<PAGE>   1
                                                                    EXHIBIT 10.3













              ----------------------------------------------------


                                      10.3

                               PLACEMENT AGREEMENT

                              DATED MARCH 23, 2000

                     BETWEEN COMMUNITY (AL) CAPITAL TRUST 1

                           COMMUNITY BANCSHARES, INC.

                                       AND

                            SALOMON SMITH BARNEY, INC


              ----------------------------------------------------


<PAGE>   2


COMMUNITY (AL) CAPITAL TRUST I


$10,000,000
10 7/8% Fixed Rate Capital Trust Pass-Through Securities(R) (TruPS)(R)


Fully and Unconditionally Guaranteed as to Distributions
and Other Payments by
Community Bancshares Inc.

PLACEMENT AGREEMENT

New York, New York
March 9, 2000


Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013



Ladies and Gentlemen:

          Community Bancshares Inc., a bank holding company incorporated in
Delaware (the "Company") and Community (AL) Capital Trust I, a Delaware
statutory business trust (the "Trust"), propose, subject to the terms and
conditions stated herein, to issue and sell $10,000,000 of 10 7/8% Fixed Rate
Capital Trust Pass-through Securities(R) of the Trust, having a stated
liquidation amount of $1,000 per capital security (the "Capital Securities").
Salomon Smith Barney Inc. is acting as the exclusive agent of the Company and
the Trust in connection with the offering of the Capital Securities.

          The Capital Securities will be fully and unconditionally guaranteed on
a subordinated basis by the Company with respect to distributions and amounts
payable upon liquidation, redemption or repayment (the "Guarantee") pursuant to
the Guarantee Agreement (the "Guarantee Agreement"), to be dated as of the
Closing Date specified in Section 3 hereof and executed and delivered by the
Company and The Bank of New York, as trustee (the "Guarantee Trustee"), for the
benefit of the holders from time to time of the Capital Securities. The entire
proceeds from the sale of the Capital Securities will be combined with the
entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities"), and will be used by the Trust to purchase
$10,310,000 in principal amount of the Fixed Rate Junior Subordinated Deferrable
Interest Debentures due 2030 of the Company (the "Subordinated Debt
Securities"). The Capital Securities and the Common Securities for the Trust
will be issued pursuant to the Amended and Restated Declaration of Trust (the
"Declaration"), to be dated as of the Closing Date among the Company, as
sponsor, the Administrator(s) named therein (the "Administrators"), The Bank of
New York


<PAGE>   3


(Delaware), a Delaware corporation (the "Delaware Trustee"), The Bank of New
York (the "Institutional Trustee"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Subordinated Debt
Securities will be issued pursuant to an Indenture, to be dated as of the
Closing Date (the "Indenture"), between the Company and The Bank of New York, as
trustee (the "Indenture Trustee").

          The Capital Securities, the Common Securities and the Subordinated
Debt Securities are collectively referred to herein as the "Securities." This
Agreement, the Indenture, the Declaration, the Guarantee Agreement and the
Securities are referred to collectively as the "Operative Documents."
Capitalized terms used herein without definition have the respective meanings
specified in the Declaration.

          The Securities have not been and will not be registered under the
Securities Act of 1933, as amended (the "Securities Act").

          1. Representations and Warranties. The Company and the Trust jointly
and severally represent and warrant to, and agree with you as set forth below in
this Section 1.

          (a) Neither the Company nor the Trust, nor any of their Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on its or their behalf has, directly or indirectly,
made offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of any of the Securities
under the Securities Act.

          (b) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities.

          (c) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.

          (d) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged or will engage in any
directed selling efforts with respect to the Securities within the meaning of
Regulation S.

          (e) Neither the Company nor the Trust is an "investment company" or an
entity "controlled" by an "investment company," in each case within the meaning
of Section 3(a) of the Investment Company Act of 1940, as amended (the
"Investment Company Act") without regard to Section 3(c) of the Investment
Company Act.

          (f) Neither the Company nor the Trust has paid or agreed to pay to any
person any compensation for soliciting another to purchase any of the
Securities.

          (g) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
3801, et seq. (the "Business Trust Act") with the power and authority to own
property and to conduct the business it transacts and proposes to transact and
to enter into and perform its obligations under the Operative


                                       22
<PAGE>   4


Documents. The Trust is duly qualified to transact business as a foreign entity
and is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good standing would
not have a material adverse effect on such Trust. The Trust is not a party to or
otherwise bound by any agreement other than the Operative Documents. The Trust
is and will, under current law, be classified for federal income tax purposes as
a grantor trust and not as an association taxable as a corporation.

          (h) The Declaration has been duly authorized by the Company and, on
the Closing Date, will have been duly executed and delivered by the Company and
the Administrators of the relevant Trust, and, assuming due authorization,
execution and delivery by the Delaware Trustee and the Institutional Trustee, be
a valid and binding obligation of the Company and such Administrators,
enforceable against them in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general principles of equity ("Bankruptcy and Equity"). Each of the
Administrators of the Trust is an employee of the Company and has been duly
authorized by the Company to execute and deliver the Declaration.

          (i) Each of the Guarantee Agreement and the Indenture has been duly
authorized by the Company and, on the Closing Date will have been duly executed
and delivered by the Company, and, assuming due authorization, execution and
delivery by the Guarantee Trustee, in the case of the Guarantee, and by the
Indenture Trustee, in the case of the Indenture, be a valid and binding
obligation of the Company enforceable against it in accordance with its terms,
subject to Bankruptcy and Equity.

          (j) The Capital Securities and the Common Securities have been duly
authorized by the Declaration and, when issued and delivered against payment
therefor on the Closing Date to you, in the case of the Capital Securities, and
to the Company, in the case of the Common Securities, will be validly issued and
represent undivided beneficial interests in the assets of the Trust. The
issuance of none of the Capital Securities or the Common Securities is subject
to preemptive or other similar rights. On the Closing Date, all of the issued
and outstanding Common Securities will be directly owned by the Company free and
clear of any pledge, security interest, claim, lien or other encumbrance.

          (k) The Subordinated Debt Securities have been duly authorized by the
Company and, at the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture, and,
when authenticated in the manner provided for in the Indenture and delivered
against payment therefor by the Trust, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture enforceable
against the Company in accordance with their terms, subject to Bankruptcy and
Equity.

          (l) This Agreement has been duly authorized, executed and delivered by
the Company and the Trust.

          (m) The Trust is not in violation of the Declaration or any provision
of the Business Trust Act. The execution, delivery and performance of the
Operative Documents to which it is a party by the Company or Trust, and the
consummation of the transactions contemplated herein or therein, will not
conflict with or constitute a breach of, or a default under, or result in the
creation


                                       23
<PAGE>   5


or imposition of any lien, charge or other encumbrance upon any property or
assets of the Trust, the Company or any of the Company's subsidiaries pursuant
to any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Trust, the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the property or
assets of any of them is subject, except for a conflict, breach, default, lien,
charge or encumbrance which could not reasonably be expected to have an adverse
effect on the consummation of the transactions contemplated herein or therein,
nor will such action result in any violation of the Declaration or the Business
Trust Act or require the consent, approval, authorization or order of any court
or governmental agency or body.

          (n) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, with all requisite
corporate power and authority to own its properties and conduct the business it
transacts and proposes to transact, and is duly qualified to transact business
and is in good standing as a foreign corporation in each jurisdiction where the
nature of its activities requires such qualification except where the failure of
the Company to be so qualified would not, singly or in the aggregate, have a
materially adverse effect on the condition (financial or otherwise), earnings or
business of the Company and its subsidiaries taken as a whole, whether or not
occurring in the ordinary course of business (a "Material Adverse Effect").

          (o) Each of the Company's significant subsidiaries listed in Exhibit 1
(the "Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized, with all requisite corporate power and authority to own
its properties and conduct the business it transacts and proposes to transact,
and is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its activities requires
such qualification except where the failure of such Subsidiary to be so
qualified would not, singly or in the aggregate, have a Material Adverse Effect.

          (p) The Company and each of its Subsidiaries have all requisite power
and authority, and all necessary material authorizations, approvals, orders,
licenses, certificates and permits of and from regulatory or governmental
officials, bodies and tribunals, to own or lease their respective properties and
to conduct their respective businesses as now being conducted, and neither the
Company nor any of the Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such authorizations,
approvals, orders, licenses, certificates or permits which, singly or in the
aggregate, if the failure to be so licensed or approved or if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect;
and the Company and its Subsidiaries are in compliance with all applicable laws,
rules, regulations and orders and consents, the violation of which would have a
Material Adverse Effect.

          (q) The audited consolidated financial statements (including the notes
thereto) and schedules of the Company and its consolidated subsidiaries for
December 31, 1998 (the "Financial Statements") and the interim unaudited
consolidated financial statements of the Company and its consolidated
subsidiaries for December 31, 1999 (the "Interim Financial Statements") provided
to you are the most recent available audited and unaudited consolidated
financial statements of the Company and its consolidated subsidiaries,
respectively, and fairly presents in all


                                       24
<PAGE>   6


material respects, in accordance with generally accepted accounting principles,
the financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments. Such consolidated financial statements and
schedules have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise noted therein).

          (r) The Company's report on FRY-9C dated December 31, 1999 (the
"FRY-9C") provided to you is the most recent available such report and the
information therein fairly presents in all material respects the financial
position of the Company and its subsidiaries.

          (s) Since the respective dates of the Financial Statements, Interim
Financial Statements and the FRY-9C, there has been no material adverse change
or development with respect to the financial condition or earnings of the
Company and its subsidiaries, taken as a whole.

          (t) Neither the Company nor any of the Subsidiaries is in violation of
its respective charter or by-laws or similar organizational documents or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any of the Subsidiaries is
subject, the effect of which violation or default in performance or observance
would have a Material Adverse Effect.

          (u) The Company is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"),
and the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve"), and the deposit accounts of the Company's subsidiary banks
are insured by the Federal Deposit Insurance Corporation ("FDIC") to the fullest
extent permitted by law and the rules and regulations of the FDIC, and no
proceeding for the termination of such insurance are pending or threatened.

          2. Sale of the Capital Securities. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company and the Trust jointly and severally hereby appoint you as placement
agent (the "Placement Agent"), and you hereby accept such appointment, to act as
the exclusive agent of the Company and the Trust, in connection with the
offering of the Capital Securities contemplated hereby, for the purpose of
soliciting offers and sales of the Capital Securities.

          The Placement Agent shall solicit offers to purchase Capital
Securities in connection with the offering contemplated hereby. The Placement
Agent shall use its best efforts, subject to the terms and conditions of this
Agreement, to procure subscribers for the Capital Securities with an aggregate
stated liquidation amount of $10,000,000 at a purchase price equal to 100% of
the stated liquidation amount thereof. The Placement Agent shall not, in
fulfilling its obligations hereunder, act as an underwriter for the Capital
Securities and is in no way obligated, directly or indirectly, to advance its
own funds to purchase any Capital Securities.

          If the sale and delivery of the Capital Securities as provided herein
is consummated, the Company will pay to the Placement Agent on the Closing Date
a commission per Capital


                                       25
<PAGE>   7


Security equal to 3% of the stated liquidation amount thereof. Any payment
pursuant to this Section 2 shall be made by wire transfer in immediately
available funds to the U.S. account designated in writing by the party entitled
to receive such payment.

          The dividend rate of the Capital Securities, as of the date hereof, is
10 7/8%. Under certain circumstances, the dividend rate of the Capital
Securities may be reduced pursuant to a written agreement between you and the
Company made prior to the Closing Date.

          3. Delivery and Payment. Delivery of and payment for the Capital
Securities shall be made at 10:00 AM, New York City time, on March 23, 2000, or
such later date as you shall designate, which date and time may be postponed by
agreement between you, on the one hand, and the Company and the Trust, on the
other hand (such date and time of delivery and payment for the Capital
Securities being herein called the "Closing Date").

          Delivery of the Capital Securities shall be made at such location, and
in such names and denominations, as you shall designate at least one business
day in advance of the Closing Date. The Company and the Trust agree to have the
Capital Securities available for inspection and checking by you in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date. The
closing for the purchase and sale of the Capital Securities shall occur at the
offices of Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, NY
10006, or such other place as the parties hereto shall agree.

          4. Representations. You represent to the Company and the Trust that:

          (a) You are aware that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to U.S persons except in accordance with Rule 903 of Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. You will not offer, sell or arrange for the
offer or sale of any Securities to purchasers ("Purchasers") except in privately
negotiated transactions that will not require registration of the Securities
under the Securities Act. Terms used in the first sentence of this subsection
(a) have the meanings given to them by Regulation S under the Securities Act.

          (b) You have not offered or sold or and will not arrange for the offer
or sale of the Capital Securities except (i) in an offshore transaction
complying with Rule 903 of Regulation S under the Securities Act, (ii) to those
you reasonably believe are qualified institutional buyers (as defined in Rule
144A under the Securities Act) and that in connection with each such sale, you
have taken or will take reasonable steps to ensure that the purchaser of any
Capital Securities is aware that such sale is being made in reliance on Rule
144A or (iii) to "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) of Regulation D) who provide to you and to the Company a letter in the
form set out in the Declaration.

          (c) You represent and agree that you and each of your Affiliates has
not entered, and will not enter into any contractual arrangement with respect to
the distribution of the Securities except with the prior written consent of the
Company

          (d) Neither you, nor any of your Affiliates, nor any person acting on
your or their


                                       26
<PAGE>   8


behalf has engaged, or will engage, in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities.

          (e) Neither you nor any or your Affiliates, nor any person acting on
your or their behalf, has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Securities Act with respect to the
Securities.

          5. Agreements. The Company and the Trust agree with the Placement
Agent that:

          (a) The Company and the Trust will arrange for the qualification of
the Capital Securities for sale under the laws of such jurisdictions as you may
designate and will maintain such qualifications in effect so long as required
for the sale of the Capital Securities. The Company or the Trust, as the case
may be, will promptly advise you of the receipt by the Company or the Trust, as
the case may be, of any notification with respect to the suspension of the
qualification of the Capital Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

          (b) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates to, resell any Capital Securities that have been
acquired by any of them.

          (c) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates, nor any person acting on its or their behalf, to,
directly or indirectly, make offers or sales of any security, or solicit offers
to buy any security, under circumstances that would require the registration of
any of the Securities under the Securities Act.

          (d) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates, nor any person acting on its or their behalf, to,
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the any of the
Securities.

          (e) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates, nor any person acting on its or their behalf to
engage in any directed selling efforts within the meaning of Regulation S under
the Securities Act with respect to the Securities.

          (f) So long as any of the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, each of the Company and the Trust will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities. The information
provided by the Company and the Trust pursuant to this Section 5(f) hereof will
not, at the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the


                                       27
<PAGE>   9


circumstances under which they were made, not misleading.

          (g) Neither the Company nor the Trust will, until 180 days following
the Closing Date, without your prior written consent, offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, directly or
indirectly, (i) any Capital Securities or other securities of the Trust other
than as contemplated by this Agreement, (ii) any securities that are
substantially similar to the Securities or (iii) any other securities
convertible into, or exercisable or exchangeable for, any of (i) or (ii), or
enter into an agreement, or announce an intention, to do any of the foregoing.

          (h) The Company agrees to pay (i) the costs incident to the
authorization, issuance, sale and delivery of the Capital Securities and any
taxes payable in that connection; (ii) the fees and expenses of qualifying the
Capital Securities under the securities laws of the several jurisdictions as
provided in Section 5(a); and (iii) the fees and expenses of the Institutional
Trustee (as defined in the Declaration), the Guarantee Trustee and the Indenture
Trustee.

          6. Conditions to Your Obligations. Your obligations to use your best
efforts to procure subscription and payment for the Capital Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Trust contained herein as of the date and time that this
Agreement is executed (the "Execution Time") and the Closing Date, to the
accuracy of the statements of the Company and the Trust made in any Capital
Securities pursuant to the provisions hereof, to the performance by the Company
and the Trust of their obligations hereunder and to the following additional
conditions:

          (a) The Company shall have furnished to you the opinion of Bishop K.
Walker, Jr., General Counsel to the Company, dated the Closing Date, addressed
to you to, in substantially the form set out in Annex A hereto.

          (b) The Company shall have furnished to you the opinion of Bishop K.
Walker, Jr., special tax counsel to the Company, dated the Closing Date,
containing such assumptions, qualifications and limitations as shall be
reasonably acceptable to you and your counsel to the effect that for U.S.
federal income tax purposes, the Subordinated Debt Securities will constitute
indebtedness of the Company.

          (c) You shall have received the opinion of Richards, Layton & Finger,
special Delaware counsel for the Company and the Trust, dated the Closing Date,
addressed to you, in substantially the form set out in Annex B hereto.

          (d) You shall have received the opinion of White & Case, LLP, counsel
for the Guarantee Trustee, the Institutional Trustee and the Indenture Trustee,
dated the Closing Date addressed to you, in substantially the form set out in
Annex C hereto.

          (e) You shall have received the opinion of Richards, Layton & Finger,
counsel for the Delaware Trustee, dated the Closing Date, addressed to you, in
substantially the form set out in Annex D hereto.

          (f) The Company shall have furnished to you a certificate of the
Company, signed by a Vice President and by a Treasurer or Chief Financial
Officer of the Company, dated the Closing


                                       28
<PAGE>   10


Date, to the effect that:

                    (i) the representations and warranties of the Company and
          the Trust in this Agreement are true and correct in all material
          respects on and as of the Closing Date with the same effect as if made
          on the Closing Date, and the Company and the Trust have complied with
          all the agreements and satisfied all the conditions on either of their
          part to be performed or satisfied at or prior to the Closing Date; and

                    (ii) since the date of the most recent financial statements
          provided to you, there has been no material adverse change in the
          condition (financial or other), earnings, business or properties of
          the Company and its subsidiaries, whether or not arising from
          transactions in the ordinary course of business.

          (g) Subsequent to the Execution Time there shall not have been any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect of which,
is, in your judgment, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Capital Securities.

          (h) Prior to the Closing Date, the Company and the Trust shall have
furnished to you such further information, certificates and documents as you may
reasonably request.

          (i) At the Closing Date, each of the Operative Documents shall have
been duly authorized, executed and delivered by each party thereto, and copies
thereof shall have been delivered to you.

          If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions, certificates and documents mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to you, this Agreement and all your
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by you. Notice of such cancellation shall be given to the Company and the
Trust in writing or by telephone or telegraph confirmed in writing.

          7. Reimbursement of Your Expenses. If the sale of the Capital
Securities provided for herein is not consummated because any condition to set
forth in Section 6 hereof is not satisfied, because of any termination pursuant
to Section 9 hereof or because of any refusal, inability or failure on the part
of the Company or the Trust to perform any agreement herein or comply with any
provision hereof, the Company will reimburse you upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by you in connection with the proposed offering of
the Capital Securities.

          8. Indemnification. (a) The Company and the Trust agree jointly and
severally to indemnify and hold harmless you and your directors, officers,
employees and agents and each person who controls you within the meaning of
either the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law


                                       29
<PAGE>   11


or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any information (whether oral or written) or documents furnished or
made available to you in connection with the transactions contemplated herein,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.

          (b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever, as due from the Trust under
Section 8(a) hereunder.

          (c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a), above unless and to the
extent that the indemnifying party did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party 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 party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, 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 parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.


                                       30
<PAGE>   12


          9. Termination. This Agreement shall be subject to termination in the
absolute discretion of you, by notice given to the Company and the Trust prior
to delivery of and payment for the Capital Securities, if prior to such time (i)
trading in any of the Company's securities shall have been suspended by the
Commission or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or Delaware authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in your judgment, impracticable or
inadvisable to proceed with the offering or delivery of the Capital Securities.

          10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Trust or their respective officers or trustees and of you set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of you, the Company
or the Trust or any of the officers, directors or trustees, administrators,
controlling persons, and will survive delivery of and payment for the Capital
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.

          11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to you, will be mailed, delivered or
telegraphed and confirmed to at 388 Greenwich Street , New York, New York 10013,
attention of the Legal Department; if sent to the Company or the Trust, will be
mailed, delivered or telegraphed and confirmed to it at 68149 Main Street,
Blountsville, Alabama 35031, Attention: Kennon R. Patterson, Sr., Chairman and
Chief Executive Officer, and copy to: William H. Caughran, Assistant Secretary.

          12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons, and no other person will have any right
or obligation hereunder.

          13. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW.


                                       31
<PAGE>   13


          If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Trust and you.

                                     Very truly yours,

                                     Community Bancshares, Inc.

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

                                     Community (AL) Capital Trust I

                                     By:
                                         ----------------------------

                                     By:  /s/ Denny Kelly
                                         ----------------------------
                                         Name: Denny Kelly
                                         Title: Administrator

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Smith Barney Inc.

By:   /s/ Paul R. Bitler
   ----------------------
    Name: Paul R. Bitler
    Title: Vice President


                                       32
<PAGE>   14


SCHEDULE 1



List of Significant Subsidiaries



         Community Bank



                                       33
<PAGE>   15


ANNEX A



          Pursuant to Section 6(a) of the Placement Agreement, the General
Counsel of the Company shall deliver an opinion to the effect that:

                    (i) each of the Company and the Subsidiaries (A) has been
          duly incorporated and is validly existing as a corporation in good
          standing under the laws of the jurisdiction in which it is chartered
          or organized, with full corporate power and authority to own its
          properties and conduct the business it transacts and proposes to
          transact, (B) is duly qualified to do business as a foreign
          corporation and is in good standing under the laws of each
          jurisdiction which requires such qualification wherein it owns or
          leases material properties or conducts material business, except where
          the failure to be so qualified would not, singularly or in the
          aggregate, have a Material Adverse Effect, and (C) holds all material
          approvals, authorizations, orders, licenses, certificates and permits
          from governmental authorities necessary for the conduct of its
          business, except where the failure to hold such approvals,
          authorizations, orders, licenses, certificates and/or permits would
          not, singularly or in the aggregate, have a Material Adverse Effect;

                    (ii) no consent, approval, authorization or order of any
          court or governmental agency or body is required for the consummation
          of the transactions contemplated herein or in the Operative Documents,
          in connection with the solicitation of the purchase and sale of the
          Capital Securities by you or the purchase of the Subordinated Debt
          Securities by the Trust except such approvals (specified in such
          opinion) as have been obtained;

                    (iii) neither the issue and sale of the Capital Securities
          or the Subordinated Debt Securities, the execution and delivery of the
          Operative Documents by the Company or the Trust and the consummation
          of any other of the transactions therein contemplated in any Operative
          Document nor the fulfillment of the terms thereof will conflict with,
          result in a breach or violation of, or constitute a default under any
          law or the charter or by-laws of the Company or any of its
          Subsidiaries, the terms of any indenture or other agreement or
          instrument known to such counsel and to which the Company or any of
          its Subsidiaries is a party or bound or any judgment, order, decree,
          of any court, regulatory body, administrative agency, governmental
          body or arbitrator having jurisdiction over the Company or any of its
          Subsidiaries, or any provision of applicable law, known to such
          counsel to be applicable to the Company or any of its Subsidiaries,
          except for such conflicts, breaches, violations or defaults which are
          not, in the aggregate, material to the Company and its subsidiaries
          taken as a whole and which do not adversely affect the consummation of
          the transactions contemplated in this Agreement and the Operative
          Documents;

                    (iv) the Company is duly registered as a bank holding
          company under the Bank Holding Company Act and the regulations
          thereunder of the Federal Reserve, and the deposit accounts of the
          Company's banking subsidiaries are insured by the FDIC to the fullest
          extent permitted by law and the rules and regulations of the FDIC, and
          no proceeding for the termination of such insurance are pending or
          threatened;


                                       1
<PAGE>   16


                    (v) each of the Indenture and the Guarantee Agreement has
          been duly authorized, executed and delivered by the Company, and (in
          the case of the Indenture and the Guarantee, respectively, assuming it
          is duly authorized, executed and delivered by the Indenture Trustee
          and the Guarantee Trustee, respectively) constitutes a legal, valid
          and binding instrument of the Company enforceable against the Company
          in accordance with its terms, subject to Bankruptcy and Equity; the
          Subordinated Debt Securities have been duly and validly authorized and
          delivered to the Indenture Trustee for authentication in accordance
          with the Indenture, when authenticated in accordance with the
          provisions of the Indenture and delivered to and paid for by the
          relevant Trust, will constitute legal, valid and binding obligations
          of the Company entitled to the benefits of the Indenture and
          enforceable against the Company in accordance with its terms, subject
          to Bankruptcy and Equity;

                    (vi) this Agreement has been duly authorized, executed and
          delivered by the Company;

                    (vii) the Declaration has been duly authorized, executed and
          delivered by the Company and the Trust;

                    (viii) this Agreement has been duly executed and delivered
          by the Trust;

                    (ix) neither the Company nor the Trust is an "investment
          company" or an entity "controlled" by an "investment company," in each
          case within the meaning of Section 3(a) of the Investment Company Act;
          and

                    (x) assuming the accuracy of the representations and
          warranties and compliance with the agreements contained herein, no
          registration of any of the Securities under the Securities Act is
          required for the offer and sale to you of the Capital Securities in
          the manner contemplated by this Agreement, and the Indenture, the
          Declaration and the Guarantee are not required to be qualified under
          the Trust Indenture Act of 1939.

                  In rendering such opinions, such counsel may (A) state that
         its opinion is limited to the laws of Delaware and New York, the
         corporate laws of the State of Delaware and the Federal laws of the
         United States and (B) rely as to matters involving the application of
         laws of any jurisdiction other than New York and Delaware or the United
         States, to the extent deemed proper and specified in such opinion, upon
         the opinion of other counsel of good standing believed to be reliable
         and who are satisfactory to you and as to matters of fact, to the
         extent deemed proper, on certificates of responsible officers of the
         Company and public officials.


                                       2
<PAGE>   17


ANNEX B



          Pursuant to Section 6(c) of the Placement Agreement, Richards, Layton
& Finger shall deliver an opinion in the following form.

          (i) The Trust is a duly formed and validly existing statutory business
trust in good standing under the Business Trust Act of the State of Delaware
with the business trust power and authority to enter into and perform its
obligations under this Agreement, the Securities and the Declaration and to own
property and conduct its business as described in the Declaration.

          (ii) Under the Delaware Business Trust Act and the Declaration, the
execution and delivery by the Trust of this Agreement, and the performance by
the Trust of its obligations hereunder, have been duly authorized by all
necessary business trust action on the part of the Trust.

          (iii) The Declaration constitutes a valid and binding obligation of
the Company and the Trustees, enforceable against the Company and the Trustees,
in accordance with its terms, subject, as to enforcement, to the effect upon the
Declaration of (a) bankruptcy, insolvency, moratorium, receivership,
liquidation, fraudulent conveyance and transfer, reorganization and other
similar laws relating to or affecting the remedies and rights of creditors, (b)
general principles of equity (regardless of whether considered or applied in a
proceeding in equity or at law), (c) considerations of public policy or the
effect of applicable law relating to fiduciary duties, and (d) principles of
course of dealing or course of performance and standards of good faith, fair
dealing, materiality or reasonableness that may be applied by a court to the
exercise of rights or remedies.

          (iv) The Common Securities have been duly authorized for issuance by
the Trust and upon issuance and delivery by the Trust to the Company against
payment therefor as described in the Declaration, will be duly and validly
issued and will represent duly issued beneficial interests in the Trust. The
issuance of the Common Securities is not subject to preemptive or other similar
rights under the Declaration or the Business Trust Act; provided, that such
counsel may note that the holders of Common Securities may be required to make
payment or provide indemnity or security as set forth in the Declaration.

          (v) The Capital Securities have been duly authorized for issuance by
the Trust, and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and, subject to the qualifications set
forth herein, fully paid and non-assessable beneficial interests in the Trust;
the issuance of the Capital Securities is not subject to preemptive or other
similar rights under the Declaration or the Business Trust Act; and the holders
of the Capital Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided that such
counsel need express no opinion as to any holder of a Capital Security that is,
was or becomes a named Trustee of the Trust. Such counsel may note that the
holders of the Capital Securities may be required to make payment or provide
indemnity or security as set forth in the Declaration.

          (vi) The issuance and sale by the Trust of the Securities, the
execution, delivery


                                       1
<PAGE>   18


and performance by the Trust of the Agreement, the consummation by the Trust of
the transactions contemplated therein and the compliance by the Trust with its
obligations thereunder do not violate (a) any of the provisions of the
Certificate of Trust of the Trust or the Declaration or (b) any Delaware law or
Delaware administrative regulation applicable to the Trust.

          (vii) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities (other than
having a Delaware trustee as required by the Delaware Business Trust Act and the
filing of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, no authorization, approval, consent or order
of any Delaware court or Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely as a result of the issuance and sale
of the Capital Securities, the consummation by the Trust of the transactions
contemplated herein or the compliance by the Trust with its obligations
hereunder, except such as have been obtained and such as may be required by the
securities laws of the State of Delaware (as to which such counsel need express
no opinion).

          (viii) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets, activities (other
than having a Delaware trustee as required by the Delaware Business Trust Act
and the filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, and assuming that the Trust is
treated as a grantor trust for federal income tax purposes and that the holders
of the Capital Securities are viewed for federal income tax purposes as owners
of either all of, or their liquidation and accrued but unpaid share of, the
Subordinated Debt Securities held by the Trust, the holders of Capital
Securities (other than those holders of Capital Securities, or persons who are
partners or S corporation shareholders for federal income tax purposes in such
holders of Capital Securities, who reside or are domiciled in the State of
Delaware or who are otherwise subject to income taxation in the State of
Delaware) will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust, and the Trust
will not be liable for any income tax imposed by the State of Delaware (in
rendering the opinion expressed in this paragraph (viii), such counsel need
express no opinion concerning the securities laws of the State of Delaware).


                                       2
<PAGE>   19


ANNEX C



          Pursuant to Section 6(d) of the Placement Agreement, White & Case LLP
shall deliver an opinion to the effect that:

                    (i) The Bank of New York, is a national banking association
          with trust powers duly organized and validly existing in good standing
          under the laws of the United States of America with all necessary
          corporate power and authority to execute, deliver and carry out and
          perform its obligations under the terms of the Guarantee Agreement,
          the Declaration and the Indenture;

                    (ii) the execution, delivery and performance by The Bank of
          New York of the Guarantee Agreement, the Declaration and the Indenture
          have been duly authorized by all necessary corporate action on the
          part of The Bank of New York and each of the Guarantee Agreement, the
          Declaration and the Indenture has been duly executed and delivered by
          The Bank of New York, and constitutes the legal, valid and binding
          obligation of The Bank of New York, enforceable against it in
          accordance with its terms (subject to Bankruptcy and Equity);

                    (iii) the execution, delivery and performance of the
          Guarantee Agreement, the Declaration and the Indenture by The Bank of
          New York do not conflict with or constitute a breach of the charter or
          by-laws of The Bank of New York; and

                    (iv) no consent, approval or authorization of, or
          registration with or notice to, any governmental authority or agency
          of the United States of America governing the banking or trust powers
          of The Bank of New York is required for the execution, delivery or
          performance by it of the Guarantee Agreement, the Declaration and the
          Indenture.


                                       1
<PAGE>   20


ANNEX D



          Pursuant to Section 6(e) of the Placement Agreement, Richards, Layton
& Finger shall deliver an opinion to the following form.


                                       1