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                                                                    EXHIBIT 10.2




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                                  EXHIBIT 10.2


                               GUARANTEE AGREEMENT


                           COMMUNITY BANCSHARES, INC.


                           DATED AS OF MARCH 23, 2000



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                                Table of Contents

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ARTICLE I
DEFINITIONS AND INTERPRETATION

   SECTION 1.1  Definitions and Interpretation................................................1

ARTICLE II
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

   SECTION 2.1  Powers and Duties of the Guarantee Trustee....................................4
   SECTION 2.2  Certain Rights of Guarantee Trustee...........................................5
   SECTION 2.3  Not Responsible for Recitals or Issuance of Guarantee.........................7
   SECTION 2.4  Events of Default; Waiver.....................................................7
   SECTION 2.5  Events of Default; Notice.....................................................8

ARTICLE III
GUARANTEE TRUSTEE

   SECTION 3.1  Guarantee Trustee; Eligibility................................................8
   SECTION 3.2  Appointment, Removal and Resignation of Guarantee Trustee.....................9

ARTICLE IV
GUARANTEE

   SECTION 4.1  Guarantee.....................................................................9
   SECTION 4.2  Waiver of Notice and Demand..................................................10
   SECTION 4.3  Obligations Not Affected.....................................................10
   SECTION 4.4  Rights of Holders............................................................11
   SECTION 4.5  Guarantee of Payment.........................................................11
   SECTION 4.6  Subrogation..................................................................11
   SECTION 4.7  Independent Obligations......................................................12
   SECTION 4.8  Enforcement by a Beneficiary.................................................12

ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION

   SECTION 5.1  Limitation of Transactions...................................................12
   SECTION 5.2  Ranking......................................................................13

ARTICLE VI
TERMINATION

   SECTION 6.1  Termination..................................................................13

ARTICLE VII
INDEMNIFICATION

   SECTION 7.1  Exculpation..................................................................13
   SECTION 7.2  Indemnification..............................................................14
   SECTION 7.3  Compensation; Reimbursement of Expenses......................................15
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<TABLE>
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ARTICLE VIII
MISCELLANEOUS

   SECTION 8.1  Successors and Assigns.......................................................15
   SECTION 8.2  Amendments...................................................................16
   SECTION 8.3  Notices......................................................................16
   SECTION 8.4  Benefit......................................................................16
   SECTION 8.5  Governing Law................................................................17
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GUARANTEE AGREEMENT

                  This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March
23, 2000, is executed and delivered by Community Bancshares, Inc., a bank
holding company incorporated in Delaware (the "Guarantor"), and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Capital Securities (as defined herein)
of Community (AL) Capital Trust I, a Delaware statutory business trust (the
"Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 23, 2000, among the trustees named
therein of the Issuer, Community Bancshares, Inc., as sponsor, and the holders
from time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof securities, having an aggregate
liquidation amount of up to $10,000,000, designated the Fixed Rate Capital Trust
Pass-through Securities(R) (the "Capital Securities");

                  WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of Capital
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
for the benefit of the Holders.

ARTICLE I
DEFINITIONS AND INTERPRETATION

SECTION 1.1       Definitions and Interpretation

                  In this Guarantee, unless the context otherwise requires:

                  (a)      capitalized terms used in this Guarantee but not
         defined in the preamble above have the respective meanings assigned to
         them in this Section 1.1;

                  (b)      a term defined anywhere in this Guarantee has the
         same meaning throughout;

                  (c)      all references to "the Guarantee" or "this Guarantee"
         are to this Guarantee as modified, supplemented or amended from time to
         time;

                  (d)      all references in this Guarantee to Articles and
         Sections are to Articles and Sections of this Guarantee, unless
         otherwise specified;

                  (e)      terms defined in the Declaration as at the date of
         execution of this Guarantee have the same meanings when used in this
         Guarantee, unless otherwise defined in this Guarantee or unless the
         context otherwise requires; and

                  (f)      a reference to the singular includes the plural and
         vice versa.


                                        1

<PAGE>   5
                  "Beneficiaries" means any Person to whom the Trust is or
hereafter becomes indebted or liable.

                  "Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at 101 Barclay Street, Floor
21W, New York, NY 10286.

                  "Covered Person" means any Holder of Capital Securities.

                  "Debentures" means the junior subordinated debentures of
Community Bancshares, Inc., designated the 10 7/8% Junior Subordinated
Deferrable Interest Debentures due 2030, held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.

                  "Declaration Event of Default" means an "Event of Default" as
defined in the Declaration.

                  "Event of Default" has the meaning set forth in Section
2.4.

                  "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Capital Securities to the extent the Issuer shall have funds available
therefor, (ii) the Redemption Price (as defined in the Indenture) to the extent
the Issuer has funds available therefor, with respect to any Capital Securities
called for redemption by the Issuer, (iii) the Special Redemption Price (as
defined in the Indenture) to the extent the Issuer has funds available therefor,
with respect to Capital Securities redeemed upon the occurrence of a Special
Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").

                  "Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

                  "Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.

                  "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.


                                        2

<PAGE>   6
                  "Indenture" means the Indenture dated as of March 23, 2000,
between the Guarantor and The Bank of New York, not in its individual capacity
but solely as trustee, and any indenture supplemental thereto pursuant to which
the Debentures are to be issued to the Institutional Trustee of the Issuer.

                  "Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.

                  "Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as a class,
but separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.

                  "Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Trust, other than obligations
of the Trust to pay to holders of any Trust Securities the amounts due such
holders pursuant to the terms of the Trust Securities.

                  "Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:

                  (a)      a statement that each officer signing the Officer's
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b)      a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officer's Certificate;

                  (c)      a statement that each such officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (d)      a statement as to whether, in the opinion of each
         such officer, such condition or covenant has been complied with.

                  "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

                  "Redemption Price" has the meaning set forth in the
definition of "Guarantee Payments" herein.

                  "Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above


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<PAGE>   7
designated officers and also, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

                  "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
3.1.

                  "Trust Securities" means the Common Securities and the Capital
Securities.

ARTICLE II
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

SECTION  2.1      Powers and Duties of the Guarantee Trustee

                  (a)      This Guarantee shall be held by the Guarantee Trustee
         for the benefit of the Holders of the Capital Securities, and the
         Guarantee Trustee shall not transfer this Guarantee to any Person
         except a Holder of Capital Securities exercising his or her rights
         pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on
         acceptance by such Successor Guarantee Trustee of its appointment to
         act as Successor Guarantee Trustee. The right, title and interest of
         the Guarantee Trustee shall automatically vest in any Successor
         Guarantee Trustee, and such vesting and cessation of title shall be
         effective whether or not conveyancing documents have been executed and
         delivered pursuant to the appointment of such Successor Guarantee
         Trustee.

                  (b)      If an Event of Default actually known to a
         Responsible Officer of the Guarantee Trustee has occurred and is
         continuing, the Guarantee Trustee shall enforce this Guarantee for the
         benefit of the Holders of the Capital Securities.

                  (c)      The Guarantee Trustee, before the occurrence of any
         Event of Default and after curing all Events of Default that may have
         occurred, shall undertake to perform only such duties as are
         specifically set forth in this Guarantee, and no implied covenants
         shall be read into this Guarantee against the Guarantee Trustee. In
         case an Event of Default has occurred (that has not been cured or
         waived pursuant to Section 2.4) and is actually known to a Responsible
         Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise
         such of the rights and powers vested in it by this Guarantee, and use
         the same degree of care and skill in its exercise thereof, as a prudent
         person would exercise or use under the circumstances in the conduct of
         his or her own affairs.

                  (d)      No provision of this Guarantee shall be construed to
         relieve the Guarantee Trustee from liability for its own negligent
         action, its own negligent failure to act, or its own willful
         misconduct, except that:

                           (i)      prior to the occurrence of any Event of
                  Default and after the curing or waiving of all such Events of
                  Default that may have occurred:


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<PAGE>   8

                                    (A)      the duties and obligations of the
                           Guarantee Trustee shall be determined solely by the
                           express provisions of this Guarantee, and the
                           Guarantee Trustee shall not be liable except for the
                           performance of such duties and obligations as are
                           specifically set forth in this Guarantee, and no
                           implied covenants or obligations shall be read into
                           this Guarantee against the Guarantee Trustee; and

                                    (B)      in the absence of bad faith on the
                           part of the Guarantee Trustee, the Guarantee Trustee
                           may conclusively rely, as to the truth of the
                           statements and the correctness of the opinions
                           expressed therein, upon any certificates or opinions
                           furnished to the Guarantee Trustee and conforming to
                           the requirements of this Guarantee; but in the case
                           of any such certificates or opinions furnished to the
                           Guarantee Trustee, the Guarantee Trustee shall be
                           under a duty to examine the same to determine whether
                           or not they conform to the requirements of this
                           Guarantee;

                           (ii)     the Guarantee Trustee shall not be liable
                  for any error of judgment made in good faith by a Responsible
                  Officer of the Guarantee Trustee, unless it shall be proved
                  that such Responsible Officer of the Guarantee Trustee or the
                  Guarantee Trustee was negligent in ascertaining the pertinent
                  facts upon which such judgment was made;

                           (iii)    the Guarantee Trustee shall not be liable
                  with respect to any action taken or omitted to be taken by it
                  in good faith in accordance with the direction of the Holders
                  of not less than a Majority in liquidation amount of the
                  Capital Securities relating to the time, method and place of
                  conducting any proceeding for any remedy available to the
                  Guarantee Trustee, or exercising any trust or power conferred
                  upon the Guarantee Trustee under this Guarantee; and

                           (iv)     no provision of this Guarantee shall require
                  the Guarantee Trustee to expend or risk its own funds or
                  otherwise incur personal financial liability in the
                  performance of any of its duties or in the exercise of any of
                  its rights or powers, if the Guarantee Trustee shall have
                  reasonable grounds for believing that the repayment of such
                  funds is not reasonably assured to it under the terms of this
                  Guarantee, or security and indemnity, reasonably satisfactory
                  to the Guarantee Trustee, against such risk or liability is
                  not reasonably assured to it.

SECTION 2.2       Certain Rights of Guarantee Trustee

                  (a)      Subject to the provisions of Section 2.1:

                           (i)      The Guarantee Trustee may conclusively rely,
                  and shall be fully protected in acting or refraining from
                  acting upon, any resolution, certificate, statement,
                  instrument, opinion, report, notice, request, direction,
                  consent, order, bond, debenture, note, other evidence of
                  indebtedness or other paper or document believed by it to be
                  genuine and to have been signed, sent or presented by the
                  proper party or parties.


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<PAGE>   9

                           (ii)     Any direction or act of the Guarantor
                  contemplated by this Guarantee shall be sufficiently evidenced
                  by an Officer's Certificate.

                           (iii)    Whenever, in the administration of this
                  Guarantee, the Guarantee Trustee shall deem it desirable that
                  a matter be proved or established before taking, suffering or
                  omitting any action hereunder, the Guarantee Trustee (unless
                  other evidence is herein specifically prescribed) may, in the
                  absence of bad faith on its part, request and conclusively
                  rely upon an Officer's Certificate of the Guarantor which,
                  upon receipt of such request, shall be promptly delivered by
                  the Guarantor.

                           (iv)     The Guarantee Trustee shall have no duty to
                  see to any recording, filing or registration of any instrument
                  (or any rerecording, refiling or registration thereof).

                           (v)      The Guarantee Trustee may consult with
                  counsel of its selection, and the advice or opinion of such
                  counsel with respect to legal matters shall be full and
                  complete authorization and protection in respect of any action
                  taken, suffered or omitted by it hereunder in good faith and
                  in accordance with such advice or opinion. Such counsel may be
                  counsel to the Guarantor or any of its Affiliates and may
                  include any of its employees. The Guarantee Trustee shall have
                  the right at any time to seek instructions concerning the
                  administration of this Guarantee from any court of competent
                  jurisdiction.

                           (vi)     The Guarantee Trustee shall be under no
                  obligation to exercise any of the rights or powers vested in
                  it by this Guarantee at the request or direction of any
                  Holder, unless such Holder shall have provided to the
                  Guarantee Trustee such security and indemnity, reasonably
                  satisfactory to the Guarantee Trustee, against the costs,
                  expenses (including attorneys' fees and expenses and the
                  expenses of the Guarantee Trustee's agents, nominees or
                  custodians) and liabilities that might be incurred by it in
                  complying with such request or direction, including such
                  reasonable advances as may be requested by the Guarantee
                  Trustee; provided, however, that nothing contained in this
                  Section 2.2(a)(vi) shall be taken to relieve the Guarantee
                  Trustee, upon the occurrence of an Event of Default, of its
                  obligation to exercise the rights and powers vested in it by
                  this Guarantee.

                           (vii)    The Guarantee Trustee shall not be bound to
                  make any investigation into the facts or matters stated in any
                  resolution, certificate, statement, instrument, opinion,
                  report, notice, request, direction, consent, order, bond,
                  debenture, note, other evidence of indebtedness or other paper
                  or document, but the Guarantee Trustee, in its discretion, may
                  make such further inquiry or investigation into such facts or
                  matters as it may see fit.

                           (viii)   The Guarantee Trustee may execute any of the
                  trusts or powers hereunder or perform any duties hereunder
                  either directly or by or through agents, nominees, custodians
                  or attorneys, and the Guarantee Trustee shall not be
                  responsible for any misconduct or negligence on the part of
                  any agent or attorney appointed with due care by it hereunder.


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<PAGE>   10
                           (ix)     Any action taken by the Guarantee Trustee or
                  its agents hereunder shall bind the Holders of the Capital
                  Securities, and the signature of the Guarantee Trustee or its
                  agents alone shall be sufficient and effective to perform any
                  such action. No third party shall be required to inquire as to
                  the authority of the Guarantee Trustee to so act or as to its
                  compliance with any of the terms and provisions of this
                  Guarantee, both of which shall be conclusively evidenced by
                  the Guarantee Trustee's or its agent's taking such action.

                           (x)      Whenever in the administration of this
                  Guarantee the Guarantee Trustee shall deem it desirable to
                  receive instructions with respect to enforcing any remedy or
                  right or taking any other action hereunder, the Guarantee
                  Trustee (A) may request instructions from the Holders of a
                  Majority in liquidation amount of the Capital Securities, (B)
                  may refrain from enforcing such remedy or right or taking such
                  other action until such instructions are received, and (C)
                  shall be protected in conclusively relying on or acting in
                  accordance with such instructions.

                           (xi)     The Guarantee Trustee shall not be liable
                  for any action taken, suffered, or omitted to be taken by it
                  in good faith and reasonably believed by it to be authorized
                  or within the discretion or rights or powers conferred upon it
                  by this Guarantee.

                  (b)      No provision of this Guarantee shall be deemed to
         impose any duty or obligation on the Guarantee Trustee to perform any
         act or acts or exercise any right, power, duty or obligation conferred
         or imposed on it, in any jurisdiction in which it shall be illegal or
         in which the Guarantee Trustee shall be unqualified or incompetent in
         accordance with applicable law to perform any such act or acts or to
         exercise any such right, power, duty or obligation. No permissive power
         or authority available to the Guarantee Trustee shall be construed to
         be a duty.

SECTION 2.3       Not Responsible for Recitals or Issuance of Guarantee

                  The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.

SECTION 2.4       Events of Default; Waiver

                  (a)      An Event of Default under this Guarantee will occur
upon the failure of the Guarantor to perform any of its payment or other
obligations hereunder.

                  (b)      The Holders of a Majority in liquidation amount of
Capital Securities may, voting or consenting as a class, on behalf of the
Holders of all of the Capital Securities, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.


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<PAGE>   11

SECTION 2.5       Events of Default; Notice

                  (a)      The Guarantee Trustee shall, within 90 days after the
         occurrence of an Event of Default, transmit by mail, first class
         postage prepaid, to the Holders of the Capital Securities, notices of
         all Events of Default actually known to a Responsible Officer of the
         Guarantee Trustee, unless such defaults have been cured before the
         giving of such notice, provided, however, that the Guarantee Trustee
         shall be protected in withholding such notice if and so long as a
         Responsible Officer of the Guarantee Trustee in good faith determines
         that the withholding of such notice is in the interests of the Holders
         of the Capital Securities.

                  (b)      The Guarantee Trustee shall not be deemed to have
         knowledge of any Event of Default unless the Guarantee Trustee shall
         have received written notice from the Guarantor or a Holder of the
         Capital Securities (except in the case of a payment default), or a
         Responsible Officer of the Guarantee Trustee charged with the
         administration of this Guarantee shall have obtained actual knowledge,
         thereof.

ARTICLE III
GUARANTEE TRUSTEE

SECTION 3.1       Guarantee Trustee; Eligibility

                  (a)      There shall at all times be a Guarantee Trustee which
         shall:

                           (i)      not be an Affiliate of the Guarantor; and

                           (ii)     be a corporation organized and doing
                  business under the laws of the United States of America or any
                  State or Territory thereof or of the District of Columbia, or
                  Person authorized under such laws to exercise corporate trust
                  powers, having a combined capital and surplus of at least 50
                  million U.S. dollars ($50,000,000), and subject to supervision
                  or examination by Federal, State, Territorial or District of
                  Columbia authority. If such corporation publishes reports of
                  condition at least annually, pursuant to law or to the
                  requirements of the supervising or examining authority
                  referred to above, then, for the purposes of this Section
                  3.1(a) (ii), the combined capital and surplus of such
                  corporation shall be deemed to be its combined capital and
                  surplus as set forth in its most recent report of condition so
                  published.

                  (b)      If at any time the Guarantee Trustee shall cease to
         be eligible to so act under Section 3.1(a), the Guarantee Trustee shall
         immediately resign in the manner and with the effect set out in Section
         3.2(c).

                  (c)      If the Guarantee Trustee has or shall acquire any
         "conflicting interest" within the meaning of Section 310(b) of the
         Trust Indenture Act, the Guarantee Trustee shall either eliminate such
         interest or resign to the extent and in the manner provided by, and
         subject to this Guarantee.


                                        8

<PAGE>   12
SECTION 3.2       Appointment, Removal and Resignation of Guarantee Trustee

                  (a)      Subject to Section 3.2(b), the Guarantee Trustee may
         be appointed or removed without cause at any time by the Guarantor
         except during an Event of Default.

                  (b)      The Guarantee Trustee shall not be removed in
         accordance with Section 3.2(a) until a Successor Guarantee Trustee has
         been appointed and has accepted such appointment by written instrument
         executed by such Successor Guarantee Trustee and delivered to the
         Guarantor.

                  (c)      The Guarantee Trustee appointed to office shall hold
         office until a Successor Guarantee Trustee shall have been appointed or
         until its removal or resignation. The Guarantee Trustee may resign from
         office (without need for prior or subsequent accounting) by an
         instrument in writing executed by the Guarantee Trustee and delivered
         to the Guarantor, which resignation shall not take effect until a
         Successor Guarantee Trustee has been appointed and has accepted such
         appointment by an instrument in writing executed by such Successor
         Guarantee Trustee and delivered to the Guarantor and the resigning
         Guarantee Trustee.

                  (d)      If no Successor Guarantee Trustee shall have been
         appointed and accepted appointment as provided in this Section 3.2
         within 60 days after delivery of an instrument of removal or
         resignation, the Guarantee Trustee resigning or being removed may
         petition any court of competent jurisdiction for appointment of a
         Successor Guarantee Trustee. Such court may thereupon, after
         prescribing such notice, if any, as it may deem proper, appoint a
         Successor Guarantee Trustee.

                  (e)      No Guarantee Trustee shall be liable for the acts or
         omissions to act of any Successor Guarantee Trustee.

                  (f)      Upon termination of this Guarantee or removal or
         resignation of the Guarantee Trustee pursuant to this Section 3.2, the
         Guarantor shall pay to the Guarantee Trustee all amounts owing to the
         Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of
         such termination, removal or resignation.

ARTICLE IV
GUARANTEE

SECTION 4.1       Guarantee

                  (a)      The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by the Issuer), as and when due, regardless of any
defense (except as defense of payment by the Issuer), right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

                  (b)      The Guarantor hereby also agrees to assume any and
all Obligations of the Trust and in the event any such Obligation is not so
assumed, subject to the terms and conditions


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<PAGE>   13
hereof, the Guarantor hereby irrevocably and unconditionally guarantees to each
Beneficiary the full payment, when and as due, of any and all obligations to
such Beneficiaries. This Agreement is intended to be for the benefit of, and to
be enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.

SECTION 4.2       Waiver of Notice and Demand

                  The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

SECTION 4.3       Obligations Not Affected

                  The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

                  (a)      the release or waiver, by operation of law or
         otherwise, of the performance or observance by the Issuer of any
         express or implied agreement, covenant, term or condition relating to
         the Capital Securities to be performed or observed by the Issuer;

                  (b)      the extension of time for the payment by the Issuer
         of all or any portion of the Distributions, Redemption Price, Special
         Redemption Price, Liquidation Distribution or any other sums payable
         under the terms of the Capital Securities or the extension of time for
         the performance of any other obligation under, arising out of, or in
         connection with, the Capital Securities (other than an extension of
         time for payment of Distributions, Redemption Price, Special Redemption
         Price, Liquidation Distribution or other sum payable that results from
         the extension of any interest payment period on the Debentures or any
         extension of the maturity date of the Debentures permitted by the
         Indenture);

                  (c)      any failure, omission, delay or lack of diligence on
         the part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Capital Securities, or any action on the part of the
         Issuer granting indulgence or extension of any kind;

                  (d)      the voluntary or involuntary liquidation,
         dissolution, sale of any collateral, receivership, insolvency,
         bankruptcy, assignment for the benefit of creditors, reorganization,
         arrangement, composition or readjustment of debt of, or other similar
         proceedings affecting, the Issuer or any of the assets of the Issuer;

                  (e)      any invalidity of, or defect or deficiency in, the
         Capital Securities;

                  (f)      the settlement or compromise of any obligation
         guaranteed hereby or hereby incurred; or

                  (g)      any other circumstance whatsoever that might
         otherwise constitute a legal or


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<PAGE>   14
         equitable discharge or defense of a guarantor, it being the intent of
         this Section 4.3 that the obligations of the Guarantor hereunder shall
         be absolute and unconditional under any and all circumstances.

                  There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 4.4       Rights of Holders

                  (a)      The Holders of a Majority in liquidation amount of
         the Capital Securities have the right to direct the time, method and
         place of conducting any proceeding for any remedy available to the
         Guarantee Trustee in respect of this Guarantee or to direct the
         exercise of any trust or power conferred upon the Guarantee Trustee
         under this Guarantee; provided, however, that (subject to Section 2.1)
         the Guarantee Trustee shall have the right to decline to follow any
         such direction if the Guarantee Trustee shall determine that the
         actions so directed would be unjustly prejudicial to the Holders not
         taking part in such direction or if the Guarantee Trustee being advised
         by counsel determines that the action or proceeding so directed may not
         lawfully be taken or if the Guarantor Trustee in good faith by its
         board of directors or trustees, executive committees or a trust
         committee of directors or trustees and/or Responsible Officers shall
         determine that the action or proceedings so directed would involve the
         Guarantee Trustee in personal liability.

                  (b)      Any Holder of Capital Securities may institute a
         legal proceeding directly against the Guarantor to enforce the
         Guarantee Trustee's rights under this Guarantee, without first
         instituting a legal proceeding against the Issuer, the Guarantee
         Trustee or any other Person. The Guarantor waives any right or remedy
         to require that any such action be brought first against the Issuer,
         the Guarantee Trustee or any other Person before so proceeding directly
         against the Guarantor.

SECTION 4.5       Guarantee of Payment

                  This Guarantee creates a guarantee of payment and not of
collection.



SECTION 4.6       Subrogation

                  The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, after
giving effect to any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.


                                       11

<PAGE>   15
SECTION 4.7       Independent Obligations

                  The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 4.3 hereof.

SECTION 4.8       Enforcement by a Beneficiary

                  A Beneficiary may enforce the obligations of the Guarantor
contained in Section 4.1(b) directly against the Guarantor and the Guarantor
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before preceding against the Guarantor. The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Trust in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Agreement; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, after giving effect to such payment, any amounts are due and
unpaid under this Agreement.


ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1       Limitation of Transactions

                  So long as any Capital Securities remain outstanding, if (a)
there shall have occurred and be continuing an Event of Default or a Declaration
Event of Default or (b) the Guarantor shall have selected an Extension Period as
provided in the Declaration and such period, or any extension thereof, shall be
continuing, then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (y) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Guarantor that rank pari passu in all respects with
or junior in interest to the Debentures (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Guarantor in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to occurrence of the Event of Default
or Declaration Event of Default or the applicable Extension Period, (ii) as a
result of any exchange or conversion of any class or series of the Guarantor's
capital stock (or any capital stock of a subsidiary of the Guarantor) for any
class or series of the Guarantor's capital stock or of any class or series of
the Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration of a
dividend in connection


                                       12

<PAGE>   16
with any stockholder's rights plan, or the issuance of rights, stock or other
property under any stockholder's rights plan, or the redemption or repurchase of
rights pursuant thereto, or (v) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such
stock).

SECTION 5.2       Ranking

                  This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the foregoing provisions of this Guarantee and the other terms set forth
herein.

                  The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.

ARTICLE VI
TERMINATION

SECTION 6.1       Termination

                  This Guarantee shall terminate as to the Capital Securities
(i) upon full payment of the Redemption Price of all Capital Securities, (ii)
upon the distribution of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.

ARTICLE VII
INDEMNIFICATION

SECTION 7.1       Exculpation

                  (a)      No Indemnified Person shall be liable, responsible or
         accountable in damages or otherwise to the Guarantor or any Covered
         Person for any loss, damage or claim incurred by reason of any act or
         omission performed or omitted by such Indemnified Person in good faith
         in accordance with this Guarantee and in a manner that such Indemnified
         Person reasonably believed to be within the scope of the authority
         conferred on such Indemnified Person by this Guarantee or by law,
         except that an Indemnified


                                       13

<PAGE>   17
        Person shall be liable for any such loss, damage or claim incurred by
        reason of such Indemnified Person's negligence or willful misconduct
        with respect to such acts or omissions.

                  (b)      An Indemnified Person shall be fully protected in
         relying in good faith upon the records of the Issuer or the Guarantor
         and upon such information, opinions, reports or statements presented to
         the Issuer or the Guarantor by any Person as to matters the Indemnified
         Person reasonably believes are within such other Person's professional
         or expert competence and who, if selected by such Indemnified Person,
         has been selected with reasonable care by such Indemnified Person,
         including information, opinions, reports or statements as to the value
         and amount of the assets, liabilities, profits, losses, or any other
         facts pertinent to the existence and amount of assets from which
         Distributions to Holders of Capital Securities might properly be paid.

SECTION 7.2       Indemnification

                  (a)      The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against, any and all
loss, liability, damage, claim or expense incurred without negligence or willful
misconduct on the part of the Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of the Indemnified Person defending itself against, or investigating,
any claim or liability in connection with the exercise or performance of any of
the Indemnified Person's powers or duties hereunder. The obligation to indemnify
as set forth in this Section 7.2 shall survive the resignation or removal of the
Guarantee Trustee and the termination of this Guarantee.

                  (b)      Promptly after receipt by an Indemnified Person under
this Section 7.2 of notice of the commencement of any action, such Indemnified
Person will, if a claim in respect thereof is to be made against the Guarantor
under this Section 7.2, notify the Guarantor in writing of the commencement
thereof; but the failure so to notify the Guarantor (i) will not relieve the
Guarantor from liability under paragraph (a) above unless and to the extent that
the Guarantor did not otherwise learn of such action and such failure results in
the forfeiture by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any Guarantor
other than the indemnification obligation provided in paragraph (a) above. The
Guarantor shall be entitled to appoint counsel of the Guarantor's choice at the
Guarantor's expense to represent the Indemnified Person in any action for which
indemnification is sought (in which case the Guarantor shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person or Persons except as set forth below); provided, however,
that such counsel shall be satisfactory to the Indemnified Person.
Notwithstanding the Guarantor's election to appoint counsel to represent the
Guarantor in an action, the Indemnified Person shall have the right to employ
separate counsel (including local counsel), and the Guarantor shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Person which are different from or additional to


                                       14

<PAGE>   18
those available to the Guarantor, (iii) the Guarantor shall not have employed
counsel satisfactory to the Indemnified Person to represent the Indemnified
Person within a reasonable time after notice of the institution of such action
or (iv) the Guarantor shall authorize the Indemnified Person to employ separate
counsel at the expense of the Guarantor. The Guarantor will not, without the
prior written consent of the Indemnified Persons, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the Indemnified Persons are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Person from all liability arising out of such claim, action, suit or proceeding.

SECTION 7.3       Compensation; Reimbursement of Expenses

                  The Guarantor agrees:

                  (a)      to pay to the Guarantee Trustee from time to time
such compensation for all services rendered by it hereunder as the parties shall
agree to from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and

                  (b)      except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by it in accordance with any
provision of this Guarantee (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or willful
misconduct.

                  The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.

ARTICLE VIII
MISCELLANEOUS

SECTION 8.1       Successors and Assigns

                  All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case, to the
extent permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.


                                       15

<PAGE>   19
SECTION 8.2       Amendments

                  Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material respect
(in which case no consent of Holders will be required), this Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority
in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

SECTION 8.3       Notices

                  All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:

                  (a)      If given to the Guarantee Trustee, at the Guarantee
         Trustee's mailing address set forth below (or such other address as the
         Guarantee Trustee may give notice of to the Holders of the Capital
         Securities):

                              The Bank of New York

                              101 Barclay Street, Floor 21W

                              New York, NY 10286
                              Attention: Corporate Trust Administration
                              Telecopy: 212-815-5915



                  (b)      If given to the Guarantor, at the Guarantor's mailing
         address set forth below (or such other address as the Guarantor may
         give notice of to the Holders of the Capital Securities and to the
         Guarantee Trustee):

                              68149 Main Street
                              Blountsville, AL 35031
                              Attention: Kennon R. Patterson, Sr.


                  (c)      If given to any Holder of the Capital Securities, at
         the address set forth on the books and records of the Issuer.

                  All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

SECTION 8.4       Benefit

                  This Guarantee is solely for the benefit of the Holders of the
Capital Securities


                                       16

<PAGE>   20
and, subject to Section 2.1(a), is not separately transferable from the Capital
Securities.

SECTION 8.5       Governing Law

                  THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES THEREOF.


                                       17

<PAGE>   21
                  THIS GUARANTEE is executed as of the day and year first above
written.

                                  COMMUNITY BANCSHARES, INC.,
                                  as Guarantor


                                  By:/s/ Kennon R. Patterson, Sr.
                                     ------------------------------------------
                                     Name: Kennon R. Patterson, Sr.
                                     Title:   Chairman, President and Chief
                                     Executive Officer


                                  THE BANK OF NEW YORK,
                                     as Guarantee Trustee


                                  By:/s/ Annette L. Kos
                                     ------------------------------------------
                                     Name: Annette L. Kos
                                     Title:   Assistant Vice President


                                       18