether material or immaterial, will not restart the twenty-one
(21) day period.
          Once you have signed this Agreement and Release, you may choose to
revoke your execution within seven (7) days. Any revocation of this Agreement
and Release must be in writing and personally delivered to Thomas J. McAuliffe,
Sovereign Bancorp, Inc., 75 State Street, Boston, Massachusetts 02109, or if
mailed, postmarked within seven (7) days of the date upon which it was signed by
you.
          TO RECEIVE THE PAYMENT AND OTHER BENEFITS DESCRIBED ABOVE, YOU MUST
SIGN (AND HAVE NOTARIZED) AND RETURN THE AGREEMENT AND RELEASE NO LATER THAN
MARCH 10, 2009, AND DELIVER THE ATTACHED LETTER INDICATING THAT YOU HAVE NOT
REVOKED YOUR AGREEMENT NO EARLIER THAN SEVEN (7) DAYS AFTER THE DATE YOU SIGN
THIS AGREEMENT AND RELEASE. YOU MUST ALSO SIGN AND RETURN THE EMPLOYMENT
AGREEMENT ATTACHED HERETO AS EXHIBIT A NO LATER THAN MARCH 10, 2009. This
Agreement and Release should be returned to Thomas J. McAuliffe, Sovereign
Bancorp, Inc., 75 State Street, Boston, Massachusetts 02109. Sovereign will not
make any payments or provide any other benefits pursuant to this Agreement and
Release until after the seven (7) day period expires and Sovereign receives the
attached letter indicating that you have not revoked your agreement.
          If any portion of this Agreement and Release is found to be
unenforceable but such portion would be enforceable if some part thereof were
deleted or modified, then such portion will apply with such deletion or
modification as is necessary to make it enforceable to the fullest extent
permitted by law. If any such portion cannot be modified to be enforceable, such
portion will be deemed severed from this Agreement and Release and will not
affect the validity or enforceability of the remainder of this Agreement and
Release.
          This Agreement and Release will be null and void if you do not sign
and return the employment agreement attached hereto as Exhibit A within the
applicable time period.
[THIS SPACE INTENTIONALLY LEFT BLANK]

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          This Agreement and Release (including Exhibit A) contains the entire
understanding of the parties relating to the subject matter hereof. You
acknowledge that no representations, oral or written, have been made other than
those expressly set forth herein, and that you have not relied on any other
representations in executing this Agreement and Release. This Agreement and
Release may be modified only in a document signed by the parties and referring
specifically hereto.
          If you have any questions, please contact Tom Stypulkoski at
(610) 526-6340.
Sincerely yours,
Sovereign Bancorp, Inc.
-s- Thomas J. McAuliffe [w73220w7322001.gif]
Thomas J. McAuliffe
Executive Vice President and
Managing Director of Human Resources

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ACKNOWLEDGEMENT
          I AGREE TO THE TERMS AND CONDITIONS SPECIFIED IN THIS AGREEMENT AND
RELEASE AND I INTEND TO WAIVE AND RELEASE ALL CLAIMS THAT I MAY HAVE AGAINST
SOVEREIGN AND ANY SOVEREIGN ENTITIES & OFFICIALS. I UNDERSTAND THAT THIS WAIVER
AND RELEASE CREATES A TOTAL AND UNLIMITED RELEASE OF ALL CLAIMS, WHETHER KNOWN
OR UNKNOWN, EXISTING AS OF THIS DATE THAT I MAY HAVE AGAINST SOVEREIGN AND ANY
SOVEREIGN ENTITIES & OFFICIALS, EXCEPT AS OTHERWISE SET FORTH ABOVE.
          I HAVE HAD AMPLE TIME TO REVIEW THIS AGREEMENT AND TO CONSIDER MY
GENERAL RELEASE OF ALL CLAIMS AS SET FORTH IN THIS AGREEMENT AND RELEASE. I AM
SIGNING THIS AGREEMENT AND RELEASE KNOWINGLY, VOLUNTARILY AND WITH FULL
UNDERSTANDING OF ITS TERMS AND EFFECTS. I UNDERSTAND THAT I CAN TAKE AT LEAST
TWENTY-ONE (21) DAYS FROM RECEIPT OF THIS AGREEMENT AND RELEASE TO DETERMINE
WHETHER I WISH TO SIGN IT, THAT I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
PRIOR TO SIGNING IT, AND THAT I HAVE SEVEN (7) DAYS FROM THE DATE I SIGN THIS
AGREEMENT AND RELEASE TO REVOKE IT.
          I ACKNOWLEDGE THAT I HAVE NOT RELIED ON ANY REPRESENTATIONS OR
STATEMENTS NOT SET FORTH HEREIN. I WILL NOT DISCLOSE THIS AGREEMENT AND RELEASE
TO ANYONE EXCEPT TO MY IMMEDIATE FAMILY AND ANY TAX, LEGAL OR OTHER COUNSEL THAT
I HAVE CONSULTED REGARDING THE MEANING OR EFFECT OF THIS AGREEMENT, EXCEPT AS
OTHERWISE REQUIRED BY LAW OR LEGAL PROCESS, OR UNLESS THE AGREEMENT AND RELEASE
HAS ENTERED THE PUBLIC DOMAIN DUE TO A DISCLOSURE BY ANY SOVEREIGN ENTITIES OR
OFFICIALS.
          In witness hereof, I have executed this Agreement and General Release
this 12th  day of February, 2009.

         
/s/ Kirk Walters
 
       
Kirk Walters
       
 
       
STATE OF MASSACHUSETTS     )
       
:
  ss.:    
COUNTY OF SUFFOLK                 )
       

          On this 13th  day of February, 2009, before me, a Notary Public of the
State of Massachusetts, personally appeared KIRK WALTERS, to me known and known
to me to be the person described and who executed the foregoing Agreement and
General Release and did then and there acknowledge to me that s/he voluntarily
executed the same.

         
 
  /s/ Brenda L . Page    
 
 
 
Notary Public    

(SEAL) [w73220w7322002.gif]
YOU MUST RETURN THE ENTIRE AGREEMENT AND GENERAL RELEASE
(INCLUDING THE ACKNOWLEDGMENT PAGE).

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(SOVEREIGN BANCORP LOGO) [w73220w7322000.gif]
EXHIBIT A
February 11, 2009               
Kirk Walters
c/o Sovereign Bancorp, Inc.
Dear Kirk:
     It is with great pleasure that we extend an offer setting forth the
following terms for your continued employment with Sovereign Bancorp, Inc.
(and/or its related entities, defined as “Sovereign”):

     
Title/Function:
  Chief Financial Officer & Non Core Assets, reporting directly to the Chief
Executive Officer. Notwithstanding the foregoing, during your employment with
Sovereign, Sovereign reserves the right, in its sole discretion, to modify your
title, function, responsibilities and reporting relationships. You agree to use
your best efforts, skill and ability to perform your duties and
responsibilities, and to devote all of your business time and energy to the
performance of your duties and responsibilities hereunder.
 
   
Work Location:
  Your initial work location will be at the offices of Sovereign located in
Boston, Massachusetts. You will be required, however, to travel to other
locations based on business necessity.
 
   
Compensation:
  For calendar year 2009 (“2009”), your salary will be paid at the rate of
$600,000 per annum (less applicable deductions and withholdings), payable in
accordance with Sovereign’s regular payroll practices.
 
   
 
  In addition, for 2009, you will be eligible to receive a discretionary bonus,
payable in accordance with Sovereign policy with respect to the payment of
bonuses (as amended from time to time). The amount of the discretionary bonus,
if any, will be determined by Sovereign in its sole discretion based on, among
other things, your performance and the performance of Sovereign. Your
discretionary bonus for 2009 will be in a target amount of $650,000

 

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  (“Discretionary Target Bonus”). Notwithstanding the foregoing, all bonus
payments for 2009, if any, will be made no later than March 15, 2010. In order
to receive the Discretionary Target Bonus, if any, you must be in an “active
working status” at the time of bonus payment (except as otherwise set forth
below in the “Termination Other Than for Cause” paragraph).
 
   
 
  Subsequent to 2009, if you are still employed by Sovereign and in “active
working status” at the time of bonus payments for 2010 or subsequent years,
Sovereign, in its sole discretion, may (but is not obligated to) pay a
discretionary bonus to you for 2010 or subsequent years. The amount of any
discretionary bonus, if any, may vary from year to year. Discretionary bonuses
payable after 2009, if any, and will be payable in accordance with Sovereign
policy with respect to the payment of bonuses, as amended from time to time.
 
   
 
  If Sovereign’s parent company establishes or maintains a long-term incentive
plan to which executives of Sovereign are eligible to participate, you will be
recommended for approval to participate in such plan, if any, in accordance with
the terms and conditions of any such plan.
 
   
 
  For purposes of this letter, “active working status” means that you have not
resigned (or given notice of your intention to resign) and have not been
terminated (or been given notice of your termination).
 
   
Expenses:
  Sovereign will reimburse you for all reasonable business expenses actually
incurred by you in connection with the performance of your duties hereunder, in
accordance with policies established by Sovereign from time to time and subject
to receipt by Sovereign of appropriate documentation.
 
   
Compliance With
Policies And Procedures:
 
You agree to continue to be bound by and to comply fully with all policies and
procedures for employees, including but not limited to, all terms and conditions
set forth in any employee handbook, compliance manual and any other memoranda
and communications pertaining to policies, procedures, rules and regulations, as
currently in effect and as may be amended or established from time to time.
These policies and procedures include, among other things and without
limitation, your obligations to comply with Sovereign’s rules regarding
confidential and proprietary information, trade secrets and intellectual
property. Failure to comply with all such policies and

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  procedures shall be grounds for disciplinary action by Sovereign, up to and
including termination.
 
   
Termination Other Than
for Cause:
 
If your employment is terminated by Sovereign other than for cause prior to the
date that Sovereign makes its regular payment of 2009 bonuses to its employees,
you will receive (less applicable deductions and withholdings): (i) any salary
that has been earned but unpaid up to the date of your termination; and (ii) a
pro-rated portion of the Discretionary Target Bonus amount of $650,000, based on
the number of full months that you worked for Sovereign in 2009, which will be
payable in accordance with Sovereign policy with respect to the payment of
bonuses. You will not receive any additional payments other than those set forth
above in this paragraph (whether a discretionary or guaranteed bonus, any
additional salary, severance, or otherwise) whatsoever.
 
   
 
  Notwithstanding the foregoing, if your employment is terminated by Sovereign
other than for cause at any time, you will receive continued coverage under
Sovereign’s group health insurance plan (without charging you premium
co-payments) for three (3) years following the last day of your employment.
Notwithstanding the foregoing, nothing in this paragraph is intended to alter
the at will status of your employment or extend the term of this agreement.
 
   
Resignation/Termination
for Cause:
 
In the event that you resign or your employment is terminated by Sovereign for
cause, you will not be entitled to any bonus (discretionary, guaranteed or
otherwise), any severance or any termination payments referred to in the above
paragraph (other than any Discretionary Target Bonus already paid to you as of
the date of your resignation or termination), except that you will be entitled
to salary earned prior to your resignation or termination.
 
   
 
  Notwithstanding the foregoing, in the event that you resign, Sovereign will
provide you with continued coverage under Sovereign’s group health insurance
plan (without charging you premium co-payments) for three (3) years following
the last day of your employment. If you are terminated for cause, however, you
will not receive such continued coverage. Notwithstanding the foregoing, nothing
in this paragraph is intended to alter the at will status of your employment or
extend the term of this agreement.
 
   
 
  For purposes hereof, “cause” shall mean that: (i) you committed an act
constituting a misdemeanor involving moral turpitude, fraud or misrepresentation
or a felony under the laws of the United States or any state or political
subdivision thereof; (ii) you violated laws,

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  rules or regulations applicable to banks, investment banks, broker-dealers,
investment advisors or the banking, commodities, futures or securities
industries generally; (iii) you committed an act constituting a breach of
fiduciary duty, gross negligence or willful misconduct; (iv) you engaged in
conduct that violated Sovereign’s internal policies or procedures and which is
detrimental to the business, reputation, character or standing of Sovereign or
any of its related entities; (v) you committed an act of fraud, dishonesty or
misrepresentation that is detrimental to the business, reputation, character or
standing of Sovereign or any of its related entities; (vi) you engaged in a
conflict of interest or self-dealing; or (vii) after notice by Sovereign and a
reasonable opportunity to cure, you materially breached your obligations as set
forth in this agreement or you failed to perform your duties as an employee of
Sovereign.
 
   
Confidential Information:
  In addition to any other applicable policies regarding Sovereign’s
confidential or proprietary information, you agree that during and at any time
after your employment with Sovereign, you will keep in confidence and will not,
except as specifically authorized in writing by Sovereign or as otherwise
required by law, disclose to any third party or use for the benefit of any third
party or yourself any confidential or proprietary information about Sovereign
(or its related entities) which you acquired, developed or created by reason of
your employment, except for information that is or becomes public other than
through your breach of this paragraph.
 
   
 
  You agree not to disclose the terms of this agreement to anyone except your
immediate family and your tax advisors or legal counsel, except as otherwise
required by law. You further agree to instruct your immediate family and any tax
advisors or legal counsel not to disclose this agreement, except as otherwise
required by law.
 
   
 
  You further agree to deliver promptly to Sovereign upon the termination of
your employment for any reason or at any other time upon the request of
Sovereign all documents, materials and computer media in any form (and all
copies thereof) and all other property of Sovereign (or its related entities).
 
   
Notice Period:
  In the event that you resign from Sovereign, you agree to provide Sovereign
with 30 days notice of your resignation. Sovereign reserves the right, in its
sole discretion, to designate this period as either a paid working or
non-working notice period, or to reduce or waive the notice period, in whole or
in part.

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Restrictive Covenants:
  In consideration of your continued employment, you agree that beginning on the
date that you execute this agreement and continuing through 12 months after the
last date of your employment, you will not directly or indirectly solicit or
induce, or cause others to solicit or induce, any person who is employed or
engaged by Sovereign (or its related entities) (or any person who was employed
or engaged by Sovereign or its related entities within the last 12 months of
your employment) to terminate his or her employment or engagement with Sovereign
(or its related entities) or to accept employment with anyone or any entity
other than Sovereign (or its related entities). This restrictive covenant will
apply in full force and effect even in the event that you resign from or are
terminated, with or without cause as defined above, by Sovereign.
 
   
Benefits:
  You will continue to be eligible to participate in Sovereign’s benefits plans
(e.g., health, dental, life and disability) and like benefits (e.g., parking,
car allowance, club dues) in which you are currently participating and/or in
which other senior management of Sovereign generally are eligible to participate
from time to time, subject to their exclusions and limitations, as such plans
and benefits may be amended, terminated or replaced by Sovereign from time to
time in its sole discretion (provided that Sovereign will provide prior notice
where required by the applicable plan documents).
 
   
Temporary Housing:
  Sovereign will pay for the cost of temporary housing in the Greater Boston
Metropolitan Area for you in a two-bedroom furnished apartment at Devonshire (or
comparable arrangement) up to the later of (i) December 31, 2010 or (ii) the
date that you relocate your family to a residence in Boston, provided that you
remain an active employee of Sovereign. If you choose to relocate your family
permanently to Boston, you will be eligible for relocation assistance in
accordance with Sovereign’s policies (except that any condition in such policies
that you must relocate within 12 months of hire will not apply). Sovereign will
provide you with “tax assistance” (within the meaning of Sovereign’s Executive
Relocation Policy) with respect to relocation benefits that constitute taxable
income and are eligible for such “tax assistance” as provided for in its
relocation policies for so long as Sovereign is providing you such temporary
housing. In addition, regardless of whether you relocate, Sovereign will provide
to you a one-time “Miscellaneous Expense Allowance” in accordance with
Sovereign’s relocation policies (except that any condition in such policies that
you must relocate within 12 months of hire will not apply), which will be
payable prior to December 31, 2009. Notwithstanding the foregoing, nothing in
this paragraph is

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  intended to alter the at will status of your employment or extend the term of
this agreement.
 
   
No Mitigation:
  You shall not be required to seek other employment or to reduce any benefit
payable to you hereunder, and no benefit shall be reduced by any compensation
received by you from other employment.
 
   
Modification:
  This agreement contains the entire understanding of the parties regarding the
subject matter hereof and no terms may be modified except by a document signed
by the parties and referring explicitly hereto. You acknowledge that you have
not relied on any oral or written representations or understandings not
explicitly contained herein in executing this agreement.
 
   
Governing Law:
  This agreement will be governed by and construed in accordance with the laws
of the State of Massachusetts (without regard to its conflicts of law
principles). If any portion of this agreement is found to be unenforceable but
such portion would be enforceable if some part thereof were deleted or modified,
then such portion will apply with such deletion or modification as is necessary
to make it enforceable to the fullest extent permitted by law. If any such
portion cannot be modified to be enforceable, such portion will be deemed
severed from this agreement and will not affect the validity or enforceability
of the remainder of this agreement.

     Nothing in this agreement is intended to create a fixed term of employment
at Sovereign. Your employment at Sovereign is on an at will basis, meaning that
Sovereign will be free to terminate your employment at any time, with or without
cause, and that you will be free to resign from your employment with Sovereign
at any time.
     If you accept this offer, please sign and date this letter in the space
provided below and, by no later than March 10, 2009, return a copy to me at
Sovereign Bancorp, Inc., 75 State Street, Boston, Massachusetts 02109.
Sincerely yours,
Sovereign Bancorp, Inc.
-s- Thomas J. McAuliffe [w73220w7322004.gif]
Thomas J. McAuliffe
Executive Vice President and Managing Director of Human Resources

                     
Accepted:
     /s/ Kirk Walters
 
 Kirk Walters       Date:   2/12/09
 
   

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