Document:

Consumer Cards Incentive Agreement

 EXHIBIT 10.24 
  

					
	 	  	 	  	 CERTAIN PORTIONS OF THIS EXHIBIT
 HAVE BEEN OMITTED AND FILED
 SEPARATELY WITH THE SECURITIES
 AND EXCHANGE COMMISSION
 PURSUANT TO A REQUEST FOR
 CONFIDENTIAL TREATMENT. THE
 SYMBOL “****” HAS BEEN INSERTED
 IN PLACE OF THE PORTIONS SO OMITTED.

  
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 Consumer Cards Incentive Agreement 
  
 This agreement (including all Exhibits and Annexes attached hereto, the
“Agreement”) is made as of the Effective Date (as defined below) by and between MasterCard International Incorporated, a Delaware corporation having its principal place of business at 2000 Purchase Street, Purchase, New York 10577-2509
(“MasterCard”), and MBNA America Bank, N.A. having its principal place of business at 1100 North King Street, Wilmington, DE 19884-0133 (“MBNA”). 
  
 WHEREAS, MBNA is licensed to issue Cards bearing the MasterCard name and mark
pursuant to the Rules, and 
  
 WHEREAS, MasterCard and MBNA
desire to enter into an arrangement by which MasterCard will provide Support to help increase the issuance, usage and activation of MBNA’s MasterCard Cards. 
  
 NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows: 
  

	1.	Definitions. 

  
 Capitalized terms used in this Agreement shall have the meanings given to them in Exhibit A or elsewhere in this Agreement. 
  

	2.	MasterCard Support.  

  
 In consideration for MBNA’s timely performance of its obligations under this Agreement, MasterCard shall provide MBNA with the Support outlined below
during the Term, subject to the conditions and limitations contained herein. 
  

	2.1	MasterCard **** Incentive. Subject to Section 3, as of the Effective Date, MasterCard will pay to MBNA a **** for each calendar quarter of the Term with an annual
adjustment at the end of each Year during the Term (the “****”). 

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	 	A.	Quarterly Calculation 

  

	 	1.	Unless otherwise adjusted as provided herein, the **** for each Year of the Term will be distributed by calendar quarter, as follows (“Quarterly ****”):

  
 Table 1. 
  

			
	 Measurement Period

	  	 Quarterly ****
 Volume
($****)

		
	 1st
quarter
	  	 $****

		
	 2nd
quarter
	  	 $****

		
	 3rd
quarter
	  	 $****

		
	 4th
quarter
	  	 $****

  

	 	2.	MBNA shall pay MasterCard Standard Pricing as applicable under the Rules and with the same frequency as required in the MCBS Manual. At the conclusion of each calendar
quarter of the Term for each of the first three calendar quarters of every Year after the Effective Date, and within thirty (30) days after MBNA has provided the Required Reports for such quarter, MasterCard shall make the appropriate
calculation and **** of MBNA’s actual payments of the **** for such period pursuant to this Section 2. Unless otherwise adjusted as provided herein, the appropriate **** and the corresponding applicable **** and **** for such quarter shall
be determined in Table 2. For the first three calendar quarters of calendar year 2005, the **** and **** to be employed will be **** and ****, respectively. The **** and the corresponding applicable **** and **** to be used in the first three
calendar quarters of ensuing Years will in each case be based on the **** achieved during the preceding Year: 

  

					
	 Table 2
     ($)

	  	 ****

	  	 ****

			
	 ****
	  	 ****
	  	 ****

			
	 ****
	  	 ****
	  	 ****

			
	 ****
	  	 ****
	  	 ****

			
	 ****
	  	 ****
	  	 ****

  

	 	3.	The **** is calculated as: **** 

  

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	 	B.	Annual Calculation 

  
 At the end of the 4th
calendar quarter of each Year during the Term, and within thirty (30) days after MBNA has provided all Required Reports for such Year, MasterCard shall make the appropriate calculation and **** as follows: 
  

	 	1.	The **** will be used with Table 2 to determine the corresponding ****, as well as **** and the ****, for that Year. 

  

	 	2.	The “****” is calculated as follows: **** 

  

	 	3.	In the event that in any given Year of the Term the **** generated by MBNA equals or exceeds the **** but does not equal or exceed the relevant **** Target described in
Section 3.1 below, then prior to performing the calculation pursuant to Section 2.1(B.) the **** and the **** with respect to such Year will be increased by a **** that is equivalent to**** the **** shortfall by which the **** generated by
MBNA in such Year is below the applicable **** Target, calculated as follows: **** 

  

	 	4.	In the event that in any quarter of any given Year of this Agreement the **** generated by MBNA does not meet or exceed the relevant Quarterly **** then the MBNA pricing will remain
at MasterCard Standard Pricing as applicable under the Rules for the **** region and **** region, as applicable, and no **** will apply for that quarter. Additionally, in the event that the **** in any given Year does not meet or exceed the ****
then MBNA pricing will remain at MasterCard Standard Pricing as applicable under the Rules for the **** region and **** region, as applicable, and no **** will apply in any such Year. If the **** is calculated and the result is a **** number that
more than offsets the amount of the fourth quarter ****, if any, owed to MBNA, then MasterCard may only collect such unrecovered balance from future payments otherwise payable to MBNA under this Agreement, or from future MBNA MasterCard **** income.

  

	2.2	MasterCard ****/ Other Support. 

  
 MasterCard will provide MBNA with two **** budgets annually subject to this Section 2.2: 
  

	 	A.	**** Budget. Subject to section 2.2(D.) below, the **** Budget will have a 2005 value of up to $**** and will increase $**** per Year thereafter during each ensuing Year of
the Term, that MBNA will use exclusively in connection with its MasterCard Card portfolio (e.g., ****). 

  

	 	B.	**** Budget. Subject to section 2.2(D.) below, the **** Budget will have a value of up to $**** each Year of the Term and will require a **** dollar commitment from MBNA
(e.g., if **** is estimated at $****, $**** would be funded from the **** budget and the remaining $**** would be funded by MBNA). 

  

	 	C.	Budget Roll-Over. In any Year if the **** Budget has been depleted, then MBNA may chose to utilize any remaining **** Budget for additional **** falling within the
**** Budget practice areas, with the matching dollar commitment applicable to any additional **** Budget practice areas. 

  

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	 	D.	Budget Proration. If MBNA’s **** in any Year is greater than the **** but less than the Annual **** Target for such Year, then (unless otherwise agreed upon by the
parties), the following Year’s **** Budget and **** Budget will be multiplied by the **** represents of the Annual **** Target (e.g., if the **** in 2006 is $**** rather than $****, 2006 **** would be ****% of the Annual **** Target
($**** / $**** = **** ). As a result, the **** Budget for 2007 would be $**** (2007 value of $**** * **** ). The Budget for 2007 would be $**** (2007 value of $**** * **** ). If the **** in any Year is less than the ****, then (unless otherwise
agreed upon by the parties), the following Year’s **** Budget and **** Budget will be suspended for the remainder of the Term or until the **** for an ensuing Year is greater than the ****. If and when **** equals or exceeds the ****, then the
following Year’s **** Budget and **** Budget will be reinstated at the then current values stated in this Agreement for that Year. 

  

	 	E.	**** Marketing Committee. An **** marketing committee will be established, co-chaired by MasterCard’s **** or designee, and MBNA’s **** or designee. This committee
will oversee and approve the various initiatives which will be funded by the **** budgets. Deployment of **** budget funds will be mutually determined in good faith and will be based on a disciplined business case and prioritization process. Actual
**** funded via these budgets will be deployed to support the growth of MBNA’s MasterCard Card portfolio. All **** will require the due execution of a MasterCard **** agreement (on mutually agreed upon terms and conditions), and the ****
services to be provided to MBNA will consist of services generally provided by MasterCard to its members (unless otherwise agreed), and as agreed to by MBNA from time to time. **** must be approved by the **** marketing committee by October 1
of each Year to be deployed against that Year’s budget(s). Additionally, projects must be completed by December 31 of each Year to be deployed against that Year’s budget(s). MBNA agrees to share with MasterCard mutually agreed upon
program and performance data relevant to activities using MasterCard **** or support. Results of any such efforts will be for the sole use of MBNA, or parties designated by MBNA (e.g., MasterCard), and may not be transferred by MasterCard to
third parties without the prior written approval of MBNA. Notwithstanding any provision of this Agreement, MBNA shall not provide any data otherwise required to be provided by it to MasterCard, and may further restrict or end any use by MasterCard
of any such data which is provided by MBNA to MasterCard, if MBNA is prohibited from disclosing the same or permitting such use because of any Law, or individual present or former customer request, or if the provision of such information or its
intended use would create an additional material regulatory compliance burden on MBNA (e.g., result in MBNA being deemed a credit reporting agency). 

  

	 	F.	No Carry Over. To the extent that MBNA fails to use the entire value of the two **** budgets available to MBNA, as described above, in any Year of the Term, any such unused
**** budget amount(s) will be forfeited and MasterCard will have no obligation to make any rebate or other consideration to MBNA for the unused amount of **** budget; provided however, that in the event MBNA determines in good faith that MasterCard
has failed to act reasonably expeditiously in assisting MBNA to utilize such budget(s) during any Year, then the unused portion of such budgets for that Year shall roll into and be 

  

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 added to the budgets for the following Year. The value of **** services will be determined in accordance with MasterCard’s standard methodology for
determining **** valuation in effect from time to time and MasterCard’s determination of value will be final and binding on the parties, absent material error or failure to adhere to such methodology. 
  

	 	G.	Your Credit Card Companies. For the ongoing industry campaign “Your Credit Card Companies,” MasterCard commits to provide in 2005 its proportionate share of the
level of corporate and financial support as was committed equally by each member of the Your Credit Card Companies committee for 2005; subject to all other members of such committee funding their commitments in accordance with the committee accord.

  

	2.3	Acquired Portfolios. 

  
 A. MBNA shall promptly notify MasterCard of any Acquired Portfolio transaction as soon as reasonably practicable after such transaction is
finalized. No benefits or incentives shall be available under this Agreement to the Cards contained in Acquired Portfolios acquired by MBNA during the Term until such time as **** and subject to ****. 
  
 B. (a) **** 
  
      (b) **** 
  

	3.	MBNA Covenants. 

  
 In consideration for the Support to be provided to MBNA by MasterCard as described above and to the other terms and conditions set forth in the Agreement,
MBNA agrees and acknowledges that: 
  

	3.1	**** Targets. “Annual **** Targets” when used in this Agreement shall have the following meanings with respect to each Year: 

  

			
	 Year

	  	 **** Target:

	 	  	$ ****
	 	  	$ ****
	 	  	$ ****
	 	  	$ ****
	 	  	$ ****

  

	3.2	Portfolio Transfer. **** 

  

	3.3	Use of Support. MBNA agrees that it shall use all Support exclusively to grow its MasterCard Card business and will not use any Support for the benefit of any Card brand
other than MasterCard, unless otherwise agreed by MasterCard. 

  

	4.	General Terms and Conditions. 

  

	4.1	Payment. MasterCard may reasonably condition any payment, waiver, rebate, or other provision of Support on MBNA’s providing the Required Reports. Any Support payments
owed by MasterCard to MBNA shall be made via the MasterCard Consolidated Billing 

  

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 System (“MCBS”) or by other means as mutually agreed. MasterCard may, at MasterCard’s option, recover any amount owing from MBNA under this
Agreement by debiting MBNA’s MCBS account pursuant to Section 2.1.B.4 or by netting future amounts owed by MasterCard to MBNA against such amounts owed to MasterCard by MBNA. 
  

	4.2	Taxes. All payments made by the parties under this Agreement shall be deemed inclusive of all taxes including, but not limited to, value-added (VAT), sales, use, occupancy,
excise and income taxes. The sole obligation to report and remit any taxes shall be that of the party to which the payment is made. 

  

	4.3	Term. This Agreement shall commence as of the Effective Date and continue for **** Years from such date, unless sooner terminated in accordance with this Agreement or the
mutual agreement of the parties (the “Term”). 

  

	4.4	Reporting. In addition to any reporting required under the Rules, MBNA shall provide MasterCard at the end of each calendar quarter during the Term the following reports:
(i) a report in the form attached as Exhibit C hereto, which shall include an annual forecasting report, and quarterly forecasting report for each ensuing quarter of the Year following such calendar quarter, which MBNA shall make commercially
reasonable efforts to submit fifteen days (15) following the end of each calendar quarter but which shall be submitted no later than thirty (30) days following the end of each calendar quarter; (ii) **** and (iii) MBNA will
provide appropriate supporting material and back-up as MasterCard may reasonably request to support all Required Reports. MasterCard may audit the QMR as provided in the Rules. With respect to the Required Reports other than the QMR, MasterCard
shall have the right (not to be exercised more than once in any twelve month period) to require that a third party certified accounting firm to be mutually agreed upon by the parties perform an audit of the relevant portions of MBNA’s books and
records as is reasonable and necessary for the purposes of verifying the remaining Required Reports. MasterCard shall pay for the cost of any such audit requested by it for the purposes of verifying the remaining Required Reports unless the results
of the audit prove that MBNA has materially breached its reporting obligations under this Agreement; in which case MBNA shall pay for the cost of such audit. The independent certified accounting firm then being utilized by MBNA will be designated
the certified accounting firm to be used unless such accounting firm is impermissibly conflicted as determined by such accounting firm. Any payments due hereunder by MasterCard may be delayed by MasterCard until forty-five (45) days after the
backup is provided and/or the audit is undertaken and shall be amended as appropriate. MasterCard shall make commercially reasonable efforts to provide quarterly reporting to MBNA with detailed **** by Area of Use in the form attached as Exhibit E
hereto. 

  

	4.5	Quarterly and Annual Performance Review. Upon the conclusion of each quarter of each Year of the Term, MBNA, upon being given reasonable notice, will meet with MasterCard to
jointly review MBNA’s performance as submitted in Required Reports under the Agreement for purposes of ensuring the mutually satisfactory progress of the objectives of this Agreement and other initiatives as mutually agreed between MBNA and
MasterCard. Additionally, in the event the Annual **** Target has not been attained in any given Year of the Term, MBNA and MasterCard will mutually confirm which **** and **** and **** from Table 2 will apply, if any, for purposes of calculating
the following Year’s ****, based on the terms of this Agreement. 

  

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	4.6	Net Incentive Support. Notwithstanding the provisions of Section 4.1, Support amounts payable in any given Year under this Agreement shall be reduced by the amount of
any other payment received by MBNA for the same Year, as successor to an acquired Person or Acquired Portfolio, under any benefit, support, or incentive arrangement between MasterCard and such acquired Person or its Affiliates or the transferor of
such Acquired Portfolio in connection with any Cards that are subject to this Agreement. 

  

	4.7	Standard Terms and Conditions. The Standard Terms and Conditions attached hereto as Exhibit B (the “Standard Terms and Conditions” or “Exhibit B”) are
incorporated by reference and made a part of this Agreement and will have the same force and effect as if fully set forth in this Agreement. 

  

	4.8	The parties acknowledge and agree that this Agreement does not supercede any other agreements between the parties. This Agreement does not and is not intended to alter or
amend any aspect or provision of any other agreement between the parties or any surviving obligations from any prior agreements, or any other obligations within existing MBNA/MasterCard agreements. All such terms and commitments in any such
agreements shall survive and operate in accordance with their terms. Nothing in this Agreement will limit or preclude MasterCard’s or MBNA’s rights or remedies at law in the event of a breach of any provisions of any agreements or other
surviving obligations. 

  

	4.9	Notices. All notices relating to this Agreement, must be in writing and will be deemed given upon hand delivery or upon receipt if sent by an overnight courier
delivery service of general commercial use and acceptance (i.e., Airborne, Federal Express or UPS) to the following addresses or such other address as may be later designated by notice given by such party: 

  

			
	If to MBNA:	 	MBNA America Bank, N.A.
	 	 	1100 North King Street
	 	 	Wilmington, DE 19884
	 	 	Attention: Ms. Michelle Shepherd
	
	with a copy to the office of the general counsel at the same address.
		
	If to MasterCard:	 	MasterCard International Incorporated
	 	 	2000 Purchase Street
	 	 	Purchase, New York 10577
	 	 	Attention: Mr. Gary Flood
	
	with a copy to the office of the general counsel at the same address.

  
 *******************

  

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 This Agreement is executed as of April 14, 2005, and is effective as of the Effective Date. 
  
 MBNA AMERICA BANK, N.A. 
  

			
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	MASTERCARD INTERNATIONAL INCORPORATED
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

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 EXHIBIT A 
  

	A.	“Account” means the line of credit, deposit account, asset account or other source of funds that are accessed by a Card. 

  

	B.	“Acquired Portfolio” means MasterCard-Branded Cards acquired by MBNA through a merger, portfolio acquisition or similar bulk acquisition of any kind (and
including without limitation the right to operate and manage any such acquired portfolio) during the Term, however, such term shall specifically not include any acquired MasterCard-Branded Cards that were lost to attrition after acquisition
but before being included in the Required Reports as a result of material delinquency or standard charge-off. 

  

	C.	“Actual Quarterly****” means the **** reported in the MBNA QMR for any quarter during the Term. 

  

	D.	“****” means the sum of the **** reported in the MBNA QMR for the 1st through 4th quarters of each Year during the Term.

  

	E.	“Affiliate” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, such Person. 

  

	F.	“Annual **** Targets” shall mean the annual **** targets based on an increase of ****% annually, as illustrated in the table in Section 3.1.

  

	G.	“Area of Use” means **** 

  

	H.	“****” shall mean for each Year of the Term, **** of at least $**** ($**** ). 

  

	I.	“Card” means any general purpose consumer payment card, including any consumer: bank card, credit card, charge card, travel and entertainment card, debit
card, ATM card, prepaid card, smart card, stored-value card, co-branded card, virtual card or any combination thereof that is issued in the Area of Use, and the Account associated with such card. Card also includes the Account number(s) or
alternative modes of access to the underlying Account (e.g., a convenience check or a virtual card). 

  

	J.	“****” means **** Attached hereto as Exhibit D. 

  

	K.	“control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by contract, or otherwise. 

  

	L.	“Effective Date” means January 1, 2005. 

  

	M.	“****Budget” shall, unless otherwise mutually agreed by the parties, be limited to funding in the following ****: (i) ****; (ii) ****
(iii) ****; (iv) ****; and (v) ****. As additional **** are added by mutual agreement of MasterCard and MBNA, this definition may be revised via an addendum to this Agreement. 

  

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	N.	“****” shall mean the actual **** generated in any given measurement period (e.g., quarterly or annually) less the applicable **** (if annually) or
Quarterly **** (if quarterly) for that same measurement period. 

  

	O.	“Law” means all statutes, rules, regulations, court orders, consent decrees and/or laws which apply to a party (in the reasonable legal opinion of counsel to
such party) and affect matters contemplated by this Agreement, and all general principles of equity. 

  

	P.	“MasterCard-Branded” means a MasterCard Card. 

  

	Q.	“MasterCard Card” means a Card containing the name, logo, hologram, or service marks of MasterCard or any of its Affiliates (including but not limited to
Cirrus, Maestro and Mondex), or any Card that has MasterCard functionality or acceptance utility issued in accordance with the Rules in effect from time to time. 

  

	R.	“MasterCard Competitor” means Visa, American Express, Diners Club, JCB, Carte Blanche, Discover and any other brand or payment form that the parties
mutually and reasonably determine to be in competition with any MasterCard Card. 

  

	S.	“MasterCard Standard Pricing” means the issuer fees that would apply to MBNA under the Rules as they pertain to the corresponding Area of Use for the period
in issue ****. 

  

	T.	“****Budget” shall, unless otherwise mutually agreed by the parties, be limited to funding for the following ****: (i) ****; (ii) ****;
(iii) ****; and (iv) ****. As additional **** are added by mutual agreement of MasterCard and MBNA, this definition may be revised via an addendum to this Agreement. 

  

	U.	“MBNA’s Processing System” means MBNA’s internal computer systems (commonly referred to at MBNA as “MBNA Technology”), which supports
MBNA’s Card business by providing services such as, but not limited to ****. 

  

	V.	“Person” means any individual, partnership, corporation (including business trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture, or other entity, or a government or any political subdivision or agency thereof. 

  

	W.	“****” shall mean, for any period of calculation during the Term **** 

  

	X.	“Required Reports” shall mean the reports MBNA shall provide to MasterCard as set forth in Section 4.4 hereto, and shall include MasterCard’s
Quarterly MBNA Reports (“QMR”). 

  

	Y.	“Revised ****” shall have the meaning ascribed thereto in Section 2.3. 

  

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	Z.	“Rules” means the MasterCard Bylaws and Rules, the Cirrus Worldwide Operating Rules, regional Maestro licensor rules, and any other directive, memorandum,
policy, or other requirement imposed by MasterCard, Maestro, Cirrus, or any other of MasterCard’s Affiliates relating to MasterCard Cards, Maestro-branded Cards, or Cirrus-branded Cards, as such bylaws and rules, operating rules, licensor
rules, directives, memoranda, policies, or other requirements may be amended from time to time. 

  

	AA.	“Support” means the obligations of MasterCard contained in Section 2. 

  

	BB.	“Term” shall have the meaning ascribed to it in Section 4.3. 

  

	CC.	“****” shall mean the range of MBNA **** found in Table 2 used to determine the Minimum Qualifying **** and the ****. 

  

	DD.	“Year” shall mean each consecutive 12 month period of the Agreement with the first such period commencing on the Effective Date. 

  

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 EXHIBIT B 
  
 STANDARD TERMS AND CONDITIONS 
  
 As
provided in Section 4.7 of the Agreement, the following Standard Terms and Conditions form a part of and are incorporated by reference into the Agreement. 
  

	B.1	Confidentiality. Except as otherwise provided under the Rules, during the Term and for five years thereafter MBNA and MasterCard will treat any information relating to this
Agreement, the existence of this Agreement, and all terms and conditions of this Agreement as confidential. Such confidential information shall be disclosed only to those individuals with a reasonable need to know within their organizations
(provided such individuals agree to be bound by the confidentiality obligations herein). Such confidential information shall not be disclosed to third parties without the prior written approval of the non-disclosing party hereto, except that either
party may disclose same to its auditors, accountants, regulators, Board members or outside counsel, provided that such persons are advised of, and observe the obligations of this Section B.1. The parties acknowledge that, in the event of a breach of
Section B.1 of this Agreement, the non-breaching party will likely suffer irreparable damage that cannot be fully remedied by monetary damages. Accordingly, in addition to any remedy which the non-breaching party may possess pursuant to applicable
law, the non-breaching party retains the right to seek and obtain injunctive relief against any such breach in any court of competent jurisdiction. The provisions of this Section B.1 supercede the confidentiality obligations contained in any
prior communications between the parties hereto relating to the subject matter of this Agreement. In addition, the provisions of this Section B.1 shall survive the termination of this Agreement. 

  

	B.2	Enforceability. 

  
 (a) If one or more of the provisions contained herein shall, for any reason, be held by a court of competent jurisdiction to be unenforceable or invalid
in any respect under applicable law, such unenforceability or invalidity shall not affect any other provision of this Agreement, and this Agreement shall then be construed as if such unenforceable or invalid provisions had never been contained
herein and the parties shall immediately commence negotiations in good faith to reform this Agreement to make alternative provisions herein that reflect the intentions and purposes of the severed provisions in a manner that does not run afoul of the
basis for such unenforceability or invalidity. 
  
 (b) Each
party’s waiver of any breach of any provision of this Agreement, or either party’s failure at any time to enforce any right or remedy available to it, shall not be construed to be a waiver of such right or remedy with respect to any other
prior, concurrent or subsequent breach or failure by the other party. Except as otherwise provided herein, no waiver shall be effective unless made in writing. 
  

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	B.3	Choice of Law. This Agreement and the respective rights and obligations of the parties hereto shall be governed by the laws of the State of New York, excluding any
“conflict of laws” or similar provisions that would mandate or permit application of the substantive law of any other jurisdiction. 

  

	B.4	Execution Authority. MasterCard and MBNA each represent and warrant that it has all necessary corporate power and authority to enter into this Agreement and, when executed
and delivered, this Agreement shall be each of MBNA’s and MasterCard’s legal, valid and binding obligation enforceable in accordance with its terms, except as such enforceability may be limited by Law. 

  

	B.5	Remedies. Except as otherwise expressly provided herein, the remedies for breach stated herein are non-exclusive. In addition to these remedies, the parties shall be entitled
to pursue any other remedies that they may have at law or in equity. 

  

	B.6	Termination. 

  
 (a) Prior to the scheduled conclusion of the Term, either party may terminate this Agreement by giving notice to the other party in the event that the
other party materially breaches any of its obligations under this Agreement, which breach is not cured within thirty (30) days after notice thereof, or if cure cannot be effected in such time, such additional time as is necessary to cure using
commercially reasonable efforts; provided that the failure of the cure period to expire shall not preclude either party from seeking an order for injunctive relief with respect to any breach or threatened breach of this Agreement. 

 
 (b) This Agreement will terminate immediately at the election of the
non-breaching party in the event that: (i) a court of competent jurisdiction assumes custody, attaches or sequesters all or a material portion of a party’s property or assets, which custody, attachment or sequestration is not suspended or
terminated; (ii) a party admits in writing its inability to pay its debts generally as they become due; (iii) a party becomes insolvent (whether by balance sheet insolvency or a failure to meet obligations in the ordinary course) or makes
an assignment for the benefit of creditors; (iv) a party files any voluntary, or if there is filed against such party an involuntary, petition in bankruptcy under the United States Bankruptcy Code, or any similar bankruptcy or insolvency laws
of another jurisdiction (as now or in the future enacted or amended), provided that in the event of any involuntary petition the breaching party will have a period of sixty (60) days from the date of filing thereof to discharge the same; or
(v) a party consents to the appointment of a receiver for all or a substantial portion of its property or assets. 
  
 (c) MasterCard may terminate this Agreement upon thirty (30) days notice to MBNA in the event that MBNA ceases to be a principal member of MasterCard
International Incorporated that is licensed to use the MasterCard brand marks. 
  

	B.7	Continued Observance. The obligations stated herein shall be binding upon and inure to the benefit of each of the parties and their respective successors and assigns,
provided however, that no party shall have the right to assign to any third party (including without limitation, by way of sale of any Cards subject to this Agreement, by voluntary or 

  

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 involuntary transfer, by operation of law or otherwise) any of its rights under this Agreement against the other party, or the benefits thereof, without
first obtaining the prior written consent of the other party, such consent not to be unreasonably withheld or delayed. If any Person acquires any interest in this Agreement or the subject matter hereof in any manner, whether by acquiring any Cards
subject to this Agreement, by voluntary or involuntary transfer, by operation of law or otherwise, such interest shall be held subject to all of the terms of this Agreement and by taking or holding such interest, such Person shall be conclusively
deemed to have agreed to be bound by, and to comply with, all of the terms and obligations of this Agreement. 
  

	B.8	Force Majeure. Neither party shall be held responsible for any delay or failure in performance to the extent such delay or failure is caused by fire, flood, explosion,
terrorism, war, strike, embargo, government requirement, civil or military authority, act of God, act or omission of carriers or other similar causes beyond its control, that was not reasonably foreseeable or avoidable, and without the fault or
negligence and/or lack of diligence of the delayed party (“force majeure condition”). If any force majeure condition occurs, the party delayed or unable to perform shall give written notice to the other party, stating the nature of the
force majeure condition, the steps the party has taken or will take to minimize the effect of that condition, and the amount of time the delay is expected to last. Thereafter, the time to perform the acts or obligations that were delayed by such
condition (and any corresponding acts or obligations of the non-delayed party) shall be extended by the length of time the force majeure condition endured, provided the delayed party has used commercially reasonable best efforts to overcome or
resolve the force majeure condition, further provided, however, that the non-delayed party shall have the right to terminate this Agreement if such force majeure condition endures for more than one hundred forty (140) days upon providing at
least thirty (30) days written notice to the delayed party. 

  

	B.9	Indemnification. 

  
 (a) Each of the parties (the “indemnifying party”) agrees, at its own expense, to defend, protect, indemnify, and hold the other party, and any
of its directors, officers, employees and agents (collectively, the “indemnified party”) harmless from and against any action or threatened action, suit, claim or proceeding, whether or not well grounded, arising out of any alleged
wrongful act or omission of the indemnifying party, its employees, agents, and subcontractors relating to the subject matter of this Agreement and against any and all expenses (including reasonable attorneys’ fees), judgments, fines, costs,
amounts paid in settlement or any loss or damage incurred by the indemnified party, or any of the above-named indemnified parties relating thereto. The indemnifying party will give prompt notice to the indemnified party of any event or circumstance
that it believes gives right to an obligation of indemnity and the indemnified party will cooperate with the indemnifying party in the defense and resolution thereof. 
  
 (b) Failure to give timely notice will not excuse any obligation of indemnity provided that the indemnifying party obtains
actual knowledge of the event or circumstance, except to the extent an indemnifying party’s ability to eliminate or mitigate any claim or loss is prejudiced thereby. If an expense or cost is found to be associated with an indemnified

  

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 Execution Copy 
  
 party’s failure to give timely notice to the indemnifying party, the indemnified party will pay such expense or cost; provided, that in agreeing to
pay such expense or cost the indemnified party will not be deemed in any way to have waived its right to indemnification hereunder, net of any such expense or cost. 
  

	B.10	Miscellaneous. 

  

	 	(a)	This Agreement constitutes the entire agreement between the parties with respect to subject matter hereof, and supersedes any other prior oral or written agreement regarding the
subject matter hereof. This Agreement can only be amended or modified in a written agreement signed by both parties. 

  

	 	(b)	The parties hereto shall ensure that their obligations under this Agreement are performed in accordance with all applicable Laws and registrations, directions, permissions,
licenses, waivers, consents, approvals and other authorizations of competent governmental authorities. 

  

	 	(c)	This Agreement is the product of negotiations between the parties hereto and their respective counsel. No provision or section of this Agreement shall be read, construed or
interpreted for or against either party by reason of ambiguity of language, rule of construction against the draftsman, or any similar doctrine. 

  

	 	(d)	This Agreement may be executed in one or more counterparts, each of which, taken together, shall constitute but one original document. 

  

	 	(e)	The captions in this Agreement are included for convenience only and shall not affect the meaning or interpretation of this Agreement. 

  

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 Execution Copy 
  
 EXHIBIT C 
  
 QUARTERLY PERFORMANCE AND FORECASTING REPORT 
  
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 C-1 

 Execution Copy 
  
 QUARTERLY PERFORMANCE AND FORECASTING REPORT (continued) 
  
 **** 
  

 C-2 

 Execution Copy 
  
 EXHIBIT D 
  
 **** 
  

 C-3 

 Execution Copy 
  
 EXHIBIT E 
  
 **** 
  

 C-4 

 Execution Copy 
  
 Annex A 
  
 **** 
  

 C-5 

 Execution Copy 
  
 Annex B 
  
 **** 
  

 C-6 

 Execution Copy 
  
 Annex C 
  
 **** 
  

 C-7Form of Change in Control Agreement

 EXHIBIT 10.49 
  
 CHANGE IN CONTROL AGREEMENT 
  

THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”), dated this      day of November, 2005, by and between
Community Bancshares, Inc. a Delaware corporation (the “Company”), and John W. Brothers (the “Executive”). 
  
 WITNESSETH: 
  
 WHEREAS, the Company wishes to assure itself and its key employees of continuity of management and objective judgment in the event of any actual or
contemplated Change in Control of the Company, and the Executive is a key employee of the Company or one of its subsidiaries and is an integral part of management of the Company (for purposes hereof employment with any present or future parent or
subsidiary corporation of the Company shall be considered employment by the Company); and 
  
 WHEREAS, this Agreement is not intended to materially alter the compensation and benefits that the Executive could reasonably expect to receive in the absence of a Change in Control of the Company, and this Agreement
accordingly will be operative only upon circumstances relating to an actual or anticipated change in control of the Company. 
  
 NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 
  
 I. OPERATION OF AGREEMENT 
  
 This Agreement shall be effective immediately upon its execution by the
parties hereto, but anything in this Agreement to the contrary notwithstanding, neither the Agreement nor any provision hereof shall be operative unless, during the term of this Agreement, there has been a Change in Control of the Company during the
term of this Agreement, all of the provisions hereof shall become operative immediately. 
  
 II. TERM OF AGREEMENT 
  
 The term of this Agreement shall be for an initial three (3) year period commencing on the date hereof; provided however that this Agreement shall be extended automatically for one (1) additional year at the end of this initial
term and at the end of each additional year thereafter, unless the Compensation Committee delivers written notice twelve (12) months prior to the end of such term, or extended term, to the Executive, that the Agreement will not be extended. In
such case, the Agreement will terminate at the end of the term, or extended term, then in progress. 
  
 However, in the event a Change in Control occurs during the original or any extended term, this Agreement will remain in effect until all obligations of
the Company hereunder have been fulfilled, and until all benefits required hereunder have been paid to the Executive. 
  
 III. DEFINITIONS 
  
 1. “Board” or “Board of Directors” - the Board of Directors of the Company. 
  
 2. “Cause” - either 
  
 (I) any act that constitutes, on the part of the Executive,
(A) fraud, dishonesty, a felony or gross malfeasance of duty, and (B) that directly results in material injury to the Company; or 
  
 (ii) conduct by the Executive in his office with the Company that is grossly inappropriate and demonstrably likely to lead to material
injury to the Company, as determined by the Board acting reasonably and in good faith; 
  
 provided, however, that in the case of (ii) above, such conduct shall not constitute Cause unless the Board shall have delivered to the Executive notice setting forth with specificity (A) the conduct deemed to qualify as Cause,
(B) reasonable action that would remedy such objection, and (c) a reasonable time (not less than thirty (30) days) within which the Executive may take such remedial action, and the Executive shall not have taken such specified
remedial action within such specified reasonable time. 

 3. “Change in Control” - Either 
  
 (i) the acquisition, directly or indirectly, by any
“person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1937, as amended), other than those persons in control of the Company as of the effective date of this Agreement, within any twelve
(12) month period of securities of the Company representing an aggregate of twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities; or 
  
 (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each new director was approved in advance by a vote of at least a majority of the directors then still
in office who were directors at the beginning of the period; or 
  
 iii) consummation of (a) a merger, consolidation or other business combination of the Company with any other “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended) or affiliate thereof, other than a merger, consolidation or business combination which would result in the outstanding common stock of the Company immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof) at least sixty (60)% of the outstanding common stock of the Company or such surviving entity or parent or affiliate thereof outstanding
immediately after such merger, consolidation or business combination, or (b) a plan of complete liquidation of the Company or an agreement for the sale of disposition by the Company of all or substantially all of the Company’s assets; or

  
 (iv) the occurrence of any other event or circumstance which
is not covered by (i) through (iii) above which the Board determines affects control of the Company and, in order to implement the purposes of this Agreement as set forth above, adopts a resolution that such event or circumstance
constitutes a Change in Control of the purposes of this Agreement. 
  
 4. “Code” - the Internal Revenue Code of 1986, as amended. 
  
 5. “Compensation Committee” - the Executive Compensation Committee of the Board of Directors of the Company, or any successor committee. 
  
 6. “Disability” - total and permanent disability under the Corporation’s long-term disability plan.

  
 7. “Excess Severance Payment” - the term
“Excess Severance Payment” shall have the same meaning as the term “excess parachute payment” defined in Section 280G(b)(1) of the Code. 
  
 8. “Involuntary Termination” - termination of the Executive’s employment by the Executive following a
Change in Control which, in the reasonable judgment of the Executive, is due to (i) a change of the Executive’s responsibilities, position (including status, office, title, reporting relationships or working conditions), authority or
duties (including changes resulting from the assignment to the Executive of any duties inconsistent with his positions, duties or responsibilities as in effect immediately prior to the Change in Control); or (ii) a reduction in the
Executive’s compensation or benefits as in effect immediately prior to the Change in Control, or (iii) a forced relocation of the Executive’s primary place of employment to a place more than fifty (50) miles from the
Executive’s primary place of employment immediately prior to the Change in Control. Involuntary Termination does not include Retirement, death or Disability of the Executive. 
  
 9. “Present Value” - The term “Present Value” shall have the same meaning as provided in
Section 280G(d)(4) of the Code. 
  
 10. “Severance
Payment” - The term “Severance Payment” shall have the same meaning as the term “parachute payment” defined in Section 280G(b)(2) of the Code. 
  
 11. “Reasonable Compensation” - The term “Reasonable Compensation” shall have the same meaning as
provided in Section 280G(b)(4) of the Code. 
  
 12.
“Retirement”- termination of employment at or after the Executive’s 65th birthday. 

 
 IV. BENEFITS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL

  
 1. Termination - The Executive shall be entitled
to, and the Company shall pay or provide to the Executive, the benefits described in Section 2 below if (a) a Change in Control occurs during the term of this Agreement, and (b) the Executive’s employment is terminated within
thirty (30) months following the Change in Control either (i) by the Company (other than for Cause 
  

 2 

 or by reason of the Executive’s Retirement, death or Disability) or (ii) by the Executive pursuant to
Involuntary Termination; provided, however, that if: 
  
 (a)
during the term of this Agreement there is a public announcement of a proposal for a transaction that, if consummated, would constitute a Change in Control or the Board receives and decides to explore an expression of interest with respect to a
transaction which, if consummated, would lead to a Change in Control (either transaction being referred to herein as the “Proposed Transaction”); and 
  

(b) the Executive’s employment is thereafter terminated by the Company other than for Cause or by reason of the Executive’s Retirement, death
or Disability; and 
  
 (c) the Proposed Transaction is consummated
within one (1) year after the date of termination of the Executive’s employment. 
  
 then, for the purposes of this Agreement, a Change in Control shall be deemed to have occurred during the term of this Agreement and the termination of the Executive’s employment shall be deemed to have occurred
within thirty (30) months following a Change in Control. 
  
 An executive shall also be entitled to receive the benefits described in Section 2 below if he terminates employment for any reason during a 30-day period beginning twelve months after the occurrence of a Change in Control. 

 
 2. Benefits to be Provided - If the Executive becomes eligible for
benefits under Section 1 above, the Company shall pay or provide to the Executive the benefits set forth in this Section 2. 
  
 (a) Salary - The Executive will continue to receive his current salary (subject to withholding of all applicable taxes and any amounts referred to
in Section 2(c) below) for a period of thirty (30) months from his date of termination in the same manner as it was being paid as of the date of termination; provided, however, that the salary payments provided for hereunder
shall be paid in a single lump sum payment, to be paid not later than thirty (30) days after his termination of employment; provided further, that the amount of such lump sum payment shall be determined by taking the salary payments to
be made and discounting them to their Present Value. For purposes hereof, the Executive’s “current salary” shall be the highest rate in effect during the six-month period prior to the Executive’s termination. 
  
 (b) Bonuses - The Executive shall receive payments from the Company
for the thirty (30) months following the month in which this employment is terminated in an amount for each such month equal to one-twelfth of the average of the bonuses earned by him for the two calendar years immediately preceding the year in
which such termination occurs. Any bonus amounts that the Executive had previously earned from the Company but which may not yet have been paid as of the date of termination shall not be affected by this provision, other than to serve as a
measurement for this portion of the severance benefit. The bonus amounts determined herein shall be paid in a single lump sum payment, to be paid not later than 30 days after termination of employment; provided, further, that the
amount of such lump sum payment shall be determined by taking the bonus payments (as of the payment date) to be made and discounting them to their Present Value. 
  
 (c) Health and Life Insurance Coverage - The health and life insurance benefits coverage provided to the Executive at
his date of termination shall be continued at the same level and in the same manner as if his employment had not terminated (subject to the customary changes in such coverages if the Executive retires or reaches age 65 or similar events), beginning
on the date of such termination and ending on the date thirty (30) months from the date of such termination. Any additional coverages the Executive had at termination, including dependent coverage, will also be continued for such period at the
same level and on the same terms as provided to the Executive immediately prior to his termination, to the extent permitted by the applicable policies or contract. Any costs Executive was paying for such coverages at the time of termination shall be
paid by the Executive by separate check payable to the Company each month in advance. If the terms of any benefit plan referred to in this Section do not permit continued participation by the Executive, then the Company will arrange for other
coverage at its expense providing substantially similar benefits as it can find for other officers in similar positions. 
  
 (d) Employee Retirement Plans - To the extent permitted by the applicable plan, the Executive will be fully vested in and will be entitled to
continue to participate, consistent with past practices, in all employee retirement plans maintained by the Company in effect as of his date of termination. The Executive’s participation in such retirement plans shall continue for a period of
thirty (30) months from the date of termination of his employment (at which point he will be considered to have terminated employment within the meaning of the plans) and the compensation payable to the executive under (a) and
(b) above shall be treated (unless otherwise excluded) as compensation under the plan. If full vesting and continued participation in any plan is not permitted, the Company shall pay to the executive and, if applicable, his beneficiary, a
supplemental benefit equal to the Present Value on the 
  

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 date of termination of employment of the excess of (i) the benefit the Executive would have been paid under such
plan if he had been fully vested and had continued to be covered for the 30-month period as if the Executive had earned compensation described under (a) and (b) above and had made contributions sufficient to earn the maximum matching
contribution, if any, under such plan (less any amounts he would have been required to contribute), over (ii) the benefit actually payable to or on behalf of the Executive under such plan. For purposes of determining the benefit under
(i) in the preceding sentence, contributions deemed to be made under a defined contribution plan will be deemed to be invested in the same manner as the Executive’s account under such plan at the time of termination of employment. The
Company shall pay such supplemental benefits (if any) in a lump sum. 
  
 (e) Career Counseling - The Company will provide career counseling and out placement services on an individual basis to the Executive as the Company deems appropriate and for a reasonable period following the Executive’s
termination of employment; provided, however, that the Company’s obligation to provide such services shall terminate at such time, if any, as the cost of such services exceeds $5,000. 
  
 (f) Effect of Lump Sum Payment - The lump sum payment under
(a) or (b) above shall not alter the amounts the Executive is entitled to receive under the benefit plans described in (c) and (d) above. Benefits under such plans shall be determined as if the Executive had remained employed and
received such payments over a period of thirty (30) months. 
  
 (g) Effect of Death or Retirement - The benefits payable or to be provided under this Agreement shall continue in the event of the Executive’s death and shall be payable to his estate or named beneficiary. The benefits payable
or to be provided under this Agreement shall cease in the event of the Executive’s election to commence Retirement benefits under the Company’s retirement plan. 
  
 (h) Total Benefit - Notwithstanding anything in this Agreement to the contrary, the Total Benefit payable or to be
provided to the Executive by the Company or an affiliate, whether pursuant to this Agreement or otherwise, shall be calculated so as to provide the greatest total benefit after taxes. The Company shall calculate, or authorize an independent third
party to calculate, the Executive’s Total Benefit under three different methods and make payment to the Executive according to the method that provides the Executive with the greatest total benefit after taxes. 
  
 (i) Total Benefit Calculation - The three methods of benefit
calculation shall include the Limited Benefit Method, the Unlimited Benefit Method and the Grossed Up Unlimited Benefit Method, as each is defined herein. Under the Limited Benefit Method, the Executive’s Total Benefit shall be determined as
defined in this Section IV and then modified or reduced to the extent necessary so that the benefits payable or to be provided to the Executive under this Agreement that are treated as Severance Payments, as well as any payments or benefits provided
outside of this Agreement that are so treated, shall not cause the Company to have paid an Excess Severance Payment. In computing such amount, the parties shall take into account all provisions of Internal Revenue Code Section 280G, including
making appropriate adjustments to such calculation for amounts established to be Reasonable Compensation. In the event that the amount of any Severance Payments that would be payable to or for the benefit of the Executive under this Agreement must
be modified or reduced, the Executive shall direct which Severance Payments are to be modified or reduced; provided, however, that no increase in the amount of any payment or change in the timing of the payment shall be made without
the consent of the Company. The Limited Benefit Method shall be interpreted so as to avoid the imposition of excise taxes on the Executive under Section 4999 of the Code or the disallowance of a deduction to the Company pursuant to
Section 280G(a) of the Code with respect to amounts payable under this Agreement or otherwise. The Executive shall be responsible for any and all federal and state income taxes associated with the Limited Benefit Method. Under the Unlimited
Benefit Method, the Total Benefit payable to the Executive shall be determined as defined in this Section IV and shall not be reduced or modified in any manner. The Executive shall be responsible for any and all income, excise and/or other taxes
associated with the Unlimited Benefit Method. Under the Grossed Up Unlimited Benefit Method, the Executive’s Total Benefit shall be determined as defined in this Section IV with no reduction, and an additional payment shall be made to the
Executive by the Company with such additional payment equal to the amount of any excise tax on the Total Benefit plus the estimated federal and state income taxes and any excise tax associated with the additional payment. 
  
 (j) No Obligation to Fund - The agreement of the Company (or its
successor) to make payments to the Executive hereunder shall represent solely the unsecured obligation of the Company (and its successor), except to the extent the Company (or its successors) in its sole discretion elects in whole or in part to fund
its obligations under this Agreement pursuant to a trust arrangement or otherwise. 
  
 V. MISCELLANEOUS 
  
 1.
Contract Non-Assignable - The parties acknowledge that this Agreement has been entered into due to, among other things, the special skills of the Executive, and agree that this Agreement may not be assigned or transferred by the Executive, in
whole or in part, without 
  

 4 

 the prior written consent of the Company. Any business entity succeeding to all or substantially all of the business of
the Company by purchase, merger, consolidation, sale of assets or otherwise, shall be bound by this Agreement. 
  
 2. Other Agents - Nothing in this Agreement is to be interpreted as limiting the Company from employing other personnel on such terms and
conditions as may be satisfactory to the Company. 
  
 3.
Notices - All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or seven days after mailing if mailed, first class, certified mail,
postage prepaid: 
  

			
	To the Company:	  	Community Bancshares, Inc.
	 	  	            P. O. Box 1000
	 	  	            Blountsville, Alabama 35031
		
	To the Executive:	  	John W. Brothers
	 	  	            30 Bellerive Drive
	 	  	            Oneonta, Alabama 35121

  
 Any party may change the address to
which notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein. 
  
 4. Provisions Severable - If any provision or covenant, or any part thereof, of this Agreement should be held by any
court to be invalid, illegal or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, of
this Agreement, all of which shall remain in full force and effect. 
  
 5. Waiver - Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making the waiver. 
  
 6. Amendments and Modifications - This Agreement may be amended or
modified only by a writing signed by both parties hereto, which makes specific reference to this Agreement. 
  
 7. Governing Law - The validity and effect of this Agreement shall be governed by and construed and enforced in accordance with the laws of the
State of Alabama. 
  
 8. Arbitration of Disputes; Expenses
- The parties agree that all disputes that may arise between them relating to the interpretation or performance of this Agreement, including matters relating to any funding arrangements for the benefits provided under this Agreement, shall be
determined by binding arbitration through an arbitrator approved by the American Arbitration Association or other arbitrator mutually acceptable to the parties. The award of the arbitrator shall be final and binding upon the parties and judgment
upon the award rendered may be entered in any court having jurisdiction. In the event the Executive incurs legal fees and other expenses in seeking to obtain or to enforce any such rights or benefits through settlement, arbitration or otherwise, the
Company shall promptly pay the Executive’s reasonable legal fees and expenses incurred in enforcing this Agreement. Except to the extent provided in the preceding sentence, each party shall pay its own legal fees and other expenses associated
with the arbitration, provided that the fee for the arbitrator shall be shared equally. 
  
 9. Indemnity - The Executive shall be entitled to the benefits of the indemnity currently applicable to the Executive, if any, as provided by the Company’s articles of incorporation or bylaws. Any changes
to the articles of incorporation or bylaws reducing the indemnity granted to officers shall not affect the rights granted hereunder. The Company may not reduce these indemnity benefits confirmed to the Executive hereunder without the written consent
of the Executive. 
  
 10. Termination of Prior Agreements -
The Executive hereby agrees to a mutual termination, effective as of the effective date of this Agreement, of any prior existing change in control agreements (by whatever name), providing benefits to the Executive upon a termination of employment
following a Change in Control of the Company, to which he and the Company are parties, and as to such prior agreements, if any, the Executive releases all claims, rights and entitlements. 
  

 5 

 11. Regulatory Approvals - The Agreement, and the rights and obligations of the parties hereto,
shall be subject to approval of the same by any and all regulatory authorities having jurisdiction over the Company, to the extent such approval is required by law, regulation, or order. 
  
 12. Regulator Intervention - Notwithstanding any term of this Agreement to the contrary, this Agreement is subject to
the following terms and conditions: 
  
 (a) The Company’s
obligations to provide compensation or other benefits to Executive under this Agreement may be suspended if the Company has been served with a notice of charges by the appropriate federal banking agency under provisions of Section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818) directing the Company to cease making payments required hereunder; provided, however, that 
  
 (I) The Company shall seek in good faith with its best efforts to oppose such notice of charges as to which there are reasonable defenses;

  
 (ii) In the event the notice of charges is
dismissed or otherwise resolved in a manner that will permit the Company to resume its obligations to provide compensation or other benefits hereunder, the Company shall immediately resume such payments and shall also pay Executive the compensation
withheld while the contract obligations were suspended, except to the extent precluded by such notice; and 
  
 (iii) During the period of suspension, the vested rights of the contracting parties shall not be affected, except to the extent precluded
by such notice. 
  
 (b) The Company’s obligations to provide
compensation or other benefits to Executive under this Agreement shall be terminated to the extent a final order has been entered by the appropriate federal banking agency under provisions of Section 8 of the Federal Deposit Insurance Act (12
U.S.C. 1818) directing the Company not to make the payments required hereunder; provided, however, that the vested rights of the contracting parties shall not be affected by such order, except to the extent precluded by such order. 
  
 (c) The Company’s obligations to provide compensation or other benefits
to Executive under this Agreement shall be terminated or limited to the extent required by the provisions of any final regulation or order of the Federal Deposit Insurance Company promulgated under Section 18(k) of the Federal Deposit Insurance
Act (12 U.S.C. 1828(k)) limiting or prohibiting any “golden parachute payment” as defined therein, but only to the extent that the compensation or payments to be provided under this Agreement are so prohibited or limited. 
  
 (d) Notwithstanding the foregoing, the Company shall not be required to make
any payments under this Agreement prohibited by law. 
  
 IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officers and the Executive has hereunto set his hand, as of the date and year first above written. 
  

			
	COMMUNITY BANCSHARES, INC.
		
	By:	 	 /s/ Patrick M. Frawley

	 	 	Chairman, President and
	 	 	Chief Executive Officer

  

	
	 Attest:
  

	  
 /s/ William H. Caughran

	Secretary

  
 (CORPORATE SEAL) 
  

 6 

  

			
	EXECUTIVE	 	 
		
	 /s/ John W. Brothers

	 	(SEAL)
	 John W. Brothers
	 	 

  

 7

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