EXHIBIT 10.3

BB&T

ADDENDUM TO PROMISSORY NOTE

THIS ADDENDUM TO PROMISSORY NOTE (“Addendum”) is hereby made a part of the
Promissory Note dated June 25, 2008, from 1st FINANCIAL SERVICES CORPORATION
(“Borrower”) payable to the order of Branch Banking and Trust Company (“Bank”)
in the principal amount of $10,000,000.00 (including all renewals, extensions,
modifications and substitutions thereof, the “Note”).

 

I. DEFINITIONS.

1.1 Adjusted LIBOR Rate means a rate of interest per annum equal to the sum
obtained (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by
adding (i) the One Month LIBOR plus (ii) One and one-half percent (1.50%) per
annum, which shall be adjusted monthly on the first day of each month for each
LIBOR Interest Period. If the first day of any month falls on a date when the
Bank is closed, the Adjusted LIBOR Rate shall be determined as of the last
preceding business day. The Adjusted LIBOR Rate shall be adjusted for any change
in the LIBOR Reserve Percentage so that Bank shall receive the same yield. If
checked here ¨ the interest rate will not exceed a(n) ¨ fixed ¨ average maximum
rate of             % and will not decrease below a minimum rate of
            %. If an average maximum rate is specified, a determination of the
average interest rate assessed and a reimbursement by Bank of interest paid in
excess of the maximum rate, if any, will be made on             . If the loan
has been repaid prior to this date, no reimbursement will be made.

1.2 One Month LIBOR means the average rate (rounded upward, if necessary, to the
next higher 1/100th of 1.0%) quoted on Bloomberg Screen BBAMI or Page 3750 (or
such replacement page) of the Telerate Service on the determination date for
deposits in U. S. Dollars offered in the London interbank market for one month,
or if the above method for determining LIBOR shall not be available, the rate
quoted in The Wall Street Journal, a rate determined by a substitute method of
determination agreed on by Borrower and Bank; provided, if such agreement is not
reached within a reasonable period of time (in Bank’s sole judgment), a rate
reasonably determined by Bank in its sole discretion as a rate being paid, as of
the determination date, by first class banking organizations (as determined by
Bank) in the London interbank market for U. S. Dollar deposits.

1.3 LIBOR Advance means the term loan advances made by Bank to Borrower
evidenced by this Note upon which the Adjusted LIBOR Rate of interest shall
apply.

1.4 LIBOR Interest Period means a period of one calendar month as may be elected
by the Borrower applicable to any LIBOR Advance which shall begin on first day
of any month notwithstanding the maturity date of this Note; provided, however,
that a LIBOR Interest Period may be less than one calendar month in and only in
the calendar month in which the Note originates or matures.

1.5 LIBOR Reserve Percentage means the maximum aggregate rate at which reserves
(including, without limitation, any marginal supplemental or emergency reserves)
are required to be maintained under Regulation D by member banks of the Federal
Reserve System with respect to dollar funding in the London interbank market.
Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall
reflect any other reserves required to be maintained by such member banks by
reason of any applicable regulatory change against (i) any category of liability
which includes deposits by reference to which the Adjusted LIBOR Rate is to be
determined or (ii) any category of extensions of credit or other assets related
to LIBOR.

1.6 Standard Rate means, for any day, a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1.0%) equal to the Bank’s announced
Prime Rate minus             % per annum, and each change in the Standard Rate
shall be effective on the date any change in the Prime Rate is publicly
announced as being effective.

 

II. LOAN BEARING ADJUSTED LIBOR RATE

2.1 Application of Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall apply to
the entire principal balance outstanding of a LIBOR Advance for any LIBOR
Interest Period.

2.2 Adjusted LIBOR Based Rate Protections.

(a) Inability to Determine Rate. In the event that Bank shall have determined,
which determination shall be final, conclusive and binding, that by reason of
circumstances occurring after the date of this Note affecting the London
interbank market, adequate and fair means do not exist for ascertaining the
LIBOR on the basis provided for in this Note, Bank shall give notice (by
telephone confirmed in writing or by telecopy) to Borrower of such
determination, whereupon (i) no LIBOR Advance shall be made until Bank notifies
Borrower that the circumstances giving rise to such notice no longer exist, and
(ii) any request by Borrower for a LIBOR Advance shall be deemed to be a request
for an advance at the Standard Rate.

 

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(b) Illegality; Impracticability. In the event that Bank shall determine, which
determination shall be final, conclusive and binding, that the making,
maintaining or continuance of any portion of a LIBOR Advance (i) has become
unlawful as a result of compliance by Bank with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any of the same not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause Bank material
hardship, as a result of contingencies occurring after the date of this Note
materially and adversely affect the London interbank market or Bank’s ability to
make LIBOR Advances generally, then, and in any such event, Bank shall give
notice (by telephone confirmed in writing or by telecopy) to Borrower of such
determination. Thereafter, (x) the obligation of Bank to make any LIBOR Advances
or to convert any portion of the loan to a LIBOR Advance shall be suspended
until such notice shall be withdrawn by Bank, and (y) any request by Borrower
for a LIBOR Advance shall be deemed to be a request for an advance at the
Standard Rate.

 

    1st FINANCIAL SERVICES CORPORATION WITNESS:     Name of Corporation

/s/ Clegg E. Sell, Jr.

    By:  

/s/ Gregory Gibson

  (SEAL)     Name:   GREG GIBSON       Title:   CHIEF EXECUTIVE OFFICER  

 

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