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                                                                     EXHIBIT 2.4


               AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER

                                  DATED AS OF

                                  MAY 16, 2000

                                 BY AND BETWEEN

                     BINGHAM FINANCIAL SERVICES CORPORATION

                                      AND

                              FRANKLIN BANK, N.A.

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               AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER

     This Amended and Restated Agreement and Plan of Merger, dated May 16, 2000
(the "Agreement"), is entered into by and between BINGHAM FINANCIAL SERVICES
CORPORATION, a Michigan corporation ("Bingham") and FRANKLIN BANK, N.A., a
national banking association ("Bank"). Bingham and Bank are referred to
collectively in this Agreement as the "Parties" and individually as a "Party".

                                   RECITALS:

     A. The Parties have entered into an Agreement and Plan of Merger dated
March 19, 2000, which they desire to amend and restate in its entirety in
accordance with the terms and conditions of this Agreement.

     B. The Parties desire to merge Bank with and into Bingham Bank, a
federally-chartered savings association to be formed as a wholly-owned
subsidiary of Bingham ("Merger Sub"), with Merger Sub to be the surviving
entity, as a wholly-owned subsidiary of Bingham (the "Merger").

     C. The respective boards of directors of each of the Parties have
determined that it is in the best interests of their respective companies and
their shareholders to consummate the Merger.

     D. The Parties intend that the Merger be treated as a tax-free
"reorganization" under Section 368(a)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code").

     In consideration of the premises and of the mutual covenants,
representations, warranties and agreements contained in this Agreement, the
Parties agree as follows:

                                   ARTICLE I

                              CERTAIN DEFINITIONS

     The following terms are used in this Agreement with the meanings set forth
below:

     "Affiliate" has the meaning ascribed to it in Rule 12(b)(2) promulgated
under the Exchange Act.

     "Agreement" means this Agreement, as amended or modified from time to time.

     "Attendant Documents" has the meaning set forth in Section 4.01(a).

     "BAC" has the meaning set forth in Section 4.02(a).

     "Bank" has the meaning set forth in the preamble to this Agreement.

     "Bank Act" means the Bank Conservation Act, 12 U.S.C. sec.201 et. seq., as
amended.

     "Bank Arrangements" has the meaning set forth in Section 5.12.

     "Bank Board" means the board of directors of Bank.

     "Bank Common Stock" means the common stock, par value $1.00 per share, of
Bank.

     "Bank Employee Benefit Plan" means any Pension Plan, Welfare Plan and any
bonus, severance, deferred compensation, annuity, retirement, stock option,
stock purchase, executive compensation, incentive compensation, educational
assistance, insurance or other plan, policy or arrangement providing benefits to
employees of Bank, its Subsidiaries or any Controlled Group Member or with
respect to which Bank or any of its Subsidiaries has any liability or potential
liability, including, if Bank, its Subsidiaries or any Controlled Group Member
is organized under foreign law, any similar plan allowed by any foreign law, and
including any multi-employer plan (as defined in Section 3(37) of ERISA).

     "Bank Material Adverse Effect" means, with respect to Bank, any effect that
(i) is material and adverse to the financial position, results of operations,
business, or operations of Bank and its Subsidiaries taken as a whole, or (ii)
would materially impair the ability of Bank to perform its obligations under
this

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Agreement or otherwise materially impede the consummation of the Merger;
provided, however, that Bank Material Adverse Effect shall not be deemed to
include the impact of (a) changes in thrift, banking and similar laws of general
applicability or interpretations thereof by Governmental Authorities, or other
changes affecting depository institutions generally, including changes in
general economic conditions and changes in prevailing interest and deposit
rates, (b) changes in generally accepted accounting principles or regulatory
accounting requirements applicable to thrifts, banks and their holding companies
generally, (c) any modifications or changes to valuation policies and practices
or restructuring charges, in each case taken pursuant to this Agreement by Bank
or its Subsidiaries and in such event only in accordance with generally accepted
accounting principles, (d) changes resulting from expenses (such as legal,
accounting and investment bankers' fees) incurred in connection with this
Agreement and (e) actions or omissions of Bank taken with the prior written
consent of Bingham in contemplation of the transactions contemplated hereby.

     "Bank Meeting" has the meaning set forth in Section 5.04.

     "Bank SEC Documents" has the meaning set forth in Section 4.01(c).

     "Bank Stock" means all of the authorized capital stock of Bank.

     "Bank Stock Option" has the meaning set forth in Section 3.06(a).

     "Bank Stock Plans" means the [1983] Franklin Savings and Loan Association
Directors Stock Option Plan, the [1986] Franklin Savings and Loan Association
Directors Stock Option Plan, the [1994] Franklin Bank, N.A. Directors Stock
Option Plan, the [1986] Franklin Bank Key Executive Stock Option Plan and the
[1994] Franklin Bank, N.A. Key Executive Incentive Stock Option Plan.

     "Ben Properties" means Ben Properties, Inc., a Michigan corporation, and a
wholly owned subsidiary of Bank.

     "Bingham" has the meaning set forth in the preamble to this Agreement.

     "Bingham Board" means the board of directors of Bingham.

     "Bingham Common Stock" means the common stock, without par value, of
Bingham.

     "Bingham Employee Benefit Plan" means any Pension Plan, Welfare Plan and
any bonus, severance, deferred compensation, annuity, retirement, stock option,
stock purchase, executive compensation, incentive compensation, educational
assistance, insurance or other plan, policy or arrangement providing benefits to
employees of Bingham, its Subsidiaries or any Controlled Group Member or with
respect to which Bingham or any of its Subsidiaries has any liability or
potential liability, including, if Bingham, its Subsidiaries or any Controlled
Group Member is organized under foreign law, any similar plan allowed by any
foreign law, and including any multiemployer plan (as defined in Section 3(37)
of ERISA).

     "Bingham Material Adverse Effect" means, with respect to Bingham, any
effect that (i) is material and adverse to the financial position, results of
operations, business, or operations of Bingham and its Subsidiaries taken as a
whole, or (ii) would materially impair the ability of Bingham to perform its
obligations under this Agreement or otherwise materially impede the consummation
of the Merger; provided, however, that Bingham Material Adverse Effect shall not
be deemed to include the impact of (a) any modifications or changes to valuation
policies and practices or restructuring charges, in each case taken pursuant to
this Agreement by Bingham or its Subsidiaries, taken pursuant to the DFI
Restructuring Plan and in such event, only in accordance with generally accepted
accounting principles, (b) changes resulting from expenses (such as legal,
accounting and investment bankers' fees) incurred in connection with this
Agreement and (c) actions or omissions of Bingham taken with the prior written
consent of Bank in contemplation of the transactions contemplated hereby.

     "Bingham Meeting" has the meaning set forth in Section 5.04.

     "Bingham SEC Documents" has the meaning set forth in Section 4.02(c).

     "Bingham Stock" means all of the authorized capital stock of Bingham.


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     "Bingham Stock Plan" means the First Amended and Restated Bingham Financial
Services 1997 Stock Option Plan.

     "BSC" has the meaning set forth in Section 4.02(a).

     "Closing" has the meaning set forth in Section 7.01.

     "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.

     "Code" has the meaning set forth in the Recitals to this Agreement.

     "Controlled Group" means (A) a controlled group of corporations as defined
in Section 414(b) of the Code; (B) a group of trades or businesses under common
control as defined in Section 414(c) of the Code; (C) an affiliated service
group as defined in Section 414(m) of the Code; (D) a group of businesses
referred to in Section 414(o) of the Code; (E) a group of trades or businesses
under common control as defined in Section 4001(b) of ERISA; or (F) any other
group under the law, rules or regulations of a foreign country similar to (A)
through (E).

     "Controlled Group Member" means a corporation, trade or business that is a
part of the same Controlled Group as Bank or Bingham, as applicable.

     "DFI" has the meaning set forth in Section 4.02(a).

     "DFI Alabama" has the meaning set forth in Section 4.02(a).

     "DIA" has the meaning set forth in Section 4.02(a).

     "DFI Restructuring Plan" means Bingham's plan for restructuring the
manufactured home lending businesses, the material terms of which are set forth
on Schedule 5.02(a).

     "DOL" means the United States Department of Labor.

     "Effective Date" has the meaning set forth in Section 7.01.

     "Effective Time" has the meaning set forth in Section 7.01.

     "Environmental Laws" shall mean any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any Governmental
Authority relating to (i) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental Concern.
The term Environmental Law includes without limitation (i) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended; the Resource
Conservation and Recovery Act, as amended; the Clean Air Act, as amended; the
Federal Water Pollution Control Act, as amended; the Toxic Substances Control
Act, as amended; the Emergency Planning and Community Right to Know Act; the
Safe Drinking Water Act; and all comparable state and local laws, and (ii) any
common law (including without limitation common law that may impose strict
liability) that may impose liability or obligations for injuries or damages due
to, or threatened as a result of, the presence of or exposure to any Materials
of Environmental Concern.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "ESOP" means the Franklin Bank, N.A. Employee Stock Ownership Plan.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.

     "Exchange Agent" has the meaning set forth in Section 3.04(a).

     "Exchange Fund" has the meaning set forth in Section 3.04(a).

     "Exchange Ratio" has the meaning set forth in Section 3.01(a).

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     "FDIC" means the Federal Deposit Insurance Corporation.

     "FRB" means the Board of Governors of the Federal Reserve System.

     "Franklin Finance" means Franklin Finance Corporation, a Michigan
corporation, and a wholly-owned subsidiary of Bank.

     "Franklin Home" means Franklin Home Lending Group, Inc., a Michigan
corporation, and a wholly-owned subsidiary of Bank.

     "Governing Documents" means, with respect to any Person other than an
individual, such Person's articles of incorporation, articles of organization,
articles of association, charter, partnership agreement, operating agreement,
bylaws, or similar governing documents, as applicable.

     "Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.

     "Holding Company" means the holding company of the Surviving Subsidiary
after the Merger, whether or not such holding company is known as Bingham
Financial Services Corporation.

     "Holding Company Board" means the board of directors of the Holding
Company.

     "IRS" means the Internal Revenue Service.

     "Knowledge" means the actual knowledge of any director, executive officer,
or officer of Bank and its Subsidiaries or Bingham and its Subsidiaries, as
applicable, or the existence of any facts which any of such persons reasonably
should be expected to know, had any of them conducted a reasonable investigation
into the matter.

     "Lien" means any title defect, judgment, objection, security interest,
lien, charge, liability, right of redemption, option, mortgage, easement,
restriction, reservation, tenancy, agreement or other obligation or encumbrance
of any nature whatsoever other than (a) mechanic's, materialmen's, and similar
liens, (b) liens for taxes not yet due and payable, (c) purchase money liens and
liens securing rental payments under capital lease arrangements, and other liens
arising in the ordinary course of business and not incurred in connection with
borrowings of money.

     "Material Contract" means any agreement or series of related agreements
entered into by a Party or any of its Subsidiaries or by which a Party or any of
its Subsidiaries is bound that (i) requires aggregate payments in any
consecutive 12 month period by or to the Party or its Subsidiary of more than
$50,000 and (ii) is not terminable by the Party or its Subsidiary upon notice of
30 days or less; provided, however, that mortgage loans made in the ordinary
course of business shall not be deemed to be Material Contracts.

     "Materials of Environmental Concern" shall mean pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.

     "Merger" has the meaning set forth in the Recitals to this Agreement.

     "Merger Consideration" means the consideration to be issued to holders of
Bank Common Stock in the Merger.

     "Merger Sub" has the meaning set forth in the Recitals to this Agreement.

     "NASD" means the National Association of Securities Dealers, Inc.

     "NASDAQ National Market" means The Nasdaq National Market System.

     "NASDAQ SmallCap" means The Nasdaq SmallCap Market.

     "New Certificates" has the meaning set forth in Section 3.04(a).

     "1999 Financial Statements" means the internally prepared balance sheets of
the Bank and its Subsidiaries as of December 31, 1999 and the related statements
of income and expenses, retained earnings and cash flows for the 12 months then
ended heretofore delivered to Bingham and its auditors.

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     "1999 Work Papers" means the work papers of Grant Thornton LLP relating to
the audit of the financial statements of the Bank and is Subsidiaries as of, and
for the year ended, December 31, 1999.

     "OCC" means the Office of the Comptroller of the Currency.

     "Old Certificates" has the meaning set forth in Section 3.04(a).

     "ordinary course of business" and "business in the ordinary and usual
course" and like phrases shall include, with respect to Bingham and its
Subsidiaries, the sale of loans, in bulk or otherwise, and the securitization of
loans.

     "OTS" means the Office of Thrift Supervision.

     "OTS Charter" has the meaning set forth in Section 5.08(b).

     "Pension Plan" means any employee pension benefit plan as defined in
Section 3(2) of ERISA.

     "Person" means any individual, bank, corporation, partnership, limited
liability company, association, joint-stock company, trust or unincorporated
organization.

     "Proxy Statement" has the meaning set forth in Section 5.05(a).

     "Raymond James" has the meaning set forth in Section 4.01(p).

     "Registered Shares" has the meaning set forth in Section 3.04(b).

     "Registration Statement" has the meaning set forth in Section 5.05(a).

     "Regulator" means the Governmental Authority which will have regulatory
authority over the Surviving Subsidiary after the Merger, to be mutually agreed
upon by the Parties before the Effective Time.

     "Regulatory Authority" has the meaning set forth in Section 4.01(e).

     "Representatives" means, with respect to any Person, such Person's
guardians, conservators, agents, personal representatives, directors, officers,
employees, accountants, legal or financial advisors or any representatives of
such legal or financial advisors.

     "Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such Person.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

     "Severance Agreements" means those agreements set forth on Schedule
5.14(b).

     "Severance Payments" means all cash payments that could become payable on
or before the Effective Date, or within three years of the Effective Date, under
the Severance Agreements.

     "Shareholder Approvals" has the meaning set forth in Section 5.04.

     "Subsidiary" has the meaning ascribed to it in Rule 1-02 of Regulation S-X
of the SEC.

     "Surviving Subsidiary" has the meaning set forth in Section 2.01(a).

     "Surviving Subsidiary Board" means the board of directors of the Surviving
Subsidiary.

     "Takeover Laws" has the meaning set forth in Section 5.09.

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     "Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with any Governmental Authority with respect to
any Tax.

     "Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts, in each case imposed by any taxing or
Governmental Authority whether arising before, on or after the Effective Date.

     "trading-day" means a day that securities are being traded on the NASDAQ
SmallCap.

     "Treasury Stock" shall mean shares of Bank Stock held by Bank or any of its
Subsidiaries or Bingham Stock held by Bingham or any of its Subsidiaries, in
each case other than in a fiduciary capacity or as a result of debts previously
contracted in good faith.

     "Walk Away Date" means December 31, 2000.

     "Welfare Plan" means any employee welfare benefit plan as defined in
Section 3(1) of ERISA.

                                   ARTICLE II
                                   THE MERGER

     Section 2.01 The Merger.

          (a) Merger. Before the Effective Time, Bingham will cause Merger Sub
     to be formed as a wholly-owned subsidiary of Bingham. At the Effective
     Time, Bank will merge with and into Merger Sub, the separate corporate
     existence of Bank will cease and Merger Sub will survive and continue to
     exist as the surviving entity in the Merger. Merger Sub, as the surviving
     entity in the Merger, is sometimes referred to in this Agreement as the
     "Surviving Subsidiary".

          (b) Conditions to Effectiveness of Merger. The Merger shall be subject
     to the satisfaction or waiver of the conditions set forth in Article VI.

          (c) Effects of Merger. The Merger shall have the effects set forth in
     this Agreement as well as those prescribed under applicable law.

          (d) Governing Documents of Surviving Subsidiary. The Governing
     Documents of Merger Sub in effect immediately before the Effective Time
     will be those of the Surviving Subsidiary immediately after the Effective
     Time.

          (e) Principal Office. The location of the principal office of the
     Surviving Subsidiary in the State of Michigan will be 24725 W. 12 Mile
     Road, Southfield, MI 48034.

          (f) Corporate Structure. Before the Effective Time, Bingham and Bank
     will mutually determine whether Bingham's subsidiaries will be direct
     subsidiaries of the Holding Company or will be direct subsidiaries of the
     Surviving Subsidiary after the Merger is consummated.

          (g) Regulation and Name. Bingham and Bank will mutually agree before
     the Effective Time as to which Governmental Authority will be the
     Regulator. The Surviving Subsidiary will be named "Franklin Bank".

     Section 2.02 Right to Revise Transaction. Bingham and Bank may at any time
before the Effective Time mutually change the method of effecting the Merger or
change any of the determinations to be made or actions to be taken under
Sections 2.01(d) or 2.01(f), if and to the extent they deem that change to be
necessary, appropriate or desirable to (a) ensure that the Merger be treated as
a tax-free

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reorganization under Section 368(a)(2)(D) of the Code, or (b) obtain the
approval of the Regulator to the Merger. In the event the Regulator shall be
other than the OTS, the rights and obligations of the Bank and the Merger Sub
under this Agreement may be assigned so as to cause the rights and obligations
of the Bank and the Merger Sub under this Agreement to be placed in entities
that come under the jurisdiction of the Regulator.

                                  ARTICLE III

                       CONSIDERATION; EXCHANGE PROCEDURES

     Section 3.01 Merger Consideration. Subject to the provisions of this
Agreement, at the Effective Time, automatically by virtue of the Merger and
without any action on the part of any Person:

          (a) Outstanding Bank Common Stock. Except for Bank Common Stock owned
     of record by Bingham immediately before the Effective Time and Treasury
     Stock, each share of Bank Common Stock issued and outstanding immediately
     before the Effective Time shall become and be converted into the right to
     receive 1.525 shares of Bingham Common Stock (the "Exchange Ratio").

          (b) Outstanding Bingham Common Stock. Each share of Bingham Common
     Stock issued and outstanding or held in treasury immediately before the
     Effective Time shall remain issued and outstanding or held in treasury and
     will be unaffected by the Merger.

          (c) Cancellation of Shares. Each share of Bank Common Stock held as
     Treasury Stock immediately before the Effective Time and each share of Bank
     Common Stock owned of record by Bingham immediately before the Effective
     Time will be canceled and retired at the Effective Time, and no
     consideration will be issued in exchange for that Treasury Stock or Bank
     Common Stock owned by Bingham.

     Section 3.02 Rights as Shareholders; Stock Transfers. At the Effective
Time, holders of Bank Stock will cease to be, and will have no rights as,
shareholders of Bank, other than to receive the consideration provided under
this Article III. After the Effective Time, there shall be no transfers of
shares of Bank Stock on the stock transfer books of Bank or the Surviving
Subsidiary.

     Section 3.03 Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of Bingham Common Stock and no certificates or
scrip therefor, or other evidence of ownership thereof, will be issued in the
Merger. Instead, Bingham will pay to each holder of Bank Common Stock who would
otherwise be entitled to a fractional share of Bingham Common Stock (after
taking into account all Old Certificates delivered by such holder) an amount in
cash (without interest) determined by multiplying the fraction by the closing
per share sale price of Bingham Common Stock on NASDAQ SmallCap for the last
trading day immediately preceding the Effective Date.

     Section 3.04 Exchange Procedures.

          (a) Deposit of New Certificates, Etc. At or before the Effective Time,
     Bingham shall deposit, or shall cause to be deposited, with an independent
     exchange agent (the "Exchange Agent") to be mutually selected by Bingham
     and Bank before the Effective Time, for the benefit of the holders of
     certificates formerly representing shares of Bank Common Stock ("Old
     Certificates"), for exchange in accordance with this Article III,
     certificates representing the shares of Bingham Common Stock ("New
     Certificates") and an amount of cash (that cash and New Certificates,
     together with any dividends or distributions with a record date occurring
     after the Effective Date with respect thereto (without any interest on any
     of that cash, dividends or distributions), is referred to as the "Exchange
     Fund") to be paid pursuant to this Article III in exchange for outstanding
     shares of Bank Common Stock.

          (b) Transmittal and Deliveries. As soon as practicable after the
     Effective Date (but in no event later than 15 days following the Effective
     Date), Bingham shall send or cause to be sent to each former holder of
     record of shares of Bank Common Stock immediately before the Effective Time

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     transmittal materials (which shall specify that risk of loss and title to
     Old Certificates shall pass only upon acceptance of those Old Certificates
     by Bingham or the Exchange Agent) for use in exchanging the shareholder's
     Old Certificates for Merger Consideration. Bingham will cause the New
     Certificates or uncertificated shares of Bingham Common Stock registered on
     the stock transfer books of Bingham ("Registered Shares") into which shares
     of a shareholder's Bank Common Stock are converted on the Effective Date or
     any check in respect of any fractional share interest or dividends or
     distributions which that person is entitled to receive to be delivered to
     that shareholder upon delivery to the Exchange Agent of Old Certificates
     representing the shares of Bank Common Stock (or indemnity reasonably
     satisfactory to Bingham and the Exchange Agent, if any of the certificates
     are lost, stolen or destroyed) owned by that shareholder. No interest will
     be paid on any cash to be paid in lieu of a fractional share interest or in
     respect of dividends or distributions that any person is entitled to
     receive under this Article III upon delivery. Bingham and the Exchange
     Agent will be entitled to rely upon the stock transfer books of Bank to
     identify persons entitled to receive Merger Consideration, which books
     shall be conclusive with respect to establishing the identify of those
     persons. If a dispute arises with respect to ownership of stock represented
     by any Old Certificate, Bingham or the Exchange Agent will be entitled to
     deposit any consideration in respect of that stock in escrow with an
     independent third party and thereafter be relieved with respect to any
     claims to that consideration.

          (c) Escheat. Notwithstanding the foregoing, neither the Exchange Agent
     nor any Party will be liable to any former holder of Bank Stock for any
     amount properly delivered to a public official under applicable abandoned
     property, escheat or similar laws.

          (d) Restrictions on the Payment of Dividends and Voting. No dividends
     or other distributions with respect to Bingham Common Stock with a record
     date after the Effective Time will be paid to the holder of any
     unsurrendered Old Certificates converted into the right to receive shares
     of Bingham Common Stock until the holder of the Old Certificates becomes
     entitled to receive New Certificates or Registered Shares in exchange under
     the procedures set forth in this Section 3.04. After becoming so entitled
     in accordance with this Section 3.04, the record holder of the Old
     Certificates will be entitled to receive any dividends or other
     distributions, without any interest, that before that time had become
     payable with respect to shares of Bingham Common Stock the holder had the
     right to receive upon surrender of the Old Certificates. Registered holders
     of unsurrendered Old Certificates will be entitled to vote after the
     Effective Time at any meeting of Bingham shareholders with a record date at
     or after the Effective Time the number of whole shares of Bingham Common
     Stock represented by those Old Certificates, regardless of whether those
     holders have exchanged their Old Certificates.

          (e) Return of Exchange Fund to Bingham. Any portion of the Exchange
     Fund that remains unclaimed by the shareholders of Bank for 12 months after
     the Effective Time will be paid to Bingham. Any shareholder of Bank who has
     not complied with this Article III after that 12-month period may look only
     to Bingham for payment of Merger Consideration and unpaid dividends and
     distributions on Bingham Common Stock deliverable in respect of shares of
     Bank Common Stock that shareholder holds as determined under this
     Agreement, in each case, without any interest.

     Section 3.05 [intentionally omitted]

     Section 3.06 Options.

          (a) Conversion. At the Effective Time, each option outstanding on the
     date of this Agreement to purchase shares of Bank Common Stock under the
     Bank Stock Plans (each, a "Bank Stock Option") and remaining outstanding
     immediately before the Effective Time will, at the Effective Time, be
     assumed by Bingham and will continue to be outstanding. Each Bank Stock
     Option will be converted into an option to purchase shares of Bingham
     Common Stock in an amount and at an exercise price determined as provided
     below (and otherwise subject to the terms of the applicable Bank Stock Plan
     and Bank Stock Option, as they may be amended from time to time):

             (i) the number of shares of Bingham Common Stock to be subject to
        the continuing Bank Stock Option will be equal to the product of (A) the
        number of shares of Bank Common Stock

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        subject to the Bank Stock Option immediately before the Effective Time
        and (B) the Exchange Ratio, provided that any fractional share of
        Bingham Common Stock resulting from that multiplication will be rounded
        down to the nearest whole share; and

             (ii) the exercise price per share of Bingham Common Stock under the
        continuing Bank Stock Option will be equal to (A) the exercise price per
        share of Bank Common Stock under the Bank Stock Option immediately
        before the Effective Time divided by (B) the Exchange Ratio, provided
        that the exercise price will be rounded down to the nearest cent.

          The conversion of Bank Stock Options will be undertaken consistent
     with and in a manner that will not constitute a "modification" under
     Section 424 of the Code as to any Bank Stock Option that is an "incentive
     stock option". Notwithstanding the foregoing, the Parties agree that the
     Bank Stock Options and Bank Stock Plans will be treated as set forth in the
     attached Schedule 5.01(f); provided that such treatment shall not result in
     the Holding Company or the Surviving Subsidiary having any liability as a
     result of changing the tax treatment in connection with the Bank Stock
     Options or the exercise thereof.

          (b) Reservation of Bingham Common Stock and Securities Filings. At all
     times after the Effective Time, Bingham will reserve for issuance the
     number of shares of Bingham Common Stock necessary to permit the exercise
     of continuing options in the manner contemplated by this Agreement and the
     documents under which those options were granted. Bingham will make all
     filings required under federal and state securities laws including without
     limitation a filing with the SEC on Form S-8, promptly after the Effective
     Time so as to permit the exercise of the continuing options and the sale of
     the shares received by the optionee upon exercise of the options. Bingham
     will continue to make all such filings necessary to permit the continued
     exercise of continuing options.

          (c) Amendment of Bingham Stock Option Plan. At the Bingham Meeting,
     Bingham will present to its shareholders for approval before the Effective
     Time a proposal to amend the Bingham Stock Plan to increase the number of
     shares of Bingham Common Stock available under the Bingham Stock Plan to a
     number sufficient to enable grants thereunder to be made to any specified
     group of officers, directors and/or employees of Bingham, the Holding
     Company and the Surviving Subsidiary before or after the Effective Time.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

     Section 4.01 Representations and Warranties of Bank. Bank hereby represents
and warrants to Bingham, both as of the date of this Agreement and as of the
Effective Date, with the knowledge and expectation that, in agreeing to enter
into this Agreement, Bingham is relying on, and in connection with the
consummation of the transactions contemplated in this Agreement, will rely on,
such representations and warranties:

          (a) Good Standing and Authority. Bank is a national banking
     association, duly organized, validly existing and in good standing under
     the Bank Act. Franklin Finance is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Michigan.
     Franklin Home is a corporation duly organized, validly existing and in good
     standing under the laws of the State of Michigan. Ben Properties is a
     corporation duly organized, validly existing and in good standing under the
     laws of the State of Michigan. Each of Bank and its Subsidiaries is duly
     qualified to do business as a foreign corporation and is in good standing
     in each jurisdiction in which it is required to be so qualified other than
     where a failure to so qualify would not have a Bank Material Adverse
     Effect. Each such jurisdiction is listed on Schedule 4.01(a). Bank has all
     requisite power and authority to enter into this Agreement and any and all
     documents contemplated in this Agreement (the "Attendant Documents") to
     which it is a party and to consummate the transactions contemplated in this
     Agreement and the Attendant Documents. This Agreement and all of the
     Attendant Documents to which Bank is a party, and the consummation of the
     transactions contemplated in this Agreement,


                                       10
<PAGE>   11

     have been or will be, on or prior to the Effective Date, duly authorized
     and approved by the Bank Board and all other necessary and proper corporate
     action on the part of Bank has been or will be taken on or prior to the
     Effective Date. This Agreement, and all of the Attendant Documents to which
     Bank is a party, when executed and delivered, will constitute legal, valid
     and binding obligations of Bank enforceable against it in accordance with
     their respective terms.

          (b) Consents and Approvals; No Defaults.

             (i) To the knowledge of Bank, except as set forth on Schedule
        4.01(b), no consent, approval or authorization of, or designation,
        declaration or filing with, or notice to, any Governmental Authority, or
        any lenders, lessors, creditors, shareholders or others, is required on
        the part of Bank or its Subsidiaries in connection with the valid
        execution and delivery of this Agreement and the Attendant Documents or
        the consummation of the transactions contemplated in this Agreement and
        the Attendant Documents except where the failure to obtain such consent,
        approval, authorization, designation, declaration or filing would not
        have a Bank Material Adverse Effect. Before the Effective Time, Bank and
        its Subsidiaries (in cooperation with Bingham, as applicable) shall
        properly obtain, perform or give all of the consents, approvals,
        authorizations, designations, declarations, filings and notices set
        forth on Schedule 4.01(b), and as of the Effective Time, Bank shall have
        given Bingham's counsel copies or adequate evidence of all such
        consents, approvals, authorizations, designations, declarations, filings
        and notices.

             (ii) Subject to the receipt or making of the consents, approvals,
        authorizations, designations, declarations, filings and notices referred
        to in the preceding paragraph, and expiration of related waiting
        periods, and required filings under federal and state securities laws,
        the execution, delivery and performance of this Agreement and the
        consummation of the Merger do not and will not: (i) (A) constitute a
        breach or violation of, or a default under, or give rise to any Lien,
        any acceleration of remedies or any right of termination under, any law,
        rule or regulation or any judgment, decree, order, governmental permit
        or license, or agreement, license, indenture or instrument of Bank or of
        any of its Subsidiaries or to which Bank or any of its Subsidiaries or
        properties is subject or bound, (B) constitute a breach or violation of,
        or a default under, Bank's Governing Documents, (C) require any consent
        or approval under any such law, rule, regulation, judgment, decree,
        order, governmental permit or license, agreement, license, indenture or
        instrument or (D) result in any penalty payment relating to borrowed
        funds, advances or financial instruments; and (ii) have a Bank Material
        Adverse Effect.

          (c) Financial Reports, SEC Documents, and Material Adverse Effect.

             (i) Bank's Form 10-K for the period ending December 31, 1998 and
        all other reports, registration statements, definitive proxy statements
        or information statements filed or to be filed by it or any of its
        Subsidiaries subsequent to December 31, 1998 under the Securities Act or
        the Exchange Act, in the form filed or to be filed with the SEC or the
        OCC (collectively, "Bank SEC Documents"), as of the date filed, (A)
        complied or will comply in all material respects with the applicable
        requirements under the Securities Act or the Exchange Act, as the case
        may be, and (B) did not and will not contain any untrue statement of a
        material fact or omit to state a material fact required to be stated
        therein or necessary to make the statements therein, in light of the
        circumstances under which they were made, not misleading; and each of
        the balance sheets or statements of condition contained in or
        incorporated by reference into any such SEC Document (including the
        related notes and schedules thereto), and each of the statements of
        income or results of operations and changes in shareholders' equity and
        cash flows or equivalent statements in the Bank SEC Documents (including
        any related notes and schedules thereto), have been prepared, in each
        case, in accordance with generally accepted accounting principles
        consistently applied during the periods involved, except in each case as
        may be noted therein, subject to normal year-end audit adjustments and
        the absence of footnotes in the case of unaudited statements.

                                       11
<PAGE>   12

             (ii) The 1999 Financial Statements have been prepared in accordance
        with generally accepted accounting principals applied consistently with
        the audited statements of the Bank and its Subsidiaries subject only to
        normal year-end adjustments and the absence of footnotes.

             (iii) Except as set forth on Schedule 4.01(c), and except for
        liabilities incurred in connection with negotiation of and compliance
        with this Agreement and otherwise in connection with the transactions
        contemplated hereby, since December 31, 1999 to the date hereof, Bank
        and its Subsidiaries have not incurred any material liability other than
        in the ordinary course of business consistent with past practice which
        would constitute a Bank Material Adverse Effect.

             (iv) Except as set forth on Schedule 4.01(c), since December 31,
        1999, (A) Bank and its Subsidiaries have to the date hereof conducted
        their respective businesses in the ordinary and usual course consistent
        with past practice (excluding matters related to this Agreement and the
        transactions contemplated hereby) and (B) there has not occurred any
        event or circumstance that, individually or taken together with all
        other facts, circumstances and events, would constitute a Bank Material
        Adverse Effect.

          (d) Litigation. Except as set forth on Schedule 4.01(d), no material
     litigation, claim or other proceeding before any Governmental Authority is
     pending against Bank or any of its Subsidiaries and, to Bank's Knowledge,
     no such litigation, claim or other proceeding has been threatened.

          (e) Regulatory Matters.

             (i) Except as set forth on Schedule 4.01(e), neither Bank nor any
        of its Subsidiaries or properties is a party to or is subject to any
        order, decree, agreement, memorandum of understanding or similar
        arrangement with, or a commitment letter to, or extraordinary
        supervisory letter from, any federal or state Governmental Authority or
        authority charged with the supervision or regulation of financial
        institutions and trust companies (or their holding companies) or issuers
        of securities or engaged in the insurance of deposits (including,
        without limitation, the FRB, the OCC, and the FDIC) or the supervision
        or regulation of it or any of its Subsidiaries (collectively, the
        "Regulatory Authorities").

             (ii) Except as set forth on Schedule 4.01(e), neither Bank nor any
        of its Subsidiaries has been advised by any Regulatory Authority that
        such Regulatory Authority is contemplating issuing or requesting (or is
        considering the appropriateness of issuing or requesting) any such
        order, decree, agreement, memorandum of understanding, commitment
        letter, or extraordinary supervisory letter.

          (f) Compliance with Laws. Except as set forth on Schedule 4.01(f), and
     except for violations and acts of noncompliance that would not have a Bank
     Material Adverse Effect, each of Bank and its Subsidiaries:

             (i) to Bank's knowledge, is in material compliance with all
        applicable federal, state, local and foreign statutes, laws,
        regulations, ordinances, rules, judgments, orders or decrees applicable
        thereto or to the employees conducting such businesses, including,
        without limitation, the Equal Credit Opportunity Act, the Fair Housing
        Act, the Community Reinvestment Act of 1977, the Home Mortgage
        Disclosure Act and all other applicable fair lending laws and other laws
        relating to discriminatory business practices; and

             (ii) has received, since December 31, 1998, no notification or
        communication from any Governmental Authority (A) asserting that Bank or
        any of its Subsidiaries is not in compliance in any material respect
        with any of the statutes, regulations, or ordinances which such
        Governmental Authority enforces or (B) threatening to revoke any
        material license, franchise, permit, or governmental authorization (nor,
        to Bank's Knowledge, do any grounds for any of the foregoing exist).

                                       12
<PAGE>   13

          (g) Loan Portfolio; Portfolio Management.

             (i) Except as set forth on Schedule 4.01(g) all evidences of
        indebtedness reflected as assets in Bank's financial statements at
        December 31, 1999 referred to in Section 4.01(c) hereof, or originated
        or acquired since such date, are (except with respect to those assets
        which are no longer assets of it or any of its Subsidiaries) binding
        obligations of the respective obligors named therein except as
        enforcement may be limited by bankruptcy, insolvency or other similar
        laws affecting the enforcement of creditors' rights generally, and
        except as to the availability of equitable remedies, including specific
        performance, which are subject to the discretion of the court before
        which a proceeding is brought, and except where a failure of enforcement
        will not have a Bank Material Adverse Effect, and the payment of no
        material amount thereof (either individually or in the aggregate with
        other evidences of indebtedness) is subject to any defenses or offsets
        which have been threatened or asserted against Bank or any of its
        Subsidiaries which would collectively constitute a Bank Material Adverse
        Effect. All such indebtedness which is secured by an interest in real
        property is secured by a valid and perfected mortgage lien having the
        priority specified in the loan documents except in each case in which,
        individually or in the aggregate, the failure to have such a mortgage
        would not have a Bank Material Adverse Effect. All such indebtedness
        which is secured by an interest in personal property is secured by a
        valid and perfected security interest having the priority specified in
        the loan documents, except in each case in which, individually or in the
        aggregate, the failure to have such a security interest would not have a
        Bank Material Adverse Effect. Except as set forth on Schedule 4.01(g) or
        except where noncompliance would not have a Bank Material Adverse
        Effect, all loans originated, directly or indirectly, or purchased by
        Bank or any of its Subsidiaries were, at the time entered into and at
        all times owned by Bank or its Subsidiaries, in compliance in all
        material respects with all applicable laws and regulations (including,
        without limitation, all consumer protection laws and regulations).
        Except where noncompliance would not have a Bank Material Adverse
        Effect, Bank and its Subsidiaries (as applicable), in all material
        respects, administer their loan and investment portfolios (including,
        but not limited to, adjustments to adjustable mortgage loans) in
        accordance with all applicable laws and regulations and the terms of
        applicable instruments. Except where noncompliance would not have a Bank
        Material Adverse Effect, the records of Bank and any of its Subsidiaries
        (as applicable) regarding all loans outstanding on its books are
        accurate in all material respects. With respect to loans for which real
        property is the primary collateral, the Bank and its Subsidiaries (as
        applicable) maintain or require all borrowers to maintain adequate
        insurance on the security property and pay or cause all borrowers, to
        pay all taxes or assessments which may be entitled to a Lien with
        priority over the Bank's Lien in such property. The Bank maintains
        insurance against its failure or the borrower's failure to maintain
        insurance and pay taxes or assessments.

             (ii) Schedule 4.01(g) sets forth a list, accurate and complete in
        all material respects, of the aggregate amounts of loans, extensions of
        credit and other assets of Bank and its Subsidiaries that have been
        adversely designated, criticized or classified by Bank, its outside
        auditors or the OCC as of November 30, 1999, separated by category of
        classification or criticism (the "Bank Asset Classification"); and no
        amounts of loans, extensions of credit or other assets that have been
        adversely designated, classified or criticized as of the date hereof, by
        any representative of any governmental or regulatory authority as
        "Special Mention," "Substandard," "Doubtful," "Loss" or words of similar
        import are excluded from the amounts disclosed in the Bank Asset
        Classification other than amounts of loans, extensions of credit or
        other assets that were charged off by Bank or any of its Subsidiaries
        before the date hereof.

          (h) Permits and Licenses. Bank and each of its Subsidiaries has all
     franchises, permits, licenses or other authorizations by all Governmental
     Authorities, and has made all filings, applications and registrations with,
     all Governmental Authorities that are required in order to permit them to
     own or lease their properties and to conduct their businesses as presently
     conducted except where the failure to obtain such franchises, permits,
     licenses or other authorizations would not have a Bank Material

                                       13
<PAGE>   14

     Adverse Effect. Schedule 4.01(h) lists all franchises, permits, licenses or
     other authorizations by all Governmental Authorities held by Bank and its
     Subsidiaries ("Bank Licenses"), true and complete copies of all of which
     have been delivered to Bingham. Except as set forth on Schedule 4.01(h),
     all of the Bank Licenses are in full force and effect and will not be
     affected in any way by, and will continue to be in full force and effect
     after, the consummation of the transactions contemplated in this Agreement
     and the Attendant Documents to the extent necessary to complete any
     required governmental approvals of the transactions contemplated in this
     Agreement and the Attendant Documents, and to permit continuous business
     operations following consummation of the transactions contemplated.

          (i) Labor Matters.

             (i) Schedule 4.01(i) contains a complete and accurate list of the
        current employees of Bank and its Subsidiaries as of a date no later
        than 30 days before this representation and warranty is made (the "Bank
        Employees") and, with respect to each Bank Employee, his or her salary
        or hourly rate currently in effect, annual bonuses (last paid or
        payable), if any, any other fringe benefits or incentive paid or payable
        to him or her and the amount of all cash compensation accrued through
        February 29, 2000, but as yet unpaid for each such Bank Employee. Except
        as set forth on Schedule 4.01(i), all such Bank Employees are actively
        at work, and no such Bank Employee is currently on leave of absence,
        layoff, military leave, suspension, workers' compensation, salary
        continuance or short or long term disability or otherwise not actively
        performing his or her work during all normally scheduled business hours.

             (ii) Except as set forth on Schedule 4.01(i), neither Bank nor any
        of its Subsidiaries is a party to or is bound by any collective
        bargaining agreement, contract or other agreement or understanding with
        a labor union or labor organization, nor is Bank or any of its
        Subsidiaries the subject of a proceeding asserting that it or any such
        Subsidiary has committed an unfair labor practice (within the meaning of
        the National Labor Relations Act) or seeking to compel Bank or any such
        Subsidiary to bargain with any labor organization as to wages or
        conditions of employment, nor is there any strike or other labor dispute
        involving Bank or any of its Subsidiaries pending or, to Bank's
        Knowledge, threatened, nor does Bank have any Knowledge of any activity
        involving any Bank Employee seeking to certify a collective bargaining
        unit or engaging in other organizational activity.

             (iii) To the knowledge of Bank, except as set forth on Schedule
        4.01(i), hours worked by, and payments made to, all Bank Employees and
        former employees of Bank and its Subsidiaries ("Former Bank Employees")
        have been in compliance with the Fair Labor Standards Act and other
        applicable federal, state and local laws.

             (iv) Except as set forth on Schedule 4.01(i), as of the Effective
        Date, all payments determined to be due from Bank and its Subsidiaries
        on account of any Bank Employee's or Former Bank Employees' work, health
        or welfare insurance, under any agreement, whether oral or written, will
        have been paid or properly accrued on Bank's financial statements.

             (v) Except as set forth on Schedule 4.01(i), there are no vacation
        monies or rights to time off which have been earned by any Bank Employee
        or Former Bank Employee under any agreement, whether oral or written,
        that have not been paid or properly accrued on Bank's financial
        statements, nor are there any severance payments which could become
        payable by Bank or its Subsidiaries under the terms of any oral or
        written agreement or commitment.

             (vi) Except as disclosed pursuant to Section 4.01(j), neither Bank
        nor any of its Subsidiaries has any material liability with respect to
        any pension, profit sharing, retirement or similar plan, or other
        employee benefit plan.

                                       14
<PAGE>   15

             (vii) Except as set forth on Schedule 4.01(i):

                (A) there is no unfair labor practice charge or complaint
           concerning Bank or its Subsidiaries or any Bank Employee or Former
           Bank Employee pending before any Governmental Authority in any
           jurisdiction in which Bank or its Subsidiaries conduct business;

                (B) there is no labor strike or slowdown, work stoppage, lockout
           or other collective labor action actually pending or, to Bank's
           Knowledge, threatened against or affecting the business of Bank or
           its Subsidiaries, and neither Bank nor its Subsidiaries has
           experienced any strike or slowdown, work stoppage, lockout or other
           collective labor action in connection with their business by or with
           respect to any Bank Employees or Former Bank Employees;

                (C) there is no representation claim or petition concerning the
           business of Bank or its Subsidiaries or any Bank Employee or Former
           Bank Employee pending before any Governmental Authority in any
           jurisdiction in which the business of Bank or its Subsidiaries
           conduct business, and no question concerning representation exists
           relating to the Bank Employees;

                (D) there are no charges with respect to or relating to the
           business of Bank or its Subsidiaries pending before the Equal
           Employment Opportunity Commission or any Governmental Authority in
           any jurisdiction in which Bank or its Subsidiaries conduct business
           responsible for the prevention of unlawful employment practices;

                (E) neither of Bank nor its Subsidiaries has received formal
           notice from any Governmental Authority responsible for the
           enforcement of labor or employment laws of an intention to conduct an
           investigation of Bank or its Subsidiaries and no such investigation
           is currently in progress; and

                (F) to Bank's Knowledge, no key Bank Employee or group of Bank
           Employees has any plans to terminate employment with Bank or its
           Subsidiaries prior to or after Closing.

          (j) Employee Benefits.

             (i) Controlled Group: Except as disclosed in Schedule 4.01(j),
        neither Bank nor any of its Subsidiaries is now, has ever been or will
        be at any time prior to the Effective Time, a member of a Controlled
        Group.

             (ii) Bank Employee Benefit Plans and Documents: Schedule 4.01(j)
        lists each and every Bank Employee Benefit Plan that Bank, its
        Subsidiaries or any Controlled Group Member now, or will at any time
        prior to the Effective Date, maintain, sponsor, participate in or
        contribute to with respect to the Bank Employees or the Former Bank
        Employees, or that Bank, its Subsidiaries or any Controlled Group Member
        ever maintained, sponsored, participated in or made contributions to
        with respect to the Bank Employees or the Former Bank Employees. Except
        as disclosed in Schedule 4.01(j), neither Bank nor any of its
        Subsidiaries or any Controlled Group Member is a party to any collective
        bargaining or union contract with respect to the Bank Employees or the
        Former Bank Employees. Bank has provided to Bingham true and correct
        copies of all current and prior material and readily available documents
        relating to the Bank Employee Benefit Plans listed in Schedule 4.01(j),
        including, but not limited to: (A) plan documents, trust documents and
        plan and trust amendments, in each case, which implement, relate to or
        amend a Bank Employee Benefits Plan; (B) summary plan descriptions,
        amendments thereto, and all other communication material provided to
        employees; (C) summaries of material modifications; (D) insurance
        (including reinsurance), administrative services or annuity contracts;
        (E) collective bargaining agreements or contracts and all amendments
        thereto; (F) the most recent financial statements; (G) with regard to
        self-funded Welfare Plans, experience and enrollment data for the prior
        three plan years as well as documentation and calculations demonstrating
        the preset value of accrued obligations under such plans as of the
        Effective Date;

                                       15
<PAGE>   16

        (H) if Bank or its Subsidiaries provide, or have any commitment or
        obligation to provide, any Bank Employee Benefit Plan benefits to their
        retirees, copies of all documentation and calculations demonstrating the
        present value of such obligation or commitment as of the Effective Date;
        (I) if Bank, its Subsidiaries or any Controlled Group Member maintains a
        defined benefit pension plan, as defined in Section 3(35) of ERISA with
        respect to the Bank Employees or the Former Bank Employees, the most
        recent actuarial valuation for each such plan and copies of any funding
        waivers and applications therefor, and all related correspondence and
        documentation; (J) the three most recent annual reports; (K) agreements
        with respect to leased or temporary employees; (L) all government
        rulings and opinions, if any (and pending requests for rulings and
        opinions, if any); and (M) the most recent IRS determination letters
        with respect to the Bank Employee Benefit Plans listed in Schedule
        4.01(j).

             (iii) No Minimum Funding Obligations; No Multiemployer Plan,
        Multiple Employer Plan or Post-Employment Welfare Plan Liability. No
        Bank Employee Benefit Plan is a, and none of Bank, any of its
        Subsidiaries or any Controlled Group Member has any material liability
        or potential liability (including, with respect to clauses (B) and (C)
        of this paragraph any actual or potential withdrawal liability)with
        respect to any, (A) Pension Plan that is subject to the minimum funding
        requirements of Section 412 of the Code or Section 302 of ERISA, (B)
        multiemployer plan (as such term is defined in Section 3(37) of ERISA),
        (C) plan of the type described in Sections 4063 and 4064 of ERISA or in
        Section 413(c) of the Code (and regulations promulgated thereunder), or
        (D) plan which provides health, life insurance, accident or other
        "welfare-type" benefits to current or future retirees or current or
        future former employees, their spouses or dependents, other than in
        accordance with Section 4980B of the Code, Part 6 of Subtitle B of Title
        I of ERISA or applicable state continuation coverage law.

             (iv) Representations: Except as set forth in Schedule 4.01(j):

                (A) Qualification: All the Pension Plans required to be listed
           on Schedule 4.01(j), and the related trusts, if any, now meet, and
           since their inception have met, and as of the Effective Date shall
           meet, in all material respects, the requirements for qualification
           under Section 401(a) of the Code and are now, and since their
           inception have been, exempt from taxation under Section 501(a) of the
           Code;

                (B) Determination Letters: The IRS has issued a favorable
           determination letter with respect to the qualified status of each
           such Pension Plan and trust, and has not taken, nor to the Knowledge
           of Bank, its Subsidiaries and Controlled Group Members, has
           reasonable grounds to take any action to revoke such letter;

                (C) Satisfaction of Obligations: Bank, each of its Subsidiaries
           and each Controlled Group Member have performed, and through the
           Effective Date shall perform, in all material respects, all
           obligations required to be performed by them under the Bank Employee
           Benefit Plans (including, but not limited to, the making of all
           contributions), and are not in material default under, or in material
           violation of, any of the Bank Employee Benefit Plans, and none of
           Bank, its Subsidiaries, or any Controlled Group Member has Knowledge
           of any such material default or violation of any other party to any
           and all of the Bank Employee Benefit Plans;

                (D) Compliance With Laws: Each Bank Employee Benefit Plan has
           been, and through the Effective Date shall be, maintained, and funded
           in compliance in all material respects with ERISA, the Code, the Age
           Discrimination in Employment Act (to the extent applicable), COBRA,
           and each other applicable federal, state or local laws, and, if
           applicable, each foreign law, and each Bank Employee Benefit Plan is
           valid and binding, in full force and effect, and there are no
           material defaults thereunder;

                (E) No Prohibited Transactions: None of the Bank Employee
           Benefit Plans, nor any trust created thereunder, any trustee or
           administrator thereof, nor Bank or any of its

                                       16
<PAGE>   17

           Subsidiaries, nor any other Party dealing with any Bank Employee
           Benefit Plan has engaged in any transaction, or will prior to the
           Effective Date engage in any transaction, that would trigger a tax
           under Section 4975 of the Code, or violate Section 406 of ERISA, or,
           if applicable, any similar provision under foreign law;

                (F) No Claims Pending or Threatened: There are not presently,
           nor shall there be prior to the Effective Date, any actions, suits or
           claims pending (other than routine claims for benefits) or, to Bank's
           Knowledge, threatened against, any Bank Employee Benefit Plan,
           against the assets of any Bank Employee Benefit Plan, or against the
           Bank, any of its Subsidiaries or any Controlled Group Member for
           benefits arising under or pursuant to any Bank Employee Benefit Plan;

                (G) Reporting and Disclosure: With regard to each Bank Employee
           Benefit Plan listed in Schedule 4.01(j), Bank and its Subsidiaries
           have complied with, and will through the Effective Date continue to
           comply with, all reporting and disclosure requirements of ERISA and
           the Code in all material respects;

                (H) No Unfunded Liabilities: No Bank Employee Benefit Plan has
           any material unfunded liabilities;

                (I) No Further Liabilities: Except as provided in Schedule
           4.01(j), Bank and its Subsidiaries do not, and shall not as of the
           Effective Date, have any liability or obligation to any Bank Employee
           Benefit Plan or to the Pension Benefit Guaranty Corporation, DOL,
           Department of Treasury or similar agency of a foreign government, any
           other plan or entity, or any employee, participant or beneficiary of
           any Bank Employee Benefit Plan, arising out of or pursuant to any
           Bank Employee Benefit Plan which could subject Bank or its
           Subsidiaries to any material liability;

                (J) Termination and Amendment: Except as disclosed in Schedule
           4.01(j), each Bank Employee Benefit Plan listed in Schedule 4.01(j)
           is, and as of and through the Effective Date, shall be terminable,
           and/or subject to amendment by Bank or its Subsidiaries, at the
           discretion of Bank or its Subsidiaries, with no liability for
           benefits incurred after such termination or inconsistent with the
           terms of any amendment after its effective date.

                (K) Change of Control Payments: Except as set forth in Schedule
           4.01(j), none of the Bank Employee Benefit Plans obligates Bank or
           any of its Subsidiaries to pay separation, severance, termination or
           similar-type benefits solely as a result of any transaction
           contemplated by this Agreement or solely as a result of a "change in
           control," as such term is contemplated by Section 280G of the Code.

             (v) ESOP. None of the execution, delivery and performance of this
        Agreement, or the consummation of the transactions, contemplated hereby
        shall violate or conflict with any governing document of the ESOP, any
        contract, agreement or other arrangement binding upon the ESOP or its
        assets or any statute, regulation or other provision of law applicable
        to the ESOP in any material respect. During the five years preceding the
        date hereof, there has not been any action, suit, proceeding,
        investigation, audit, or order against or affecting the ESOP at law or
        in equity, or before or by any federal, state, municipal or other
        governmental department, commission, board, bureau, agency or
        instrumentality, domestic or foreign. The ESOP is not subject to or
        bound by any outstanding orders, judgments or decrees of any court or
        governmental entity.

          (k) Tax Matters.

             (i) Except as would not cause a Bank Material Adverse Effect or
        except as set forth on Schedule 4.01(k):

                (A) Bank, each of its Subsidiaries, each of their affiliated
           groups and each of the entities identified on Schedule 4.01(k)
           pursuant to Section 4.01(k)(ii)(B) (the "Bank
                                       17
<PAGE>   18

           Predecessors") have filed all Tax Returns which they are required to
           file under applicable laws and regulations, and all such Tax Returns
           are complete and correct and have been prepared in compliance with
           all applicable laws and regulations;

                (B) Bank, each of its Subsidiaries, each of their affiliated
           groups and each of the Bank Predecessors have paid all Taxes due and
           owing by them (whether or not such Taxes are required to be shown on
           a Tax Return) and have withheld and paid over to the appropriate
           taxing authority all Taxes which they are required to withhold from
           amounts paid or owing to any employee, shareholder, creditor or other
           third party;

                (C) neither Bank or its Subsidiaries, nor any of their
           affiliated groups or the Bank Predecessors have waived any statute of
           limitations with respect to any Taxes or agreed to any extension of
           time with respect to any Tax assessment or deficiency;

                (D) the accrual for Taxes on Bank's most recent audited balance
           sheet would be adequate to pay all Tax liabilities of Bank and its
           Subsidiaries if their current tax year were treated as ending on the
           date of such balance sheet (excluding any amount recorded which is
           attributable solely to timing differences between book and Tax
           income);

                (E) since December 31, 1998, neither Bank nor any of its
           Subsidiaries has incurred any liability for Taxes with respect to
           their businesses other than in the ordinary course;

                (F) no foreign, federal, state or local tax audits or
           administrative or judicial proceedings are pending or being conducted
           with respect to Bank, any of its Subsidiaries, any of their
           affiliated groups or any of the Bank Predecessors;

                (G) neither Bank or its Subsidiaries, nor any of their
           affiliated groups or the Bank Predecessors have received from any
           foreign, federal, state or local taxing authority any (1) written
           notice indicating an intent to open an audit or other review, or (2)
           request for information related to Tax matters; and

                (H) there are no material unresolved questions or claims
           concerning any Tax liability of Bank, its Subsidiaries, or any of
           their affiliated groups or the Bank Predecessors.

             (ii) Except as set forth on Schedule 4.01(k), neither Bank nor any
        of its Subsidiaries (A) has made an election under Section 341(f) of the
        Code, (B) is liable for the Taxes of another person (1) under Treasury
        Regulation Section 1.1502-6 (or comparable provisions of state, local or
        foreign law), (2) as a transferee or successor, (3) by contract or
        indemnity or (4) otherwise, (C) is a party to any tax sharing agreement
        or (D) has made any payments, are obligated to make any payments or is a
        party to an agreement that could obligate it to make any payments that
        would not be deductible under Section 280G of the Code.

          (l) Environmental Matters. To Bank's Knowledge, neither the conduct
     nor operation of Bank or its Subsidiaries nor any condition of any property
     currently or previously owned or operated by any of them (including,
     without limitation, in a fiduciary or agency capacity), or on which any of
     them holds a Lien, results or resulted in a violation of any Environmental
     Laws and to Bank's Knowledge, no condition has existed or event has
     occurred with respect to any of them or any such property that, with notice
     or the passage of time, or both, is reasonably likely to result in any
     liability to Bank or any of its Subsidiaries under or by reason of any
     Environmental Laws or Materials of Environmental Concern except where the
     conduct, operation, condition or event would not have a Bank Material
     Adverse Effect. To Bank's Knowledge, except for any notice for which, in
     Bank's reasonable judgment, there is no reasonable basis, neither Bank nor
     any of its Subsidiaries has received any notice from any person or entity
     that Bank or its Subsidiaries or the operation or condition of any property
     ever owned, operated, or held as collateral or in a fiduciary capacity by
     any of them are or were in violation of or otherwise are alleged to have
     liability under any Environmental Law or relating to Materials of
     Environmental Concern, including, but not limited to, responsibility (or
     potential

                                       18
<PAGE>   19

     responsibility) for the cleanup or other remediation of Materials of
     Environmental Concern at, on, beneath, or originating from any such
     property.

          (m) Risk Management Instruments. Except as set forth on Schedule
     4.01(m), all material interest rate swaps, caps, floors, option agreements,
     futures and forward contracts and other similar risk management
     arrangements, whether entered into for Bank's own account, or for the
     account of one or more of Bank's Subsidiaries or their customers have been
     previously disclosed to Bingham and were entered into (i) in accordance
     with prudent business practices and in all material respects in compliance
     with all applicable laws, rules, regulations and regulatory policies and
     (ii) with parties believed to be financially responsible at the time; and
     each of them constitutes the valid and legally binding obligation of Bank
     or one of its Subsidiaries, enforceable in accordance with its terms
     (except as enforceability may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium, fraudulent transfer and similar
     laws of general applicability relating to or affecting creditors' rights or
     by general equity principles), and is in full force and effect. Neither
     Bank nor its Subsidiaries, nor to Bank's Knowledge any other party thereto,
     is in breach of any of its obligations under any such agreement or
     arrangement in any material respect.

          (n) Insurance. Except as set forth on Schedule 4.01(n), Bank and its
     Subsidiaries have maintained and now maintain insurance with respect to
     their assets and businesses covering property damage by fire or other
     casualty, and against such liabilities, claims and risks, including,
     without limitation, workers compensation, and in such amounts as is
     customary or appropriate in the industry. Schedule 4.01(n) contains a true
     and correct summary of all such insurance policies maintained by Bank and
     its Subsidiaries, presently or at any point during the last five years,
     setting forth the names of the insured and the insurer, policy numbers, the
     types of coverage, premium payments or basis of payment, deductible amounts
     and limits of coverage. Except as set forth on Schedule 4.01(n), to the
     knowledge of Bank no such policy of insurance is subject to any deductible,
     self-insured retention, retrospective rating agreement, indemnification
     agreement or any other method or device by which the insured person is
     subject to all or any part of the liability for any or all claims.
     Concurrently with or prior to the execution of this Agreement, Bank and its
     Subsidiaries have delivered to Bingham true, correct and complete copies of
     all such insurance policies. Except as set forth on Schedule 4.01(n), all
     such insurance policies will be in full force and effect through the
     Effective Date. To the knowledge of Bank, except as set forth on Schedule
     4.01(n), there is no state of facts and no event has occurred forming the
     basis for any present property, casualty or fidelity claim against Bank or
     its Subsidiaries that is not fully covered by insurance. Schedule 4.01(n)
     contains loss runs for the last five years setting forth all property,
     general and products liability and workers compensation claim activity
     against the businesses of Bank and its Subsidiaries, including the date and
     place of the occurrence, the claimant's name, reserves, amounts paid, a
     brief description of the incident and whether the claim is open or closed.
     Except as set forth on Schedule 4.01(n), Bank has no Knowledge of any
     occurrence, circumstance, or event which could reasonably be expected to
     result in any such claim.

          (o) Governmental Reviews. Except as set forth on Schedule 4.01(o), no
     investigation or review by any Governmental Authority with respect to Bank,
     any Bank Subsidiary or any of their officers or directors is pending or, to
     the Knowledge of Bank, threatened, nor has any Governmental Authority
     indicated to Bank or any Bank Subsidiary an intention to conduct the same,
     other than normal or routine regulatory examinations.

          (p) Fairness Opinion. On March 19, 2000, Raymond James & Associates,
     Inc. ("Raymond James") provided to the Bank Board a written fairness
     opinion to the effect that the Exchange Ratio is fair to the shareholders
     of Bank from a financial point of view.

          (q) Compliance with Servicing Obligations. Except as set forth on
     Schedule 4.01(q), and except for violations and acts of noncompliance that
     would not have a Bank Material Adverse Effect, to the best of Bank's
     Knowledge, Bank and the Bank Subsidiaries are in compliance in all material
     respects with all contract, agency and investor requirements and
     guidelines, and all applicable laws, rules and

                                       19
<PAGE>   20

     regulations of Governmental Authorities, relating to the servicing and
     administration of loans by them, or any of them, including but not limited
     to, properly and timely making interest rate adjustments to adjustable rate
     loans.

          (r) Intellectual Property. Schedule 4.01(r) sets forth all patents,
     trade names, service names, trademarks, service marks, copyrights, or any
     other intellectual or intangible property or applications ("Intellectual
     Property") Bank and its Subsidiaries own or use in their businesses ("Bank
     Intellectual Property"). Bank and its Subsidiaries are the sole owners
     (except for licensed property for which valid and subsisting licenses
     exist) of the Bank Intellectual Property, free of all Liens. Except as set
     forth on Schedule 4.01(r), to Bank's Knowledge, there is no claim against
     Bank or any of its Subsidiaries that the Bank Intellectual Property or any
     of its operations, activities, products or publications infringes any
     material patent, trademark, trade name, copyright or other proprietary or
     intellectual property right of any third party or that any of them is
     illegally using the material trade secrets or property rights of others in
     any material respect. To the knowledge of Bank, neither Bank nor any of its
     Subsidiaries has any disputes with or claims against, or any basis for
     claims against, any third party for infringement by such third party of any
     Bank Intellectual Property.

          (s) Material Contracts. Schedule 4.01(s) identifies all of the
     Material Contracts of Bank and its Subsidiaries, true and complete copies
     of all of which have been delivered to Bingham. Except as set forth on
     Schedule 4.01(s), and except for any default which would not constitute a
     Bank Material Adverse Effect, (i) Bank and each of its Subsidiaries has
     complied in all material respects with the provisions of, and is not in
     default under, each such Material Contract to which it is a party or any
     such default has been waived, and (ii) to the Knowledge of Bank, no other
     party to any such Material Contract has failed to comply in any material
     respect with, or is in default under, the provisions of any such Material
     Contract.

          (t) Real Property Owned.

             (i) Other than the real property described on Schedule 4.01(t)(the
        "Bank Owned Real Property") or real property of a type classified as
        OREO (other real estate owned) on the Bank's financial statements (i.e.,
        foreclosed property not owned for the operation of the Bank's business),
        Bank and its Subsidiaries own no real property. Schedule 4.01(t)
        contains a true and accurate legal description of the Bank Owned Real
        Property. Bank and its Subsidiaries have good and marketable fee simple
        title to the Bank Owned Real Property free and clear of all Liens other
        than those identified on Schedule 4.01(t).

             (ii) Except as set forth on Schedule 4.01(t), no substantial work
        has been performed on or materials supplied with respect to the Bank
        Owned Real Property within any applicable statutory period which could
        give rise to mechanics' or materialmen's liens; all bills and claims for
        substantial labor performed and materials furnished to or for the
        benefit of the Bank Owned Real Property for all periods prior to the
        Effective Time have been, or prior to the Effective Time, will be, paid
        or properly accrued on Bank's financial statements in full, and Bank has
        no Knowledge of any mechanics' or materialmen's Liens, whether or not
        perfected, on or affecting any portion of the Bank Owned Real Property.

             (iii) There is no pending or, to Bank's Knowledge, threatened
        condemnation or eminent domain proceeding with respect to the Bank Owned
        Real Property.

             (iv) Except as set forth on Schedule 4.01(t), (A) there are no
        taxes or special assessments other than ordinary real estate taxes
        pending or payable against the Bank Owned Real Property, and to the
        knowledge of Bank there are no contingencies existing under which any
        assessment for real estate taxes may be retroactively filed against the
        Bank Owned Real Property; (B) Bank has no Knowledge of any proposed
        special assessment that may affect the Bank Owned Real Property or any
        part thereof; (C) there are no penalties due with respect to real estate
        taxes and/or impositions, and all real estate taxes and/or impositions
        (excepting those for the current year that are not yet due and payable)
        with respect to the Bank Owned Real Property have been

                                       20
<PAGE>   21

        paid in full; and (D) there are no taxes, permit fees or connection fees
        which must be paid respecting existing curb cuts, sewer hookups,
        water-main hookups or services of a like nature.

             (v) Except as set forth on Schedule 4.01(t), the Bank Owned Real
        Property materially complies with the requirements of all building,
        zoning, subdivision, health, safety, environmental, pollution control,
        waste products, sewage control and all other applicable statutes, laws,
        codes, ordinances, rules, orders, regulations and decrees of any and all
        government agencies. There is no uncured breach of any material
        condition or requirement imposed by, or pursuant to, any permit or
        license issued with respect to the Bank Owned Real Property.

             (vi) Except as set forth on Schedule 4.01(t), no property insurer
        or similar body has made any recommendations with respect to any parcel
        of Bank Owned Real Property which have not been complied with, and all
        structures on the Bank Owned Real Property meet all qualifications for
        "highly protected risk" classification for fire insurance purposes.

             (vii) Except as set forth on Schedule 4.01(t), and except for real
        property of the type classified as OREO (other real estate owned) on the
        Bank's financial statements (i.e., foreclosed property not owned for the
        operation of the Bank's business), Bank and its Subsidiaries have never
        owned any real property.

          (u) Real Property Leased. Schedule 4.01(u) sets forth the legal
     description for all real properties leased or subleased to Bank or its
     Subsidiaries (the "Bank Leased Real Property"). Bank has delivered to
     Bingham true, correct and complete copies of the leases and subleases
     listed on Schedule 4.01(u). Except as set forth on Schedule 4.01(u),
     neither Bank nor any of its Subsidiaries has leased or subleased any real
     property during the past three years. Except as set forth on Schedule
     4.01(u), with respect to each such lease or sublease:

             (i) the lease or sublease is legal, valid, binding, enforceable and
        in full force and effect in all material respects;

             (ii) the lease or sublease will continue to be legal, valid,
        binding, enforceable and in full force and effect in all material
        respects on identical terms following the Closing;

             (iii) neither Bank, its Subsidiaries, nor, to Bank's Knowledge, any
        other party to the lease or sublease is in breach or default, and no
        event has occurred which, with notice or lapse of time, would constitute
        such a breach or default or permit termination, modification or
        acceleration under the lease or sublease;

             (iv) to Bank's Knowledge, no party to the lease or sublease has
        repudiated any of its provisions;

             (v) there are no material disputes, oral agreements or forbearance
        programs in effect as to the lease or sublease;

             (vi) neither Bank nor any of its Subsidiaries, as applicable, has
        assigned, transferred, conveyed, mortgaged, deeded in trust or
        encumbered all or any portion of their interest in the leasehold or
        subleasehold;

             (vii) to Bank's Knowledge, all facilities leased or subleased under
        the lease or sublease have been operated and maintained in accordance
        with applicable laws, rules and regulations in all material respects;

             (viii) all facilities leased or subleased under the lease or
        sublease are supplied with utilities and other services reasonably
        necessary for the operation of such facilities;

             (ix) all facilities leased or subleased under the lease or sublease
        are in good operating condition, and would not, with ordinary wear and
        tear, require major repair or replacement during the remainder of the
        lease term; and

                                       21
<PAGE>   22

             (x) no property insurer or similar body has made any
        recommendations with respect to any parcel of Bank Leased Real Property
        which have not been complied with, and all structures on the Bank Leased
        Real Property meet all qualifications for "highly protected risk"
        classification for fire insurance purposes.

          (v) Liens. Except as set forth on Schedule 4.01(v), Bank and its
     Subsidiaries own and have good, marketable and unencumbered title to, or an
     unencumbered interest in, each item comprising their assets, free and clear
     of any and all Liens.

          (w) Good Condition. Except as set forth on Schedule 4.01(w), all
     facilities used in connection with the operation of the businesses of Bank
     and its Subsidiaries and all of the material assets of Bank and its
     Subsidiaries, except real property of a type classified as OREO (other real
     estate owned) on the Bank's financial statements (i.e., foreclosed property
     not owned for the operation of the Bank's business), are free from material
     defects (normal wear and tear excepted) and have been maintained in
     accordance with normal industry practice.

          (x) No Undisclosed Liabilities. Except as and to the extent set forth
     on Schedule 4.01(x) or reflected in the 1999 Financial Statements, and
     except for current liabilities incurred by Bank or its Subsidiaries in
     connection with the operation of or with respect to their businesses in the
     ordinary course, since December 31, 1999, neither Bank nor its Subsidiaries
     has incurred any debts, liabilities or obligations of any nature or kind
     (whether absolute, accrued, contingent, unliquidated or otherwise, whether
     or not known to Bank, whether due or to become due and regardless of when
     asserted) arising out of transactions entered into, at or prior to the
     Closing, or any action or inaction at or prior to the Closing or any state
     of facts existing at or prior to the Closing and which could have a Bank
     Material Adverse Effect. Except as set forth on Schedule 4.01(x), Bank has
     no Knowledge of any existing, proposed or threatened change which could
     have a Bank Material Adverse Effect. There are no contingent or other
     liabilities of Bank or its Subsidiaries that have not been disclosed in the
     Schedules to this Agreement which could have a Bank Material Adverse
     Effect.

          (y) Recent Conduct of Business; Interim Operations. Except as set
     forth on Schedule 4.01(y), since December 31, 1999, there has not been, and
     through the Effective Time, there shall not be, any Bank Material Adverse
     Effect. Except as set forth on Schedule 4.01(y) or any other Schedule to
     this Agreement, since December 31, 1999, Bank and its Subsidiaries have
     caused their businesses to be conducted only in the ordinary course. Except
     as set forth on Schedule 4.01(y) or any other Schedule to this Agreement,
     since December 31, 1999, Bank and its Subsidiaries have not done any of the
     actions described in Sections 5.01(a) through (g), 5.01(l) through (v) or
     5.01(w) as Section 5.01(w) relates to Sections 5.01(a) through (g) and
     5.01(l) through (v).

          (z) Brokerage or Finder's Fee. Except for McConnell, Budd & Dowens,
     Inc. and Raymond James, no broker, finder, agent or similar intermediary
     has acted for or on behalf of Bank in connection with this Agreement or the
     transactions contemplated hereby and, except for the fee payable to Raymond
     James by Bank, no broker, finder, agent or similar intermediary is entitled
     to any broker's, finder's or similar fee or other commission in connection
     therewith based on any agreement, arrangement or understanding with Bank or
     any action taken by Bank.

          (aa) [intentionally omitted].

          (bb) Disclosure.  No representation or warranty by Bank contained in
     this Agreement and no statement contained in any of the Attendant Documents
     or any other certificate or instrument furnished or to be furnished
     pursuant to this Agreement or in connection with the transactions
     contemplated in this Agreement contains or will contain any untrue
     statement of a material fact, or omits or will omit to state a material
     fact, necessary in order to make any of the statements not misleading.

          (cc) Capitalization. Bank has two classes of capital stock, common
     stock, $1.00 par value, and preferred stock, $1.00 par value. Franklin
     Finance has two classes of capital stock, common stock, $300.00 par value,
     and preferred stock $10.00 par value. Franklin Home has one class of
     capital stock,
                                       22
<PAGE>   23

     common stock, $1.00 par value. Ben Properties has one class of capital
     stock, common stock, no par value. Schedule 4.01(cc) sets forth the number
     of authorized and the number of issued and outstanding shares of capital
     stock of Bank and each of its Subsidiaries. All of the shares of Bank Stock
     and all of the shares of capital stock of each of its Subsidiaries have
     been duly authorized and validly issued, are fully paid and non-assessable
     and were issued by Bank and its Subsidiaries without violating any
     requirements of law. Except as set forth on Schedule 4.01(cc), (i) there
     are no preemptive or first refusal rights to purchase or otherwise acquire
     shares of Bank Stock or capital stock of any of Bank's Subsidiaries
     pursuant to the Governing Documents of Bank or its Subsidiaries, by
     agreement or otherwise, (ii) there are no outstanding agreements,
     commitments, rights, options, warrants or claims of any nature whatsoever
     for the issuance, sale, purchase or redemption of any shares of Bank Stock
     or capital stock of any of Bank's Subsidiaries or any securities
     convertible into or exchangeable for such shares and (iii) there are no
     stock appreciation rights or phantom stock rights outstanding with respect
     to Bank stock or the capital stock of any of Bank's Subsidiaries.

          (dd) No Knowledge. Except as set forth in Schedule 4.01(dd), Bank has
     no Knowledge whatsoever that any of the representations or warranties of
     Bingham are untrue in any material respect.

          (ee) Affiliate Transactions. Except as set forth on Schedule 4.01(ee),
     Bank has not entered into any business transactions with any of its
     Affiliates.

     Section 4.02 Representations and Warranties of Bingham. Bingham hereby
represents and warrants to Bank, both as of the date of this Agreement and as of
the Effective Date, with the knowledge and expectation that, in agreeing to
enter into this Agreement, Bank is relying on, and in connection with the
consummation of the transactions contemplated in this Agreement, will rely on,
such representations and warranties:

          (a) Good Standing and Authority. Bingham and each of its Subsidiaries
     is a corporation duly organized, validly existing and in good standing
     under the laws of the State of Michigan, except for (i) Merger Sub, which,
     prior to the Effective Time, will be a federally-chartered savings
     association, duly organized, validly existing and in good standing under
     applicable law, (ii) Dynex Financial, Inc. ("DFI"), Dynex Financial of
     Alabama, Inc. ("DFI Alabama") and Dynex Insurance Agency, Inc. ("DIA"),
     which are corporations duly organized, validly existing and in good
     standing under the laws of the Commonwealth of Virginia, and (iii)
     Bloomfield Acceptance Company, L.L.C. ("BAC") and Bloomfield Servicing
     Company, L.L.C. ("BSC"), which are limited liability companies duly
     organized, validly existing and in good standing under the laws of the
     State of Michigan. Bingham and each of its Subsidiaries is duly qualified
     to do business as a foreign corporation and is in good standing in each
     jurisdiction in which it is required to be so qualified other than where a
     failure to so qualify would not have a Bingham Material Adverse Effect.
     Each such jurisdiction is listed on Schedule 4.02(a). Bingham has all
     requisite power and authority to enter into this Agreement and any
     Attendant Documents to which it is a party and to consummate the
     transactions contemplated in this Agreement and the Attendant Documents.
     This Agreement and all of the Attendant Documents to which Bingham is a
     party, and the consummation of the transactions contemplated in this
     Agreement, have been or will be, on or prior to the Effective Date, duly
     authorized and approved by the Bingham Board, and all other necessary and
     proper corporate action on the part of Bingham has been or will be taken on
     or prior to the Effective Date. This Agreement, and all of the Attendant
     Documents to which Bingham is a party, when executed and delivered, will
     constitute legal, valid and binding obligations of Bingham enforceable
     against it in accordance with their respective terms.

          (b) Consents and Approvals; No Defaults.

             (i) To the knowledge of Bingham, except as set forth on Schedule
        4.02(b) and except for filings or approvals required under state "Blue
        Sky" laws, no consent, approval or authorization of, or designation,
        declaration or filing with, or notice to, any Governmental Authority, or
        any lenders, lessors, creditors, shareholders or others, is required on
        the part of Bingham or its Subsidiaries in connection with the valid
        execution and delivery of this Agreement and the
                                       23
<PAGE>   24

        Attendant Documents or the consummation of the transactions contemplated
        in this Agreement and the Attendant Documents except where the failure
        to obtain such consent, approval, authorization, designation,
        declaration or filing would not have a Bingham Material Adverse Effect.
        Before the Effective Time, Bingham and its Subsidiaries (in cooperation
        with Bank, as applicable) shall properly obtain, perform or give all of
        the consents, approvals, authorizations, designations, declarations,
        filings and notices set forth on Schedule 4.02(b), and as of the
        Effective Time, Bingham shall have given Bank's counsel copies or
        adequate evidence of all such consents, approvals, authorizations,
        designations, declarations, filings and notices.

             (ii) Subject to the receipt or making of the consents, approvals,
        authorizations, designations, declarations, filings and notices referred
        to in the preceding paragraph, and expiration of related waiting
        periods, and required filings under federal and state securities laws,
        the execution, delivery and performance of this Agreement and the
        consummation of the Merger do not and will not: (i)(A) constitute a
        breach or violation of, or a default under, or give rise to any Lien,
        any acceleration of remedies or any right of termination under, any law,
        rule or regulation or any judgment, decree, order, governmental permit
        or license, or agreement, license, indenture or instrument of Bingham or
        of any of its Subsidiaries or to which Bingham or any of its
        Subsidiaries or properties is subject or bound, (B) constitute a breach
        or violation of, or a default under, Bingham's or Merger Sub's Governing
        Documents, (C) require any consent or approval under any such law, rule,
        regulation, judgment, decree, order, governmental permit or license,
        agreement, license, indenture or instrument or (D) result in any penalty
        payment relating to borrowed funds, advances or financial instruments;
        and (ii) have a Bingham Material Adverse Effect.

          (c) Financial Reports, SEC Documents, and Material Adverse Effect.

             (i) Bingham's Form 10-K for the period ending September 30, 1999
        and all other reports, registration statements, definitive proxy
        statements or information statements filed or to be filed by it or any
        of its Subsidiaries subsequent to September 30, 1999 under the
        Securities Act or the Exchange Act, in the form filed or to be filed
        with the SEC (collectively, "Bingham SEC Documents"), as of the date
        filed, (A) complied or will comply in all material respects with the
        applicable requirements under the Securities Act or the Exchange Act, as
        the case may be, and (B) did not and will not contain any untrue
        statement of a material fact or omit to state a material fact required
        to be stated therein or necessary to make the statements therein, in
        light of the circumstances under which they were made, not misleading;
        and each of the balance sheets or statements of condition contained in
        or incorporated by reference into any such SEC Document (including the
        related notes and schedules thereto), and each of the statements of
        income or results of operations and changes in shareholders' equity and
        cash flows or equivalent statements in the Bingham SEC Documents
        (including any related notes and schedules thereto), have been prepared,
        in each case, in accordance with generally accepted accounting
        principles consistently applied during the periods involved, except in
        each case as may be noted therein, subject to normal year-end audit
        adjustments and the absence of footnotes in the case of unaudited
        statements.

             (ii) Except as set forth on Schedule 4.02(c), and except for
        liabilities incurred in connection with negotiation of and compliance
        with this Agreement and otherwise in connection with the transactions
        contemplated hereby, since September 30, 1999 to the date hereof,
        Bingham and its Subsidiaries have not incurred any material liability
        other than in the ordinary course of business consistent with past
        practice which would constitute a Bingham Material Adverse Effect.

             (iii) Except as set forth on Schedule 4.02(c), since September 30,
        1999, (A) Bingham and its Subsidiaries have to the date hereof conducted
        their respective businesses in the ordinary and usual course consistent
        with past practice (excluding matters related to this Agreement and the
        transactions contemplated hereby) and (B) there has not occurred any
        event or circumstance

                                       24
<PAGE>   25

        that, individually or taken together with all other facts, circumstances
        and events, would constitute a Bingham Material Adverse Effect.

          (d) Litigation. Except as set forth on Schedule 4.02(d), no material
     litigation, claim or other proceeding before any Governmental Authority is
     pending against Bingham or any of its Subsidiaries and, to Bingham's
     Knowledge, no such litigation, claim or other proceeding has been
     threatened.

          (e) Regulatory Matters.

             (i) Except as set forth on Schedule 4.02(e), neither Bingham nor
        any of its Subsidiaries or properties is a party to or is subject to any
        order, decree, agreement, memorandum of understanding or similar
        arrangement with, or a commitment letter to, or extraordinary
        supervisory letter from, any federal or state Governmental Authority or
        Regulatory Authority.

             (ii) Except as set forth on Schedule 4.02(e), neither Bingham nor
        any of its Subsidiaries has been advised by any Regulatory Authority
        that such Regulatory Authority is contemplating issuing or requesting
        (or is considering the appropriateness of issuing or requesting) any
        such order, decree, agreement, memorandum of understanding, commitment
        letter, or extraordinary supervisory letter.

          (f) Compliance with Laws. Except as set forth on Schedule 4.02(f), and
     except for violations and acts of noncompliance that would not have a
     Bingham Material Adverse Effect, each of Bingham and its Subsidiaries:

             (i) to Bingham's Knowledge is in material compliance with all
        applicable federal, state, local and foreign statutes, laws,
        regulations, ordinances, rules, judgments, orders or decrees applicable
        thereto or to the employees conducting such businesses, including,
        without limitation, the Equal Credit Opportunity Act, the Fair Housing
        Act, the Home Mortgage Disclosure Act and all other applicable fair
        lending laws and other laws relating to discriminatory business
        practices; and

             (ii) has received, since September 30, 1999, no notification or
        communication from any Governmental Authority (A) asserting that Bingham
        or any of its Subsidiaries is not in compliance in any material respect
        with any of the statutes, regulations, or ordinances which such
        Governmental Authority enforces or (B) threatening to revoke any
        material license, franchise, permit, or governmental authorization (nor,
        to Bingham's Knowledge, do any grounds for any of the foregoing exist).

          (g) Loan Portfolio; Portfolio Management.

             (i) Except as set forth on Schedule 4.02(g) all evidences of
        indebtedness reflected as assets in Bingham's financial statements at
        September 30, 1999 referred to in Section 4.02(c) hereof, or originated
        or acquired since such date, are (except with respect to those assets
        which are no longer assets of it or any of its Subsidiaries) binding
        obligations of the respective obligors named therein except as
        enforcement may be limited by bankruptcy, insolvency or other similar
        laws affecting the enforcement of creditors' rights generally and except
        as to the availability of equitable remedies, including specific
        performance, which are subject to the discretion of the court before
        which a proceeding is brought, and except where a failure of enforcement
        will not have a Bingham Material Adverse Effect, and the payment of no
        material amount thereof (either individually or in the aggregate with
        other evidences of indebtedness) is subject to any defenses or offsets
        which have been threatened or asserted against Bingham or any of its
        Subsidiaries which would collectively constitute a Bingham Material
        Adverse Effect. All such indebtedness which is secured by an interest in
        real property is secured by a valid and perfected mortgage lien having
        the priority specified in the loan documents except in each case in
        which, individually or in the aggregate, the failure to have such a
        mortgage would not have a Bingham Material Adverse Effect. All such
        indebtedness which is secured by an interest in personal property is
        secured by a valid and perfected security interest having the priority
        specified in the loan

                                       25
<PAGE>   26

        documents, except in each case in which, individually or in the
        aggregate, the failure to have such a security interest would not have a
        Bingham Material Adverse Effect. Except as set forth on Schedule
        4.02(g), or except where noncompliance would not have a Bingham Material
        Adverse Effect, all loans originated, directly or indirectly, or
        purchased by Bingham or any of its Subsidiaries were, at the time
        entered into and at all times owned by Bingham or its Subsidiaries, in
        compliance in all material respects with all applicable laws and
        regulations (including, without limitation, all consumer protection laws
        and regulations). Except where noncompliance would not have a Bingham
        Material Adverse Effect, Bingham and its Subsidiaries (as applicable),
        in all material respects, administer their loan and investment
        portfolios (including, but not limited to, adjustments to adjustable
        mortgage loans) in accordance with all applicable laws and regulations
        and the terms of applicable instruments. Except where noncompliance
        would not have a Bingham Material Adverse Effect, the records of Bingham
        and any of its Subsidiaries (as applicable) regarding all loans
        outstanding on its books are accurate in all material respects. With
        respect to loans for which real property is the primary collateral,
        Bingham and its Subsidiaries (as applicable) maintain or require all
        borrowers to maintain adequate insurance on the security property and
        pay or cause all borrowers, to pay all taxes or assessments which may be
        entitled to a Lien with priority over the Bingham's Lien in such
        property. Other than in connection with commercial loans, Bingham
        maintains insurance against its failure or the borrower's failure to
        maintain insurance and pay taxes or assessments.

             (ii) Schedule 4.02(g) sets forth a list, accurate and complete in
        all material respects, of the aggregate amounts of loans, extensions of
        credit and other assets of Bingham and its Subsidiaries that have been
        adversely designated, criticized or classified by Bingham or its outside
        auditors as of December 31, 1999, separated by category of
        classification or criticism (the "Bingham Asset Classification"); and no
        amounts of loans, extensions of credit or other assets that have been
        adversely designated, classified or criticized as of the date hereof, by
        any representative of any governmental or regulatory authority as
        "Special Mention," "Substandard," "Doubtful," "Loss" or words of similar
        import are excluded from the amounts disclosed in the Bingham Asset
        Classification other than amounts of loans, extensions of credit or
        other assets that were charged off by Bingham or any of its Subsidiaries
        before the date hereof.

          (h) Permits and Licenses. Bingham and each of its Subsidiaries has all
     franchises, permits, licenses or other authorizations by all Governmental
     Authorities, and has made all filings, applications and registrations with,
     all Governmental Authorities that are required in order to permit them to
     own or lease their properties and to conduct their businesses as presently
     conducted except where the failure to obtain such consent, approval,
     authorization, designation, declaration or filing would not have a Bingham
     Material Adverse Effect. Schedule 4.02(h) lists all franchises, permits,
     licenses or other authorizations by all Governmental Authorities held by
     Bingham and its Subsidiaries ("Bingham Licenses"), true and complete copies
     of all of which have been delivered to Bank. Except as set forth on
     Schedule 4.02(h), all of the Bingham Licenses are in full force and effect
     and will not be affected in any way by, and will continue to be in full
     force and effect after, the consummation of the transactions contemplated
     in this Agreement and the Attendant Documents to the extent necessary to
     complete any required governmental approvals of the transactions
     contemplated in this Agreement and the Attendant Documents, and to permit
     continuous business operations following consummation of the transactions
     contemplated.

          (i) Labor Matters.

             (i) Schedule 4.02(i) contains a complete and accurate list of the
        current employees of Bingham and its Subsidiaries as of a date no later
        than 30 days before this representation and warranty is made (the
        "Bingham Employees") and, with respect to each Bingham Employee, his or
        her salary or hourly rate currently in effect, annual bonuses (last paid
        or payable), if any, any other fringe benefits or incentive paid or
        payable to him or her and the amount of all cash compensation accrued
        through February 29, 2000, but as yet unpaid for each such Bingham
        Employee. Except as set forth on Schedule 4.02(i), all such Bingham
        Employees are actively at
                                       26
<PAGE>   27

        work, and no such Bingham Employee is currently on leave of absence,
        layoff, military leave, suspension, workers' compensation, salary
        continuance or short or long term disability or otherwise not actively
        performing his or her work during all normally scheduled business hours.

             (ii) Except as set forth on Schedule 4.02(i), neither Bingham nor
        any of its Subsidiaries is a party to or is bound by any collective
        bargaining agreement, contract or other agreement or understanding with
        a labor union or labor organization, nor is Bingham or any of its
        Subsidiaries the subject of a proceeding asserting that it or any such
        Subsidiary has committed an unfair labor practice (within the meaning of
        the National Labor Relations Act) or seeking to compel Bingham or any
        such Subsidiary to bargain with any labor organization as to wages or
        conditions of employment, nor is there any strike or other labor dispute
        involving Bingham or any of its Subsidiaries pending or, to Bingham's
        Knowledge, threatened, nor does Bingham have any Knowledge of any
        activity involving any Bingham Employee seeking to certify a collective
        bargaining unit or engaging in other organizational activity.

             (iii) To the knowledge of Bingham, except as set forth on Schedule
        4.02(i), hours worked by, and payments made to, all Bingham Employees
        and former employees of Bingham and its Subsidiaries ("Former Bingham
        Employees") have been in compliance with the Fair Labor Standards Act
        and other applicable federal, state and local laws.

             (iv) Except as set forth on Schedule 4.02(i), as of the Effective
        Date, all payments determined to be due from Bingham and its
        Subsidiaries on account of any Bingham Employee's or Former Bingham
        Employees' work, health or welfare insurance, under any agreement,
        whether oral or written, will have been paid or properly accrued on
        Bingham's financial statements.

             (v) Except as set forth on Schedule 4.02(i), there are no vacation
        monies or rights to time off which have been earned by any Bingham
        Employee or Former Bingham Employee under any agreement, whether oral or
        written, that have not been paid or properly accrued on Bingham's
        financial statements, nor, except for payments in connection with the
        DFI Restructuring Plan, are there any severance payments which could
        become payable by Bingham or its Subsidiaries under the terms of any
        oral or written agreement or commitment.

             (vi) Except as disclosed pursuant to Section 4.02(j), neither
        Bingham nor any of its Subsidiaries has any material liability with
        respect to any pension, profit sharing, retirement or similar plan, or
        other employee benefit plan.

             (vii) Except as set forth on Schedule 4.02(i):

                (A) there is no unfair labor practice charge or complaint
           concerning Bingham or its Subsidiaries or any Bingham Employee or
           Former Bingham Employee pending before any Governmental Authority in
           any jurisdiction in which Bingham or its Subsidiaries conduct
           business;

                (B) there is no labor strike or slowdown, work stoppage, lockout
           or other collective labor action actually pending or, to Bingham's
           Knowledge, threatened against or affecting the business of Bingham or
           its Subsidiaries, and neither Bingham nor its Subsidiaries has
           experienced any strike or slowdown, work stoppage, lockout or other
           collective labor action in connection with their business by or with
           respect to any Bingham Employees or Former Bingham Employees;

                (C) there is no representation claim or petition concerning the
           business of Bingham or its Subsidiaries or any Bingham Employee or
           Former Bingham Employee pending before any Governmental Authority in
           any jurisdiction in which the business of Bingham or its Subsidiaries
           conduct business, and no question concerning representation exists
           relating to the Bingham Employees;

                (D) there are no charges with respect to or relating to the
           business of Bingham or its Subsidiaries pending before the Equal
           Employment Opportunity Commission or any
                                       27
<PAGE>   28

           Governmental Authority in any jurisdiction in which Bingham or its
           Subsidiaries conduct business responsible for the prevention of
           unlawful employment practices;

                (E) neither of Bingham nor its Subsidiaries has received formal
           notice from any Governmental Authority responsible for the
           enforcement of labor or employment laws of an intention to conduct an
           investigation of Bingham or its Subsidiaries and no such
           investigation is currently in progress; and

                (F) to Bingham's Knowledge, no key Bingham Employee or group of
           Bingham Employees has any plans to terminate employment with Bingham
           or its Subsidiaries prior to or after Closing.

          (j) Employee Benefits.

             (i) Controlled Group: Except as disclosed in Schedule 4.02(j),
        neither Bingham nor any of its Subsidiaries is now, has ever been or
        will be at any time prior to the Effective Time, a member of a
        Controlled Group.

             (ii) Bingham Employee Benefit Plans and Documents: Schedule 4.02(j)
        lists each and every Bingham Employee Benefit Plan that Bingham, its
        Subsidiaries or any Controlled Group Member now, or will at any time
        prior to the Effective Date, maintain, sponsor, participate in or
        contribute to with respect to the Bingham Employees or the Former
        Bingham Employees, or that Bingham, its Subsidiaries or any Controlled
        Group Member ever maintained, sponsored, participated in or made
        contributions to with respect to the Bingham Employees or the Former
        Bingham Employees. Except as disclosed in Schedule 4.02(j), neither
        Bingham nor any of its Subsidiaries or any Controlled Group Member is a
        party to any collective bargaining or union contract with respect to the
        Bingham Employees or the Former Bingham Employees. Bingham has provided
        to Bank true and correct copies of all current and prior material and
        readily available documents relating to the Bingham Employee Benefit
        Plans listed in Schedule 4.02(j), including, but not limited to: (A)
        plan documents, trust documents and plan and trust amendments, in each
        case, which implement, relate to, or amend a Bingham Employee Benefits
        Plan; (B) summary plan descriptions, amendments thereto, and all other
        communication material provided to employees; (C) summaries of material
        modifications; (D) insurance (including reinsurance), administrative
        services or annuity contracts; (E) collective bargaining agreements or
        contracts and all amendments thereto; (F) the most recent financial
        statements; (G) with regard to self-funded Welfare Plans, experience and
        enrollment data for the prior three plan years as well as documentation
        and calculations demonstrating the preset value of accrued obligations
        under such plans as of the Effective Date; (H) if Bingham or its
        Subsidiaries provide, or have any commitment or obligation to provide,
        any Bingham Employee Benefit Plan benefits to their retirees, copies of
        all documentation and calculations demonstrating the present value of
        such obligation or commitment as of the Effective Date; (I) if Bingham,
        its Subsidiaries or any Controlled Group Member maintains a defined
        benefit pension plan, as defined in Section 3(35) of ERISA with respect
        to the Bingham Employees or the Former Bingham Employees, the most
        recent actuarial valuation for each such plan and copies of any funding
        waivers and applications therefor, and all related correspondence and
        documentation; (J) the three most recent annual reports; (K) agreements
        with respect to leased or temporary employees; (L) all government
        rulings and opinions, if any (and pending requests for rulings and
        opinions, if any); and (M) the most recent IRS determination letters
        with respect to the Bingham Employee Benefits Plans listed on Schedule
        4.02(j).

             (iii) No Minimum Funding Obligations; No Multiemployer Plan,
        Multiple Employer Plan or Post-Employment Welfare Plan Liability. No
        Bingham Employee Benefit Plan is a, and none of Bingham, any of its
        Subsidiaries or any Controlled Group Member has any material liability
        or potential liability (including, with respect to clauses (B) and (C)
        of this paragraph any actual or potential withdrawal liability)with
        respect to any, (A) Pension Plan that is subject to the minimum funding
        requirements of Section 412 of the Code or Section 302 of ERISA,
                                       28
<PAGE>   29

        (B) multiemployer plan (as such term is defined in Section 3(37) of
        ERISA), (C) plan of the type described in Sections 4063 and 4064 of
        ERISA or in Section 413(c) of the Code (and regulations promulgated
        thereunder), or (D) plan which provides health, life insurance, accident
        or other "welfare-type" benefits to current or future retirees or
        current or future former employees, their spouses or dependents, other
        than in accordance with Section 4980B of the Code, Part 6 of Subtitle B
        of Title I of ERISA or applicable state continuation coverage law.

             (iv) Representations: Except as set forth in Schedule 4.02(j):

                (A) Qualification: All the Pension Plans required to be listed
           on Schedule 4.02(j), and the related trusts, if any, now meet, and
           since their inception have met, and as of the Effective Date shall
           meet, in all material respects, the requirements for qualification
           under Section 401(a) of the Code and are now, and since their
           inception have been, exempt from taxation under Section 501(a) of the
           Code;

                (B) Determination Letters: The IRS has issued a favorable
           determination letter with respect to the qualified status of each
           such Pension Plan and trust, and has not taken, nor to the Knowledge
           of Bingham, its Subsidiaries and Controlled Group Members, has
           reasonable grounds to take any action to revoke such letter;

                (C) Satisfaction of Obligations: Bingham, each of its
           Subsidiaries and each Controlled Group Member have performed, and
           through the Effective Date shall perform, in all material respects,
           all obligations required to be performed by them under the Bingham
           Employee Benefit Plans (including, but not limited to, the making of
           all contributions), and are not in material default under, or in
           material violation of, any of the Bingham Employee Benefit Plans, and
           none of Bingham, its Subsidiaries, or any Controlled Group Member has
           Knowledge of any such material default or violation of any other
           party to any and all of the Bingham Employee Benefit Plans;

                (D) Compliance With Laws: Each Bingham Employee Benefit Plan has
           been, and through the Effective Date shall be, maintained, and funded
           in compliance in all material respects with ERISA, the Code, the Age
           Discrimination in Employment Act (to the extent applicable), COBRA,
           and each other applicable federal, state or local laws, and, if
           applicable, each foreign law, and each Bingham Employee Benefit Plan
           is valid and binding, in full force and effect, and there are no
           material defaults thereunder;

                (E) No Prohibited Transactions: None of the Bingham Employee
           Benefit Plans, nor any trust created thereunder, any trustee or
           administrator thereof, nor Bingham or any of its Subsidiaries, nor
           any other Party dealing with any Bingham Employee Benefit Plan has
           engaged in any transaction, or will prior to the Effective Date
           engage in any transaction, that would trigger a tax under Section
           4975 of the Code, or violate Section 406 of ERISA, or, if applicable,
           any similar provision under foreign law;

                (F) No Claims Pending or Threatened: There are not presently,
           nor shall there be prior to the Effective Date, any actions, suits or
           claims pending (other than routine claims for benefits) or, to
           Bingham's Knowledge, threatened against, any Bingham Employee Benefit
           Plan, against the assets of any Bingham Employee Benefit Plan, or
           against the Bingham, any of its Subsidiaries or any Controlled Group
           Member for benefits arising under or pursuant to any Bingham Employee
           Benefit Plan;

                (G) Reporting and Disclosure: With regard to each Bingham
           Employee Benefit Plan listed in Schedule 4.02(j), Bingham and its
           Subsidiaries have complied with, and will through the Effective Date
           continue to comply with, all reporting and disclosure requirements of
           ERISA and the Code in all material respects;

                (H) No Unfunded Liabilities: No Bingham Employee Benefit Plan
           has any material unfunded liabilities;

                                       29
<PAGE>   30


                (I) No Further Liabilities: Except as provided in Schedule
           4.02(j), Bingham and its Subsidiaries do not, and shall not as of the
           Effective Date, have any liability or obligation to any Bingham
           Employee Benefit Plan or to the Pension Benefit Guaranty Corporation,
           DOL, Department of Treasury or similar agency of a foreign
           government, any other plan or entity, or any employee, participant or
           beneficiary of any Bingham Employee Benefit Plan, arising out of or
           pursuant to any Bingham Employee Benefit Plan which could subject
           Bingham or its Subsidiaries to any material liability;

                (J) Termination and Amendment: Except as disclosed in Schedule
           4.02(j), each Bingham Employee Benefit Plan listed in Schedule
           4.02(j) is, and as of and through the Effective Date, shall be
           terminable, and/or subject to amendment by Bingham or its
           Subsidiaries, at the discretion of Bingham or its Subsidiaries, with
           no liability for benefits incurred after such termination or
           inconsistent with the terms of any amendment after its effective
           date.

                (K) Change of Control Payments: Except as set forth in Schedule
           4.02(j), none of the Bingham Employee Benefit Plans obligates Bingham
           or any of its Subsidiaries to pay separation, severance, termination
           or similar-type benefits solely as a result of any transaction
           contemplated by this Agreement or solely as a result of a "change in
           control," as such term is contemplated by Section 280G of the Code.

          (k) Tax Matters.

             (i) Except as would not cause a Bingham Material Adverse Effect or
        except as set forth on Schedule 4.02(k):

                (A) Bingham, each of its Subsidiaries, each of their affiliated
           groups and each of the entities identified on Schedule 4.02(k)
           pursuant to Section 4.02(k)(ii)(B) (the "Bingham Predecessors") have
           filed all Tax Returns which they are required to file under
           applicable laws and regulations, and all such Tax Returns are
           complete and correct and have been prepared in compliance with all
           applicable laws and regulations;

                (B) Bingham, each of its Subsidiaries, each of their affiliated
           groups and each of the Bingham Predecessors have paid all Taxes due
           and owing by them (whether or not such Taxes are required to be shown
           on a Tax Return) and have withheld and paid over to the appropriate
           taxing authority all Taxes which they are required to withhold from
           amounts paid or owing to any employee, shareholder, creditor or other
           third party;

                (C) neither Bingham or its Subsidiaries, nor any of their
           affiliated groups or the Bingham Predecessors have waived any statute
           of limitations with respect to any Taxes or agreed to any extension
           of time with respect to any Tax assessment or deficiency;

                (D) the accrual for Taxes on Bingham's most recent audited
           balance sheet would be adequate to pay all Tax liabilities of Bingham
           and its Subsidiaries if their current tax year were treated as ending
           on the date of such balance sheet (excluding any amount recorded
           which is attributable solely to timing differences between book and
           Tax income);

                (E) since September 30, 1999, neither Bingham nor any of its
           Subsidiaries has incurred any liability for Taxes with respect to
           their businesses other than in the ordinary course;

                (F) no foreign, federal, state or local tax audits or
           administrative or judicial proceedings are pending or being conducted
           with respect to Bingham, any of its Subsidiaries, any of their
           affiliated groups or any of the Bingham Predecessors;

                (G) neither Bingham or its Subsidiaries, nor any of their
           affiliated groups or the Bingham Predecessors have received from any
           foreign, federal, state or local taxing authority

                                       30
<PAGE>   31

           any (1) written notice indicating an intent to open an audit or other
           review, or (2) request for information related to Tax matters; and

                (H) there are no material unresolved questions or claims
           concerning any Tax liability of Bingham, its Subsidiaries, or any of
           their affiliated groups or the Bingham Predecessors.

             (ii) Except as set forth on Schedule 4.02(k), neither Bingham nor
        any of its Subsidiaries (A) has made an election under Section 341(f) of
        the Code, (B) is liable for the Taxes of another person (1) under
        Treasury Regulation Section 1.1502-6 (or comparable provisions of state,
        local or foreign law), (2) as a transferee or successor, (3) by contract
        or indemnity or (4) otherwise, (C) is a party to any tax sharing
        agreement or (D) has made any payments, are obligated to make any
        payments or is a party to an agreement that could obligate it to make
        any payments that would not be deductible under Section 280G of the
        Code.

          (l) Environmental Matters. To Bingham's Knowledge, neither the conduct
     nor operation of Bingham or its Subsidiaries nor any condition of any
     property currently or previously owned or operated by any of them
     (including, without limitation, in a fiduciary or agency capacity), or on
     which any of them holds a Lien, results or resulted in a violation of any
     Environmental Laws and to Bingham's Knowledge, no condition has existed or
     event has occurred with respect to any of them or any such property that,
     with notice or the passage of time, or both, is reasonably likely to result
     in any liability to Bingham or any of its Subsidiaries under or by reason
     of any Environmental Laws or Materials of Environmental Concern except
     where the conduct, operation, condition or event would not have a Bingham
     Material Adverse Effect. To Bingham's Knowledge, except for any notice for
     which, in Bingham's reasonable judgment, there is no reasonable basis,
     neither Bingham nor any of its Subsidiaries has received any notice from
     any person or entity that Bingham or its Subsidiaries or the operation or
     condition of any property ever owned, operated, or held as collateral or in
     a fiduciary capacity by any of them are or were in violation of or
     otherwise are alleged to have liability under any Environmental Law or
     relating to Materials of Environmental Concern, including, but not limited
     to, responsibility (or potential responsibility) for the cleanup or other
     remediation of Materials of Environmental Concern at, on, beneath, or
     originating from any such property.

          (m) Risk Management Instruments. Except as set forth on Schedule
     4.02(m), all material interest rate swaps, caps, floors, option agreements,
     futures and forward contracts and other similar risk management
     arrangements, whether entered into for Bingham's own account, or for the
     account of one or more of Bingham's Subsidiaries or their customers have
     been previously disclosed to Bank and were entered into (i) in accordance
     with prudent business practices and in all material respects in compliance
     with all applicable laws, rules, regulations and regulatory policies and
     (ii) with parties believed to be financially responsible at the time; and
     each of them constitutes the valid and legally binding obligation of
     Bingham or one of its Subsidiaries, enforceable in accordance with its
     terms (except as enforceability may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium, fraudulent transfer and similar
     laws of general applicability relating to or affecting creditors' rights or
     by general equity principles), and is in full force and effect. Neither
     Bingham nor its Subsidiaries, nor to Bingham's Knowledge any other party
     thereto, is in breach of any of its obligations under any such agreement or
     arrangement in any material respect.

          (n) Insurance. Except as set forth on Schedule 4.02(n), Bingham and
     its Subsidiaries have maintained and now maintain insurance with respect to
     their assets and businesses covering property damage by fire or other
     casualty, and against such liabilities, claims and risks, including,
     without limitation, workers compensation, and in such amounts as is
     customary or appropriate in the industry. Schedule 4.02(n) contains a true
     and correct summary of all such insurance policies maintained by Bingham
     and its Subsidiaries, presently or at any point during the last five years,
     setting forth the names of the insured and the insurer, policy numbers, the
     types of coverage, premium payments or basis of payment, deductible amounts
     and limits of coverage. Except as set forth on Schedule 4.02(n), to the
     knowledge of Bingham no such policy of insurance is subject to any
     deductible, self-insured retention, retrospective rating agreement,
     indemnification agreement or any other method or device by


                                       31

<PAGE>   32

     which the insured person is subject to all or any part of the liability for
     any or all claims. Concurrently with or prior to the execution of this
     Agreement, Bingham and its Subsidiaries have delivered to Bank true,
     correct and complete copies of all such insurance policies. Except as set
     forth on Schedule 4.02(n), all such insurance policies will be in full
     force and effect through the Effective Date. To the knowledge of Bingham,
     except as set forth on Schedule 4.02(n), there is no state of facts and no
     event has occurred forming the basis for any present property, casualty or
     fidelity claim against Bingham or its Subsidiaries that is not fully
     covered by insurance. Schedule 4.02(n)contains loss runs for the last five
     years setting forth all property, general and products liability and
     workers compensation claim activity against the businesses of Bingham and
     its Subsidiaries, including the date and place of the occurrence, the
     claimant's name, reserves, amounts paid, a brief description of the
     incident and whether the claim is open or closed. Except as set forth on
     Schedule 4.02(n), Bingham has no Knowledge of any occurrence, circumstance,
     or event which could reasonably be expected to result in any such claim.

          (o) Governmental Reviews. Except as set forth on Schedule 4.02(o), no
     investigation or review by any Governmental Authority with respect to
     Bingham, any Bingham Subsidiary or any of their officers or directors is
     pending or, to the Knowledge of Bingham, threatened, nor has any
     Governmental Authority indicated to Bingham or any Bingham Subsidiary an
     intention to conduct the same, other than normal or routine regulatory
     examinations.

          (p) Fairness Opinion. On March 19, 2000, Keefe Bruyette & Woods, Inc.
     ("Keefe Bruyette") provided to the Bingham Board a written fairness opinion
     to the effect that the consideration to be paid by Bingham in the Merger is
     fair to the shareholders of Bingham from a financial point of view.

          (q) Compliance with Servicing Obligations. Except as set forth on
     Schedule 4.02(q) and except for violations and acts of noncompliance that
     would not have a Bingham Material Adverse Effect, to the best of Bingham's
     Knowledge, Bingham and the Bingham Subsidiaries are in compliance in all
     material respects with all contract, agency and investor requirements and
     guidelines, and all applicable laws, rules and regulations of Governmental
     Authorities, relating to the servicing and administration of loans by them,
     or any of them, including but not limited to, properly and timely making
     interest rate adjustments to adjustable rate loans.

          (r) Intellectual Property. Schedule 4.02(r) sets forth all
     Intellectual Property Bingham and its Subsidiaries own or use in their
     businesses ("Bingham Intellectual Property"). Bingham and its Subsidiaries
     are the sole owners (except for licensed property for which valid and
     subsisting licenses exist) of the Bingham Intellectual Property, free of
     all Liens. Except as set forth in Schedule 4.02(r), to Bingham's Knowledge,
     there is no claim against Bingham or any of its Subsidiaries that the
     Bingham Intellectual Property or any of its operations, activities,
     products or publications infringes any material patent, trademark, trade
     name, copyright or other proprietary or intellectual property right of any
     third party or that any of them is illegally using the material trade
     secrets or property rights of others in any material respect. To the
     knowledge of Bingham, neither Bingham nor any of its Subsidiaries has any
     disputes with or claims against, or any basis for claims against, any third
     party for infringement by such third party of any Bingham Intellectual
     Property.

          (s) Material Contracts. Schedule 4.02(s) identifies all of the
     Material Contracts of Bingham and its Subsidiaries, true and complete
     copies of all of which have been delivered to Bank. Except as set forth on
     Schedule 4.02(s), and except for any default which would not constitute a
     Bingham Material Adverse Effect, (i) Bingham and each of its Subsidiaries
     has complied in all material respects with the provisions of, and is not in
     default under, each such Material Contract to which it is a party or any
     such default has been waived, and (ii) to the Knowledge of Bingham, no
     other party to any such Material Contract has failed to comply in any
     material respect with, or is in default under, the provisions of any such
     Material Contract.

          (t) Real Property Owned. Neither Bingham nor any of its Subsidiaries
     own any real property and, except as set forth on Schedule 4.02(t), and
     except for real property of the type classified as

                                       32
<PAGE>   33

     OREO (other real estate owned) on the Bingham's financial statements (i.e.,
     foreclosed property not owned for the operation of Bingham's business),
     none of them has ever owned any real property.

          (u) Real Property Leased. Schedule 4.02(u) sets forth the legal
     description for all real properties leased or subleased to Bingham or its
     Subsidiaries (the "Bingham Leased Real Property"). Bingham has delivered to
     Bank true, correct and complete copies of the leases and subleases listed
     on Schedule 4.02(u). Except as set forth on Schedule 4.02(u), neither
     Bingham nor any of its Subsidiaries has leased or subleased any real
     property during the past three years. Except as set forth on Schedule
     4.02(u), with respect to each such lease or sublease:

             (i) the lease or sublease is legal, valid, binding, enforceable and
        in full force and effect in all material respects;

             (ii) the lease or sublease will continue to be legal, valid,
        binding, enforceable and in full force and effect in all material
        respects on identical terms following the Closing;

             (iii) neither Bingham, its Subsidiaries, nor, to Bingham's
        Knowledge, any other party to the lease or sublease is in breach or
        default, and no event has occurred which, with notice or lapse of time,
        would constitute such a breach or default or permit termination,
        modification or acceleration under the lease or sublease;

             (iv) to Bingham's Knowledge, no party to the lease or sublease has
        repudiated any of its provisions;

             (v) there are no material disputes, oral agreements or forbearance
        programs in effect as to the lease or sublease;

             (vi) neither Bingham nor any of its Subsidiaries, as applicable,
        has assigned, transferred, conveyed, mortgaged, deeded in trust or
        encumbered all or any portion of their interest in the leasehold or
        subleasehold;

             (vii) to Bingham's Knowledge, all facilities leased or subleased
        under the lease or sublease have been operated and maintained in
        accordance with applicable laws, rules and regulations in all material
        respects;

             (viii) all facilities leased or subleased under the lease or
        sublease are supplied with utilities and other services reasonably
        necessary for the operation of such facilities;

             (ix) all facilities leased or subleased under the lease or sublease
        are in good operating condition, and would not, with ordinary wear and
        tear, require major repair or replacement during the remainder of the
        lease term; and

             (x) no property insurer or similar body has made any
        recommendations with respect to any parcel of Bingham Leased Real
        Property which have not been complied with, and all structures on the
        Bingham Leased Real Property meet all qualifications for "highly
        protected risk" classification for fire insurance purposes.

          (v) Liens. Except as set forth on Schedule 4.02(v), Bingham and its
     Subsidiaries own and have good, marketable and unencumbered title to, or an
     unencumbered interest in, each item comprising their assets, free and clear
     of any and all Liens.

          (w) Good Condition. Except as set forth on Schedule 4.02(w), all
     facilities used in connection with the operation of the businesses of
     Bingham and its Subsidiaries and all of the material assets of Bingham and
     its Subsidiaries except real property of a type classified as OREO (other
     real estate owned) on the Bingham's financial statements (i.e., foreclosed
     property not owned for the operation of the Bingham's business) are free
     from material defects (normal wear and tear excepted) and have been
     maintained in accordance with normal industry practice.

          (x) No Undisclosed Liabilities. Except as and to the extent set forth
     on Schedule 4.02(x) or reflected in the Bingham SEC Documents, and except
     for current liabilities incurred by Bingham or
                                       33
<PAGE>   34

     its Subsidiaries in connection with the operation of or with respect to
     their businesses in the ordinary course, since September 30, 1999, neither
     Bingham nor its Subsidiaries has incurred any debts, liabilities or
     obligations of any nature or kind (whether absolute, accrued, contingent,
     unliquidated or otherwise, whether or not known to Bingham, whether due or
     to become due and regardless of when asserted) arising out of transactions
     entered into, at or prior to the Closing, or any action or inaction at or
     prior to the Closing or any state of facts existing at or prior to the
     Closing and which could have a Bingham Material Adverse Effect. Except as
     set forth on Schedule 4.02(x), Bingham has no Knowledge of any existing,
     proposed or threatened change which could have a Bingham Material Adverse
     Effect. There are no contingent or other liabilities of Bingham or its
     Subsidiaries that have not been disclosed in the Schedules to this
     Agreement which could have a Bingham Material Adverse Effect.

          (y) Recent Conduct of Business; Interim Operations. Except as set
     forth on Schedule 4.02(y), since September 30, 1999, there has not been,
     and through the Effective Time, there shall not be, any Bingham Material
     Adverse Effect. Except as set forth on Schedule 4.02(y) or any other
     Schedule to this Agreement, since September 30, 1999, Bingham and its
     Subsidiaries have caused their businesses to be conducted only in the
     ordinary course. Except as set forth on Schedule 4.02(y) or any other
     Schedule to this Agreement, since September 30, 1999, Bingham and its
     Subsidiaries have not done any of the actions described in Sections 5.02
     (a) through (g), 5.02 (l) through (u) or 5.02(v) as Section 5.02(v) relates
     to Sections 5.02(a) through (g) and 5.02(l) through (u).

          (z) Brokerage or Finder's Fee. Except for Keefe Bruyette, no broker,
     finder, agent or similar intermediary has acted for or on behalf of Bingham
     in connection with this Agreement or the transactions contemplated hereby
     and, except for the fee payable to Keefe Bruyette by Bingham, no broker,
     finder, agent or similar intermediary is entitled to any broker's, finder's
     or similar fee or other commission in connection therewith based on any
     agreement, arrangement or understanding with Bingham or any action taken by
     Bingham.

          (aa) Disclosure. No representation or warranty by Bingham contained in
     this Agreement and no statement contained in any of the Attendant Documents
     or any other certificate or instrument furnished or to be furnished
     pursuant to this Agreement or in connection with the transactions
     contemplated in this Agreement contains or will contain any untrue
     statement of a material fact, or omits or will omit to state a material
     fact, necessary in order to make any of the statements not misleading.

          (bb) Capitalization. Bingham and each of its Subsidiaries has one
     class of capital stock, common stock, without par value, except for (i) DFI
     Alabama and DIA, which each have one class of capital stock, common stock,
     $0.01 par value per share, (ii) Hartger & Willard Mortgage Associates,
     Inc., which has one class of capital stock, common stock, $1.00 par value
     per share, and (iii) BAC and BSC, which are limited liability companies
     with one class of ownership interest. Schedule 4.02(bb) sets forth the
     number of authorized and the number of issued and outstanding shares of
     common stock of Bingham and each of its Subsidiaries. All of the shares of
     Bingham Stock and all of the shares of capital stock of each of its
     Subsidiaries have been duly authorized and validly issued, are fully paid
     and non-assessable and were issued by Bingham and its Subsidiaries without
     violating any requirements of law. Except as set forth on Schedule
     4.02(bb), (i) there are no preemptive or first refusal rights to purchase
     or otherwise acquire shares of Bingham Stock or capital stock of any of
     Bingham's Subsidiaries pursuant to the Governing Documents of Bingham or
     its Subsidiaries, by agreement or otherwise, (ii) there are no outstanding
     agreements, commitments, rights, options, warrants or claims of any nature
     whatsoever for the issuance, sale, purchase or redemption of any shares of
     Bingham Stock or capital stock of any of Bingham's Subsidiaries or any
     securities convertible into or exchangeable for such shares, and (iii)
     there are no stock appreciation rights or phantom stock rights outstanding
     with respect to the capital stock of Bingham or any of its Subsidiaries.

                                       34
<PAGE>   35

          (cc) No Knowledge. Except as set forth in Schedule 4.02(cc), Bingham
     has no Knowledge whatsoever that any of the representations or warranties
     of Bank are untrue in any material respect.

          (dd) Affiliate Transactions. Except as set forth on Schedule 4.02(dd),
     Bingham has not entered into any business transactions with any of its
     Affiliates.

                                   ARTICLE V

                                   COVENANTS

     Section 5.01 Bank's Forbearances From the date of this Agreement until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of Bingham, Bank will not, and will cause each of its
Subsidiaries not to:

          (a) Ordinary Course. Conduct the business of Bank and its Subsidiaries
     other than in the ordinary and usual course consistent with past practice
     or fail to use reasonable efforts to (i) preserve intact in any material
     respect their business organizations and assets, and (ii) maintain their
     rights, franchises and existing relations with customers, suppliers,
     employees and business associates, or take any action reasonably likely to
     materially impair Bank's ability to perform any of its obligations under
     this Agreement. Notwithstanding the fact that it has customarily done so in
     the past, Bank shall not make, declare, pay or set aside for payment any
     stock dividend on shares of Bank Stock; provided, however, that Bank may
     redeem its subordinated debt in accordance with the terms of the documents
     evidencing such debt.

          (b) Bank Stock. Other than pursuant to Bank Stock Options outstanding
     on the date of this Agreement as disclosed on Schedule 5.01(b) or Bank
     Stock Options issued to officers, employees or directors in the ordinary
     course of business, (i) issue, sell or otherwise permit to become
     outstanding, or authorize the creation of, any additional shares of Bank
     Stock or any Rights, or (ii) enter into any agreement with respect to the
     foregoing, provided, however, that Bank Stock Options and Bank Stock Plans
     may be amended in the ordinary course of business or as contemplated by
     this Agreement.

          (c) Other Securities. Issue any other capital securities, capital
     stock of any Subsidiary, debentures, or subordinated notes other than in
     the ordinary course of business.

          (d) Dividends, Etc. (i) Except for quarterly dividends (common or
     preferred) in the ordinary course of business, make, declare, pay or set
     aside for payment any dividend (other than dividends from wholly-owned
     Subsidiaries to Bank or another wholly-owned Subsidiary of Bank) on or in
     respect of, or declare or make any distribution on any shares of Bank Stock
     or (ii) directly or indirectly adjust, split, combine, redeem, reclassify,
     purchase or otherwise acquire, any shares of its capital stock or Rights.

          (e) Compensation; Employment Agreements, Etc. Except (i) for oral at
     will employment agreements, (ii) for normal individual increase in
     compensation to employees in the ordinary course of business consistent
     with past practice, (iii) for other changes that are required by applicable
     law, (iv) to satisfy contractual obligations existing as of the date hereof
     that are disclosed on Schedule 5.01(e) in the ordinary course of business,
     (v) otherwise in the ordinary course of business, or (vi) as contemplated
     by this Agreement, enter into or amend or renew any employment, consulting,
     severance or similar agreements or arrangements with any director, officer
     or employee of Bank or its Subsidiaries, or grant any salary or wage
     increase or increase any employee benefit (including incentive or bonus
     payments).

          (f) Benefit Plans. Except in the ordinary course of business and
     consistent with past practice, to provide incentive to directors, officers
     or employees, enter into, establish, adopt, renew, or amend (except as may
     be required by applicable law) any pension, profit sharing, employee stock
     ownership, retirement, stock option, stock appreciation, phantom stock,
     stock purchase, savings, deferred compensation, consulting, bonus, group
     insurance or other employee benefit, incentive or welfare contract, plan or
     arrangement, or any trust agreement (or similar arrangement) related
     thereto, in
                                       35
<PAGE>   36

     respect of any director, officer or employee of Bank or its Subsidiaries,
     or take any action to accelerate the vesting or exercisability of stock
     options or other compensation or benefits payable thereunder.
     Notwithstanding the foregoing, Bank shall expressly be allowed to amend its
     Bank Stock Options and Bank Stock Plans as set forth in the attached
     Schedule 5.01(f); provided, however, such amendment shall not result in the
     Holding Company or the Surviving Subsidiary having any liability as a
     result of changing the tax treatment in connection with the Bank Stock
     Options or the exercise thereof. Further, notwithstanding the foregoing,
     the Bank shall expressly be allowed to enter into a trust agreement
     establishing and funding trusts contemplated in the Severance Agreements;
     provided that such trust agreement shall provide that at such time as
     Severance Payments or Bank Board Severance Payments (defined below) are no
     longer payable to a beneficiary of the trusts established under such trust
     agreement, an amount equal to such Severance Payments or Bank Board
     Severance Payment, less the amount of trust funds used to pay such
     Severance Payments or Bank Board Severance Payments, shall be released from
     the trusts established under such trust agreement and paid to the Surviving
     Subsidiary; provided further, such trusts will be funded with funds of the
     Bank and the trustee of the trusts established under such trust agreement
     shall be reasonably acceptable to Bingham; and provided further, such trust
     agreement shall specifically provide that the trustee shall pay over the
     earnings of the trusts established thereunder to the Surviving Subsidiary
     as and when earned or as otherwise acceptable to Bingham.

          (g) Dispositions. Except as set forth in Schedule 4.01(y), sell,
     transfer, mortgage, encumber or otherwise dispose of or discontinue any of
     its material assets, deposits, business or properties except in the
     ordinary course of business for fair value consistent with past practice.

          (h) Acquisitions. Except in the ordinary and usual course of business
     consistent with past practice, acquire all or any portion of, the assets,
     business, deposits or properties of any Person or entity.

          (i) Governing Documents. Except as contemplated in this Agreement,
     amend the Governing Documents of Bank or any of its Subsidiaries.

          (j) Accounting Methods. Implement or adopt any change in its
     accounting principles, practices or methods, other than as may be required
     by generally accepted accounting principles.

          (k) Material Contracts. Except as permitted by Sections 5.01(e) and
     5.01(f), and to renew real and personal property leases in the ordinary
     course of business where the renewal option would otherwise expire, enter
     into or terminate any Material Contract or amend or modify in any material
     respect or renew any of its existing Material Contracts.

          (l) Claims. Except in the ordinary course of business consistent with
     past practice or involving an amount not in excess of $100,000, settle any
     claim, action or proceeding.

          (m) Foreclosure. Foreclose upon or otherwise take title to or
     possession or control of any real property without first having an
     environmental report thereon.

          (n) Deposit Taking and Other Bank Activities. In the case of Bank (i)
     voluntarily make any material changes in or to its deposit mix; (ii)
     increase or decrease the rate of interest paid on time deposits or on
     certificates of deposit, except in a manner consistent with prevailing
     banking practice or the Bank's existing strategic plan and year 2000
     budget; or (iii) incur any liability or obligation relating to retail
     banking and branch merchandising, marketing and advertising activities and
     initiatives materially in excess of the amounts previously disclosed to
     Bingham.

          (o) Facilities. Except as disclosed on Schedule 5.01(o) or as
     contemplated in the Bank's existing strategic plan and year 2000 budget, or
     as required for technology or facility upgrades, open any new offices or
     facilities or expand, close or relocate any existing office or facility.

          (p) Investments. Enter into any material securities transaction for
     its own account or purchase or otherwise acquire any material amount of
     investment securities for its own account except purchases and sales of
     securities consistent with past practice (including the Bank's existing
     strategic
                                       36
<PAGE>   37

     plan and year 2000 budget) in order to maintain investment portfolios at
     Bank and its Subsidiaries that have risk and asset mix characteristics
     substantially similar to those of the respective investment portfolios as
     of the date of this Agreement.

          (q) Capital Expenditures. Purchase or lease fixed assets where the
     amount paid or committed is in excess of $50,000 individually or $250,000
     in the aggregate.

          (r) Lending. Except as required by action of any Regulatory Authority
     (i) make any material changes in its policies concerning loan underwriting
     or which persons may approve loans as previously provided in writing to
     Bingham (except in the ordinary course of business consistent with past
     practice or prevailing banking practices) or fail to materially comply with
     such policies; or (ii) make or commit to make any new loan or letter of
     credit, or any new or additional discretionary advance under any existing
     loan or letter of credit, or restructure any existing loan or letter of
     credit in a manner inconsistent with past practice or customary safe and
     sound standards.

          (s) Acquisition of Loans. Except in the ordinary course of business
     and consistent with current policies and guidelines in effect as previously
     disclosed to Bingham, purchase any loan, loan participation or other
     interest in any loan.

          (t) Adverse Actions. (i) Take any action or fail to take any action
     while knowing that such action or inaction would, or is reasonably likely
     to, prevent or impede the Merger from qualifying as a reorganization within
     the meaning of Section 368(a) of the Code; or (ii) knowingly take any
     action or fail to take any action that is intended or is reasonably likely
     to result in (A) any of its representations and warranties set forth in
     this Agreement being or becoming untrue in any material respect at any time
     at or prior to the Effective Time except as expressly permitted by this
     Agreement, (B) any of the conditions to the Merger set forth in Article VI
     not being satisfied except as expressly permitted by this Agreement or (C)
     a material violation of any provision of this Agreement except, in each
     case, as may be required by applicable law or regulation.

          (u) Risk Management. Except as required by applicable law or as
     contemplated by the Bank's existing strategic plan and year 2000 budget,
     regulation, (i) implement or adopt any material change in its interest rate
     and other risk management policies, procedures or practices; (ii) fail to
     follow its existing policies or practices with respect to managing its
     exposure to interest rate and other risk; or (iii) fail to use commercially
     reasonable means to avoid any material increase in its aggregate exposure
     to interest rate risk.

          (v) Indebtedness. Incur any indebtedness for borrowed money other than
     in the ordinary course of business.

          (w) Commitments. Agree or commit to do any of the foregoing.

     Section 5.02 Bingham's Forbearances. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of Bank, Bingham will not, and will cause each of its
Subsidiaries not to:

          (a) Ordinary Course. Conduct the business of Bingham and its
     Subsidiaries other than in the ordinary and usual course consistent with
     past practice or fail to use reasonable efforts to (i) preserve intact in
     any material respect their business organizations and assets, and (ii)
     maintain their rights, franchises and existing relations with customers,
     suppliers, employees and business associates, or take any action reasonably
     likely to materially impair Bingham's ability to perform any of its
     obligations under this Agreement. Without limiting the foregoing, Bingham
     may not make, declare, pay or set aside for payment any stock dividend on
     shares of Bingham's capital stock. Notwithstanding the foregoing, Bingham
     may effectuate the DFI Restructuring Plan substantially on the terms set
     forth on Schedule 5.02(a) and may enter into commercially reasonable whole
     loan sales or loan securitizations.

          (b) Bingham Stock. Other than pursuant to options to purchase shares
     of Bingham Stock ("Bingham Stock Options") outstanding on the date of this
     Agreement as disclosed on Schedule 5.02(b) or Bingham Stock Options and
     other stock awards issued to officers, employees or
                                       37
<PAGE>   38

     directors in the ordinary course of business, (i) issue, sell or otherwise
     permit to become outstanding, or authorize the creation of, any additional
     shares of Bingham Stock or any Rights, or (ii) enter into any agreement
     with respect to the foregoing, provided, however, that options to purchase
     Bingham stock and Bingham's stock option plans may be amended in the
     ordinary course of business or as contemplated by this Agreement.

          (c) Other Securities. Issue any other capital securities, capital
     stock of any Subsidiary, debentures, or subordinated notes.

          (d) Dividends, Etc. (i) Except for dividends in the ordinary course of
     business, make, declare, pay or set aside for payment any dividend (other
     than dividends from wholly-owned Subsidiaries to Bingham or another
     wholly-owned Subsidiary of Bingham) on or in respect of, or declare or make
     any distribution on any shares of Bingham Stock or (ii) directly or
     indirectly adjust, split, combine, redeem, reclassify, purchase or
     otherwise acquire, any shares of its capital stock or Rights.

          (e) Compensation; Employment Agreements, Etc. Except (i) for oral at
     will employment agreements, (ii) for normal individual increase in
     compensation to employees in the ordinary course of business consistent
     with past practice, (iii) for other changes that are required by applicable
     law, (iv) to satisfy contractual obligations existing as of the date hereof
     that are disclosed on Schedule 5.02(e) in the ordinary course of business,
     (v) otherwise in the ordinary course of business, or (vi) as contemplated
     by this Agreement, enter into or amend or renew any employment, consulting,
     severance or similar agreements or arrangements with any director, officer
     or employee of Bingham or its Subsidiaries, or grant any salary or wage
     increase or increase any employee benefit (including incentive or bonus
     payments).

          (f) Benefit Plans. Except in the ordinary course of business and
     consistent with past practice to provide incentives to directors, officers
     or employees, enter into, establish, adopt, renew, or amend (except as may
     be required by applicable law) any pension, profit sharing, employee stock
     ownership, retirement, stock option, stock appreciation, phantom stock,
     stock purchase, savings, deferred compensation, consulting, bonus, group
     insurance or other employee benefit, incentive or welfare contract, plan or
     arrangement, or any trust agreement (or similar arrangement) related
     thereto, in respect of any director, officer or employee of Bingham or its
     Subsidiaries, or take any action to accelerate the vesting or
     exercisability of stock options or other compensation or benefits payable
     thereunder. Notwithstanding the foregoing, Bingham shall expressly be
     allowed to amend the Bingham Stock Plan in accordance with Section 3.06(c).

          (g) Dispositions. Except as set forth on Schedule 4.02(y), sell,
     transfer, mortgage, encumber or otherwise dispose of or discontinue any of
     its material assets, deposits, business or properties except in the
     ordinary course of business for fair value consistent with past practice.

          (h) Acquisitions. Except as set forth in Schedule 5.02(h) acquire all
     or any substantial portion of, the assets, business, deposits or properties
     of any Person or entity.

          (i) Governing Documents. Except as contemplated in this Agreement,
     amend the Governing Documents of Bingham or any of its Subsidiaries.

          (j) Accounting Methods. Implement or adopt any change in its
     accounting principles, practices or methods, other than as may be required
     by generally accepted accounting principles.

          (k) Material Contracts. Except as permitted by Section 5.02(e), and to
     renew real and personal property leases in the ordinary course of business
     where the renewal option would otherwise expire, enter into or terminate
     any Material Contract or amend or modify in any material respect or renew
     any of its existing Material Contracts.

          (l) Claims. Except: (i) in the ordinary course of business consistent
     with past practice; (ii) involving an amount not in excess of $100,000; or
     (iii) in connection with the DFI Restructuring Plan which, in the
     aggregate, involves an amount not in excess of $5,000,000, settle any
     claim, action or proceeding.
                                       38
<PAGE>   39

          (m) Foreclosure. Foreclose upon or otherwise take title to or
     possession or control of any real property without first having an
     environmental report thereon.

          (n) Facilities. Except as disclosed on Schedule 5.02(n), or as
     contemplated in Bingham's year 2000 budget or as required for technology or
     facility upgrades, open any new offices or facilities or expand, close or
     relocate any existing office or facility.

          (o) Investments. Enter into any material securities transaction for
     its own account or purchase or otherwise acquire any material amount of
     investment securities for its own account except purchases and sales of
     securities consistent with past practice (including Bingham's year 2000
     budget) in order to maintain investment portfolios at Bingham and its
     Subsidiaries that have risk and asset mix characteristics substantially
     similar to those of the respective investment portfolios as of the date of
     this Agreement.

          (p) Capital Expenditures. Except as set forth on Schedule 5.02(p),
     purchase or lease fixed assets where the amount paid or committed is in
     excess of $50,000 individually or $250,000 in the aggregate.

          (q) Lending. Except as required by action of any Regulatory Authority
     (i) make any material changes in its policies concerning loan underwriting
     or which persons may approve as previously provided in writing to Bank
     (except in the ordinary course of business consistent with past practice or
     prevailing lending practices) loans or fail to materially comply with such
     policies; or (ii) make or commit to make any new loan or letter of credit,
     or any new or additional discretionary advance under any existing loan or
     letter of credit, or restructure any existing loan or letter of credit in a
     manner inconsistent with past practice or customary safe and sound
     standards.

          (r) Acquisition of Loans. Except in the ordinary course of business
     and consistent with current policies and guidelines in effect as previously
     disclosed to Bank, purchase any loan, loan participation or other interest
     in any loan.

          (s) Adverse Actions. (i) Take any action or fail to take any action
     while knowing that such action or inaction would, or is reasonably likely
     to, prevent or impede the Merger from qualifying as a reorganization within
     the meaning of Section 368(a) of the Code; or (ii) knowingly take any
     action or fail to take any action that is intended or is reasonably likely
     to result in (A) any of its representations and warranties set forth in
     this Agreement being or becoming untrue in any material respect at any time
     at or prior to the Effective Time except as expressly permitted by this
     Agreement, (B) any of the conditions to the Merger set forth in Article VI
     not being satisfied except as expressly permitted by this Agreement or (C)
     a material violation of any provision of this Agreement except, in each
     case, as may be required by applicable law or regulation.

          (t) Risk Management. Except as required by applicable law or
     regulation or as contemplated by Bingham's year 2000 budget, (i) implement
     or adopt any material change in its interest rate and other risk management
     policies, procedures or practices; (ii) fail to follow its existing
     policies or practices with respect to managing its exposure to interest
     rate and other risk; or (iii) fail to use commercially reasonable means to
     avoid any material increase in its aggregate exposure to interest rate
     risk.

          (u) Indebtedness. Incur any indebtedness for borrowed money other than
     in the ordinary course of business.

          (v) Commitments. Agree or commit to do any of the foregoing.

     Section 5.03 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each Party agrees to use its reasonable efforts in good faith to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, desirable, or advisable to consummate the Merger and
all other transactions contemplated in this Agreement as promptly as
practicable. Each Party will cooperate fully with the other Parties to that end.
A Party's reasonable efforts will include, without limitation, (a) using
reasonable efforts to obtain all necessary consents, approvals or waivers from
Regulatory
                                       39
<PAGE>   40

Authorities necessary to consummate the Merger, including without limitation
making any revisions to loan reserves required by the Regulator, and (b)
opposing vigorously any litigation or administrative proceeding or directive
relating to this Agreement or the Merger, including, if necessary, promptly
appealing any adverse court or agency order.

     Section 5.04 Shareholder Approvals. Bingham and Bank agree to take, in
accordance with applicable law and NASD rules and their Governing Documents, all
action necessary to convene an appropriate meeting of their shareholders to
consider and vote upon, in the case of Bank, the adoption of this Agreement and
the approval of the Merger, and in the case of Bingham to approve (a) this
Agreement and the transactions it contemplates, including (i) the issuance of
Bingham Common Stock in the Merger, (ii) the conversion of Bank Stock Options
into Bingham stock options, (iii) the assumption of the Bank Stock Plans by
Bingham, and (iv) the amendment of the Bingham Stock Plan as contemplated in
Section 3.06 (c), and (b) a plan to reconstitute the Holding Company Board as
set forth in Section 5.14(a), and in each case any other matter required to be
approved by shareholders to consummate the Merger (including any adjournment or
postponement, the "Bingham Meeting" or "Bank Meeting", as applicable), in each
case as promptly as practicable after the Registration Statement is declared
effective (collectively, the "Shareholder Approvals"). The Bingham Board and the
Bank Board shall each recommend adoption or approval, and Bingham and Bank shall
take all reasonable, lawful action to solicit adoption or approval by its
shareholders, except to the extent that their fiduciary obligations require them
to do otherwise.

     Section 5.05 Registration Statement.

          (a) Bingham and Bank agree to jointly promptly prepare a registration
     statement on Form S-4 (the "Registration Statement") to be filed by them
     with the SEC in connection with the issuance of Bingham Common Stock in the
     Merger (including the joint proxy statement and prospectus and other
     necessary proxy solicitation materials of Bingham and Bank (the "Proxy
     Statement") and all related documents). Subject to compliance by Bingham
     and Bank with Sections 5.05(b) and (c), the Registration Statement will
     comply in all material respects with applicable federal securities laws.
     Bingham and Bank agree to cooperate, and to cause their Subsidiaries to
     cooperate, with each other, their counsel and their accountants, in
     preparing the Registration Statement and the Proxy Statement. Bingham and
     Bank agree to file the Registration Statement (or the form of the Proxy
     Statement) in preliminary form with the SEC as promptly as reasonably
     practicable and will use reasonable efforts to cause the filing to occur
     within 45 days after the Parties execute this Agreement. If the Proxy
     Statement is filed in preliminary form, the Registration Statement will be
     filed with the SEC as soon as reasonably practicable after any SEC comments
     with respect to the preliminary Proxy Statement are resolved. Each of Bank
     and Bingham agrees to use all reasonable efforts to cause the Registration
     Statement to be declared effective under the Securities Act as promptly as
     reasonably practicable after it is filed. Each of Bank and Bingham also
     agrees to use reasonable efforts to obtain, before the effective date of
     the Registration Statement, all state securities law or "Blue Sky" permits
     and approvals required to consummate the Merger. Each of Bank and Bingham
     agrees to give the other all information concerning it, its Subsidiaries,
     officers, directors and shareholders that the other reasonably requests in
     connection with the foregoing.

          (b) Each of Bank and Bingham agrees, as to itself and its
     Subsidiaries, that none of the information supplied or to be supplied by it
     for inclusion or incorporation by reference in (i) the Registration
     Statement will, at the time the Registration Statement and each amendment
     or supplement to it, if any, becomes effective under the Securities Act,
     contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, and (ii) the Proxy Statement and any
     amendment or supplement to it will, at the date of mailing to shareholders
     and at the time of the Bingham Meeting or the Bank Meeting, as the case may
     be, contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading or any statement that, in the light of
     the circumstances under which such statement is made, will be false or
     misleading with respect to any material fact, or that will omit to state
     any
                                       40
<PAGE>   41

     material fact necessary in order to make the statements therein not false
     or misleading or necessary to correct any statement in any earlier
     statement in the Proxy Statement or any amendment or supplement thereto.
     Each of Bank and Bingham further agrees to promptly inform the other if it
     becomes aware before the Effective Date of any information furnished by it
     that would cause any of the statements in the Proxy Statement to be false
     or misleading with respect to any material fact, or to omit to state any
     material fact necessary to make the statements therein not false or
     misleading, and to take the necessary steps to correct the Proxy Statement.

          (c) Bingham agrees to advise Bank, promptly after it receives notice
     thereof, if (i) any stop order has been issued or the Bingham Common Stock
     for offering or sale has been suspended or qualified in any jurisdiction or
     (ii) a threat of any proceeding for any such purpose has been initiated.

     Section 5.06 Proxy Solicitors. Each of Bingham and Bank, in consultation
with the other, will employ professional proxy solicitors to assist it in
contacting shareholders in connection with soliciting votes on the matters to be
considered and voted upon at the Bingham Meeting and Bank Meeting. Bank and
Bingham shall share equally all costs and fees associated with the retention of
proxy solicitors.

     Section 5.07 Access; Information.

          (a) Each of Bank and Bingham agrees that upon reasonable notice it
     shall afford the other Party and the other Party's Representatives such
     access during normal business hours throughout the period prior to the
     Effective Time to the books, records (including, without limitation, Tax
     Returns and work papers of independent auditors), properties, personnel and
     to such other information as any Party may reasonably request. During that
     period, it shall furnish promptly to the other Party (i) a copy of each
     material report, schedule and other document filed by it pursuant to the
     requirements of federal or state securities or banking laws, and (ii) all
     other information concerning the business, properties and personnel of it
     and its Subsidiaries as the other Party may reasonably request.

          (b) During the period from the date of this Agreement to the Effective
     Time, each of Bingham and Bank agrees to promptly give to the other copies
     of all monthly and other interim financial statements produced in the
     ordinary course of business as they become available.

          (c) Notwithstanding anything to the contrary set forth in this Section
     5.07 or otherwise, except with respect to the obligation of the Bank to
     provide the 1999 Work Papers to Bingham and its auditors, and Bingham and
     its auditors having the opportunity to review and approve the same, and
     except as set forth in a letter dated March 19, 2000 directed to the Bank
     by Bingham, each of Bank and Bingham acknowledges that it has completed its
     respective due diligence investigations in connection with the Merger and
     is satisfied with the results thereof. Accordingly, each agrees that
     neither has the right to terminate this Agreement except as provided in
     Article VIII or the letter described in the preceding sentence.

     Section 5.08 Exclusivity.

          (a) From and after the date of this Agreement until the Effective
     Time, neither Bank nor Bingham shall offer to sell its business, stock or
     assets to (a "Unilateral Offer"), or carry on negotiations with respect to
     the sale of its business, stock or assets with, any party other than the
     other Party or the other Party's Affiliates. Notwithstanding the foregoing
     sentence, either the Bank Board or the Bingham Board may consider
     unsolicited bona fide third-party offers to purchase its business, stock or
     assets ("Unsolicited Offers") if it determines in good faith after
     consultation with legal counsel that such action is necessary for it to act
     in a manner consistent with fiduciary duties under applicable law. If
     either Bingham or Bank receives an Unsolicited Offer, it must within 24
     hours of its receipt advise the other Party that it has received the
     Unsolicited Offer, disclose its terms (including the identity of the person
     making the Unsolicited Offer), and advise the other Party of any material
     developments concerning the Unsolicited Offer immediately as they occur.

          (b) Bank acknowledges that Bingham has filed an application with the
     OTS seeking a charter (the "OTS Charter") to become a Federal Savings Bank.
     Bank acknowledges that Bingham's pursuit

                                       41
<PAGE>   42

     of the Merger may jeopardize attainment of the OTS Charter and that
     significant incurred expenses will be lost by Bingham without benefit. In
     consideration of these events, Bingham's execution of this Agreement,
     Bingham's expenses incurred in connection with this Agreement and the
     Merger, and lost opportunities incurred by Bingham as the result of
     pursuing the Merger, Bank shall pay $3,000,000 to Bingham as liquidated
     damages (and not as a penalty) if before the Effective Time, (i) Bank makes
     a Unilateral Offer or enters into negotiations with respect to a Unilateral
     Offer or an Unsolicited Offer, and (ii) the Merger is abandoned or
     terminated by Bank as a result of considering that Unilateral Offer or
     Unsolicited Offer. Bingham and Bank acknowledge that Bingham's damages if
     the Merger is abandoned or terminated as described in this clause would be
     incapable of accurate calculation and that $3,000,000 is a reasonable
     estimate of Bingham's actual damages.

          (c) In consideration of Bank's execution of this Agreement, Bank's
     expenses incurred in connection with this Agreement and the Merger, and
     lost opportunities incurred by Bank as the result of pursuing the Merger,
     Bingham shall pay $3,000,000 to Bank as liquidated damages (and not as a
     penalty) if before the Effective Time, (i) Bingham makes a Unilateral Offer
     or enters into negotiations with respect to a Unilateral Offer or an
     Unsolicited Offer, and (ii) the Merger is abandoned or terminated by
     Bingham as a result of considering that Unilateral Offer or Unsolicited
     Offer. Bingham and Bank acknowledge that Bank's damages if the Merger is
     abandoned or terminated as described in this clause would be incapable of
     accurate calculation and that $3,000,000 is a reasonable estimate of Bank's
     actual damages.

     Section 5.09 Takeover Laws. No Party may take any action that would cause
the transactions contemplated by this Agreement to be subject to requirements
imposed by any "moratorium", "control share", "fair price", "affiliate
transactions", "business combination" or other anti-takeover laws or regulations
("Takeover Laws") and each Party will take all necessary steps within its
control to exempt (or ensure the continued exemption of) the transactions
contemplated by this Agreement from, or if necessary, challenge the validity or
applicability of, any applicable Takeover Law, as now or hereafter in effect.

     Section 5.10 Listing. Bingham agrees to use its reasonable efforts before
the Effective Time and subject to official notice of issuance, to list all
shares of Bingham Common Stock, including the shares to be issued in the Merger,
on the NASDAQ National Market.

     Section 5.11 Regulatory Applications.

          (a) Bingham and Bank and their respective Subsidiaries will cooperate
     and use their reasonable efforts to (i) promptly prepare all documentation,
     to effect all filings and to obtain all permits, consents, approvals and
     authorizations of all third parties and Governmental Authorities necessary
     to consummate the transactions contemplated by this Agreement, and (ii)
     file within 45 days of the date of this Agreement, the applications
     necessary to obtain the permits, consents, approvals and authorizations of
     all Regulatory Authorities necessary to consummate the Merger. Each of
     Bingham and Bank may review in advance, and to the extent practicable each
     will consult with the other with respect to all material written
     information submitted to any third party or any Governmental Authority in
     connection with the transactions contemplated by this Agreement. In
     exercising the foregoing right, each Party agrees to act reasonably and as
     promptly as practicable. Each of Bingham and Bank agrees that it will
     consult with the other with respect to the obtaining of all material
     permits, consents, approvals and authorizations of all third parties and
     Governmental Authorities necessary or advisable to consummate the
     transactions contemplated by this Agreement. Each of Bingham and Bank will
     keep the other apprised of the status of material matters relating to
     completion of the transactions contemplated by this Agreement.

          (b) Each of Bingham and Bank agrees, upon request, to furnish the
     other with all information concerning itself, its Subsidiaries, directors,
     officers and shareholders and such other matters as may be reasonably
     necessary or advisable in connection with any filing, notice or application
     made by or on behalf of such other party or any of its Subsidiaries to any
     third party or Governmental Authority.

                                       42
<PAGE>   43

     Section 5.12 Benefit Plans. At the Effective Time, Bingham shall be
substituted for Bank or a Bank Subsidiary as the sponsoring employer under those
employee benefit and welfare plans with respect to which Bank or any of its
Subsidiaries is a sponsoring employer, and any other employee benefit programs,
policies, agreements and arrangements of Bank or its Subsidiaries in effect
immediately prior to the Effective Time (collectively, the "Bank Arrangements").
Bingham shall assume and be vested with all of the powers, rights, duties,
obligations and liabilities previously vested in Bank or the applicable Bank
Subsidiary with respect to each such Bank Arrangement. Except as otherwise
provided in this Agreement, and except as otherwise covered under the Bank
Arrangements, each such Bank Arrangement shall be continued in effect by Bingham
after the Effective Time without a termination or discontinuance thereof as a
result of the Merger, subject to the power reserved to Bingham under each such
Bank Arrangement to subsequently amend or terminate the Bank Arrangement, which
amendments or terminations shall comply with applicable law. Bank, each Bank
Subsidiary, and Bingham will use all reasonable efforts (i) to effect said
substitutions and assumptions, and such other actions contemplated under this
Agreement, and (ii) to amend such Bank Arrangements to the extent necessary to
provide for said substitutions and assumptions, and such other actions
contemplated under this Agreement.

     Section 5.13 Notification of Certain Matters. Each of Bank and Bingham
shall give prompt notice to the other of any fact, event or circumstance known
to it that (a) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Bank
Material Adverse Effect or Bingham Material Adverse Effect, respectively, (b)
would cause or constitute a material breach of any of its representations,
warranties, covenants or agreements in this Agreement as of the date of this
Agreement or (c) would cause or constitute a material breach of any of its
representations, warranties, covenants or agreements in this Agreement, arising
from events or circumstances after the date of this Agreement or otherwise.

     Section 5.14 Holding Company Board

          (a) At the Effective Time, Bingham shall cause the Holding Company
     Board to be reconstituted to consist of twelve directors, six of which will
     be designated by Bingham and five of which will be designated by Bank prior
     to the Effective Time. Of the five directors appointed by Bank, the term of
     two will expire on the date of the first annual meeting of the Holding
     Company after the Effective Date, the terms of two will expire on the date
     of the second annual meeting of the Holding Company after the Effective
     Date, and the term of the fifth will expire on the date of the third annual
     meeting of the Holding Company after the Effective Date. The twelfth
     director shall be the CEO of the Surviving Subsidiary. Before the Effective
     Time, Bank and Bingham shall identify their designees for the Holding
     Company Board on Schedule 5.14(a), which Schedule shall also set forth the
     initial term of each director.

          (b) Schedule 5.14(b) lists all the Severance Agreements, the amount of
     all Severance Payments, and the amount of the Severance Payments that would
     be due to each of the current non-employee directors of Bank (the "Current
     Non-Employee Bank Directors") if each such Current Non-Employee Bank
     Director were to be terminated on December 31, 2000 (the "Bank Board
     Severance Payments"). At or before the Effective Time, any Current
     Non-Employee Bank Director that is designated by Bank to serve as a
     director of the Holding Company after the Effective Time pursuant to
     Section 5.14(a) above, shall enter into a new severance agreement with the
     Holding Company substantially in the form of Exhibit A attached hereto (the
     "New Holding Company Severance Agreement") which provides, among other
     things, that (i) such Current Non-Employee Bank Director's current
     Severance Agreement with Bank will be terminated if he or she is elected to
     the Holding Company Board at or around the Effective Date and will be
     replaced with the New Holding Company Severance Agreement; (ii) the
     aggregate amount of Bank Board Severance Payments payable to such Current
     Non-Employee Bank Director at any time after the Effective Time will not
     exceed the aggregate amount of Bank Board Severance Payments to be paid to
     such person as shown on Schedule 5.14(b); (iii) subject to clause (v) of
     this Section 5.14(b), such Current Non-Employee Bank Director who serves as
     a Holding Company director after the Effective Date shall be entitled to
     receive the Bank Board Severance Payments shown for such person on Schedule
     5.14(b) if he or she

                                       43
<PAGE>   44

     resigns from, fails to be re-elected to or is removed from the Holding
     Company Board within two years of the Effective Date, and the New Holding
     Company Severance Agreement with such Current Non-Employee Bank Director
     who serves as a Holding Company director after such two-year period shall
     thereupon terminate and he or she shall not be entitled to any Bank Board
     Severance Payments whatsoever; (iv) subject to clause (v) of this Section
     5.14(b), any Current Non-Employee Bank Director who is elected to a term on
     the Holding Company Board expiring more than two years after the Effective
     Date but who dies before the second anniversary of the Effective Date shall
     be entitled to receive the Bank Board Severance Payments shown for such
     person on Schedule 5.14(b); (v) notwithstanding any provisions of clauses
     (iii) or (iv) of this Section 5.14(b) to the contrary, in the event a
     Current Non-Employee Bank Director who is elected to serve on the Holding
     Company Board for a term expiring on the date of the first annual meeting
     of the Holding Company after the Effective Date and who is also serving on
     the Surviving Subsidiary Board on the Effective Date shall be elected to
     serve on the Holding Company Board after the first annual meeting of the
     Holding Company after the Effective Date, such Current Non-Employee Bank
     Director shall no longer be entitled to any Bank Board Severance Payments
     whatsoever, provided, however, that such person will not lose his
     eligibility for Bank Board Severance Payments by virtue of serving a second
     and/or third year on the Surviving Subsidiary Board as long as he is not
     then serving on the Holding Company Board; and (vi) such Current
     Non-Employee Bank Director shall not be entitled to cancel his or her Bank
     Stock Options and receive payments in connection therewith by reason of the
     occurrence of the Merger, or otherwise, unless Bingham elects to have such
     Bank Stock Options cancelled and cause payments to be made in connection
     therewith.

     Section 5.15 Surviving Subsidiary Board

          (a) At the Effective Time, the Surviving Subsidiary Board shall be
     constituted so that four members of the Surviving Subsidiary Board will be
     designated by Bank plus one shall be the CEO of the Surviving Subsidiary,
     who shall be selected with the mutual consent of Bingham and Bank. The
     remaining six members of the Surviving Subsidiary Board will be designated
     by Bingham. In addition to designating four of the Surviving Subsidiary
     directors after the Closing, Bank will be entitled to designate one
     non-voting observer to the Surviving Subsidiary Board to serve at the
     Surviving Subsidiary Board's discretion, who shall be entitled to receive
     all materials and information provided to the Surviving Subsidiary
     directors, shall be entitled to attend Surviving Subsidiary Board meetings
     and shall be paid as if he were a Surviving Subsidiary director. Before the
     Effective Time, Bank and Bingham shall identify their designees for the
     Surviving Subsidiary Board on Schedule 5.15(a). Bingham shall use its
     reasonable efforts to re-nominate the members of the Surviving Subsidiary
     Board designated by the Bank for two successive one year terms following
     the term commencing on, or running at the time of, the Effective Date.

          (b) At or before the Effective Time, any Current Non-Employee Bank
     Director that is designated by Bank to serve as a director of Bank after
     the Effective Time pursuant to Section 5.15(a) above, shall enter into a
     new severance agreement with Bank substantially in the form of Exhibit B
     attached hereto (the "New Bank Severance Agreement") which provides, among
     other things, that (i) such Current Non-Employee Bank Director's current
     Severance Agreement with Bank will be terminated if he or she is elected to
     the Bank Board at or around the Effective Date and will be replaced with
     the New Bank Severance Agreement; (ii) the aggregate amount of Bank Board
     Severance Payments payable to each such Current Non-Employee Bank Director
     at any time after the Effective Time will not exceed the aggregate amount
     of Bank Board Severance Payments to be paid to such person as shown on
     Schedule 5.14(b); (iii) such Current Non-Employee Bank Director who serves
     as a director of the Surviving Subsidiary but not as a director of the
     Holding Company after the Effective Date shall be entitled to receive all
     Bank Board Severance Payments shown for such person on Schedule 5.14(b) if
     he or she resigns from, is removed from or fails to be re-elected to the
     Surviving Subsidiary Board through a period ending three years after the
     Effective Date; (iv) at the expiration of that three-year period, the New
     Bank Severance Agreement with such Current Non-Employee Bank Director shall
     terminate if he or she continues to serve as a director of

                                       44
<PAGE>   45

     Surviving Subsidiary and he or she shall not be entitled to any Bank Board
     Severance Payments whatsoever; and (v) such Current Non-Employee Bank
     Director shall not be entitled to cancel his or her Bank Stock Options and
     receive payments in connection therewith by reason of the occurrence of the
     Merger, or otherwise, unless Bingham elects to have such Bank Stock Options
     cancelled and cause payments to be made in connection therewith.
     Notwithstanding anything to the contrary set forth in this Section 5.15(b),
     in the event that any Current Non-Employee Bank Director shall no longer be
     entitled to any Bank Board Severance Payments pursuant to clause (v) of
     Section 5.14(b) above, such Current Non-Employee Bank Director shall not be
     entitled to any Bank Board Severance Payments by virtue of any provision of
     this Section 5.15(b).

     Section 5.16 Management

          (a) Bingham and Bank contemplate that, after the Effective Date (i)
     Ronald A. Klein will continue to be the President and CEO of the Holding
     Company, (ii) Gary A. Shiffman will continue to be the Chairman of the
     Board of the Holding Company and (iii) David F. Simon will be an Executive
     Vice President of the Holding Company.

          (b) Before the Effective Time, the person who will serve as the CEO of
     the Surviving Subsidiary after the Effective Date will be appointed with
     the consent of both Bingham and Bank. Bingham and Bank contemplate that
     David F. Simon will serve as Chairman of the Board of the Surviving
     Subsidiary after the Effective Date in accordance with the terms and
     conditions of his employment agreement with Bank.

     Section 5.17 Appointment of Independent ESOP Trustee; Meeting of ESOP
Participants. Bank shall appoint an independent trustee of the ESOP (the "ESOP
Trustee") to take all actions necessary in accordance with applicable law and
the terms of the ESOP to convene a meeting of the ESOP participants to consider
the approval of this Agreement and the transactions contemplated hereby
(including the Merger and issuance of Bingham Common Stock to be issued in the
Merger), before the Bank Meeting. The ESOP Trustee shall vote any and all shares
of Bank Common Stock owned by the ESOP pursuant to the terms of the ESOP and
applicable law (including, without limitation, securities laws and applicable
provisions of ERISA, the Code and regulations promulgated thereunder).

                                   ARTICLE VI

                               CLOSING CONDITIONS

     Section 6.01 Conditions Precedent to Each Party's Obligation. The
respective obligation of each of Bingham and Bank to consummate the transactions
contemplated in this Agreement at the Closing is subject to the satisfaction of
all of the following conditions, any of which may be waived in writing by the
Party not responsible for satisfying the condition, or by both Parties if they
are both responsible for satisfying the condition:

          (a) Shareholder Approvals. The Shareholder Approvals shall have been
     obtained.

          (b) Regulatory Approvals. The Regulator shall have approved the Merger
     in accordance with applicable law. All consents, approvals, authorizations,
     designations, declarations, filings and notices set forth on Schedules
     4.01(b) and 4.02(b) shall have been obtained or made and shall remain in
     full force and effect and all statutory waiting periods with respect
     thereto shall have expired and no such approvals shall contain (i) any
     conditions, restrictions or requirements which the Bingham Board or the
     Bank Board reasonably determines would either before or after the Effective
     Time have a Bingham Material Adverse Effect or a Bank Material Adverse
     Effect or (ii) any conditions, restrictions or requirements that are not
     customary and usual for approvals of such type and which the Bingham Board
     or the Bank Board reasonably determines would either before or after the
     Effective Time be unduly burdensome.

          (c) No Injunction. No Governmental Authority of competent jurisdiction
     shall have enacted, issued, promulgated, enforced or entered any statute,
     rule, regulation, judgment, decree, injunction or


                                       45
<PAGE>   46

     other order (whether temporary, preliminary or permanent) which is in
     effect and prohibits consummation of the Merger.

          (d) Registration Statement. The Registration Statement shall have
     become effective under the Securities Act and no stop order suspending the
     effectiveness of the Registration Statement shall have been issued and no
     proceedings for that purpose shall have been initiated or threatened by the
     SEC.

          (e) Blue Sky Approvals. All permits and other authorizations under
     state securities laws necessary to consummate the transactions contemplated
     hereby and to issue the shares of Bingham Common Stock to be issued in the
     Merger shall have been received and be in full force and effect.

          (f) Listing. The shares of Bingham Common Stock to be issued in the
     Merger shall have been approved for listing on the NASDAQ National Market,
     subject to official notice of issuance.

          (g) Litigation. There shall not be any litigation, action, suit,
     claim, proceeding, order, investigation or inquiry pending or threatened
     before any court or quasi-judicial or administrative agency to, or pursuant
     to which a judgment, order, decree, stipulation, injunction or charge could
     be entered, which could enjoin or prevent the consummation of the Merger or
     cause any of the transactions contemplated in this Agreement or the
     Attendant Documents to be rescinded following consummation thereof.

          (h) Surviving Subsidiary CEO. The Bingham Board and the Bank Board
     shall have each approved the selection of, and compensation arrangement
     for, the Surviving Subsidiary's CEO.

          (i) No Change to Business Plan. There shall have been no material
     change to the business plan of the Surviving Subsidiary previously approved
     by the Bingham Board and the Bank Board, unless the Bingham Board and the
     Bank Board approve such change before the Effective Time.

          (j) The Holding Company Board and the Surviving Subsidiary Board shall
     have been reconstituted as provided in Sections 5.14(a) and 5.15(a),
     respectively. The persons identified on Schedules 5.14(a) and 5.15(a) and
     Sections 5.16(a) and 5.16(b) shall have been appointed to the Holding
     Company Board and the Surviving Subsidiary Board or to serve as an officer
     of the Holding Company or the Surviving Subsidiary, as applicable, to serve
     until their respective successors are duly elected and have qualified.

     Section 6.02 Conditions Precedent to Bank's Obligation. The obligation of
Bank to consummate the transactions contemplated in this Agreement at the
Closing is subject to the satisfaction of all of the following conditions, any
of which may be waived in writing by Bank:

          (a) Representations and Warranties. All representations and warranties
     made by Bingham in this Agreement shall have been true and correct in all
     material respects on the date of this Agreement and shall be true and
     correct in all material respects as of the Effective Date with the same
     force and effect as if they had been made on and as of such date.

          (b) Performance of Obligations of Bingham. Bingham and its
     Subsidiaries shall have performed in all material respects all obligations
     required to be performed by them under this Agreement at or prior to the
     Effective Time.

          (c) Approvals. Bingham shall have obtained, performed or given all of
     the consents, approvals, authorizations, designations, declarations,
     filings and notices set forth on Schedule 4.02(b), in accordance with the
     terms and conditions of this Agreement.

          (d) Updating of Disclosure Schedules. From the date of this Agreement
     until the Effective Time, Bingham shall have updated all of the Schedules
     to this Agreement and shall have promptly notified Bank of any changes or
     additions or events which may cause any material change or addition to any
     such Schedules or in any representation or warranty made pursuant to
     Section 4.02. Subject to the other provisions of this Section 6.02(d),
     neither the immediately preceding sentence nor any notice by Bingham
     pursuant to this Section 6.02(d) shall be deemed in any way to constitute a
     waiver by Bank of the condition set forth in Section 6.02(a).

                                       46
<PAGE>   47

          (e) Termination. This Agreement shall not have been terminated
     pursuant to Article VIII.

          (f) Delivery of Closing Documents. Bingham shall have executed and
     delivered, or caused to be executed and delivered, all of the documents
     described in Section 7.03. All documents relating to the transactions
     contemplated in this Agreement shall be reasonably satisfactory in form and
     content to Bank and its legal counsel.

          (g) Operation of Business and Material Adverse Effect. Bingham and its
     Subsidiaries shall have continued to operate their businesses in the
     ordinary course through the Effective Time. Since the date of this
     Agreement, no change shall have occurred which could have a Bingham
     Material Adverse Effect.

     Section 6.03 Conditions to Bingham's Obligation. The obligation of Bingham
to consummate the transactions contemplated in this Agreement at the Closing is
subject to the satisfaction of all of the following conditions, any of which may
be waived in writing by Bingham:

          (a) Representations and Warranties. All representations and warranties
     made by Bank in this Agreement shall have been true and correct in all
     material respects on the date of this Agreement and shall be true and
     correct in all material respects as of the Effective Date with the same
     force and effect as if they had been made on and as of such date.

          (b) Performance of Obligations of Bank. Bank shall have performed in
     all material respects all obligations required to be performed by it under
     this Agreement at or prior to the Effective Time.

          (c) Approvals. Bank shall have obtained, performed or given all of the
     consents, approvals, authorizations, designations, declarations, filings
     and notices set forth on Schedule 4.01(b), in accordance with the terms and
     conditions of this Agreement.

          (d) Updating of Disclosure Schedules. From the date of this Agreement
     until the Effective Time, Bank shall have updated all of the Schedules to
     this Agreement and shall have promptly notified Bingham of any changes or
     additions or events which may cause any material change or addition to any
     such Schedules or in any representation or warranty made pursuant to
     Section 4.01. Subject to the other provisions of this Section 6.03(d),
     neither the immediately preceding sentence nor any notice by Bank pursuant
     to this Section 6.03(d) shall be deemed in any way to constitute a waiver
     by Bingham of the condition set forth in Section 6.03(a).

          (e) Termination. This Agreement shall not have been terminated
     pursuant to Article VIII.

          (f) Delivery of Closing Documents. Bank shall have executed and
     delivered, or caused to be executed and delivered, all of the documents
     described in Section 7.02. All documents relating to the transactions
     contemplated in this Agreement shall be reasonably satisfactory in form and
     content to Bingham and its legal counsel.

          (g) Operation of Business and Material Adverse Change. Bank and its
     Subsidiaries shall have continued to operate their businesses in the
     ordinary course through the Effective Time. Since the date of this
     Agreement, no change shall have occurred which could have a Bank Material
     Adverse Effect.

          (h) Compensation Amendments. The New Holding Company Severance
     Agreements and the New Bank Severance Agreements as contemplated by
     Sections 5.14(b) and 5.15(b) shall have been executed and delivered by the
     applicable Current Non-Employee Bank Directors.

          (i) ESOP Compliance. The ESOP Trustee shall have complied with all
     provisions of the Governing Documents of the ESOP and all provisions of
     applicable law necessary for the consummation of the transactions
     contemplated by this Agreement.

                                       47
<PAGE>   48

                                  ARTICLE VII

                                    CLOSING

     Section 7.01 Closing. The closing (the "Closing") of the transactions
contemplated in this Agreement shall take place as soon as reasonably possible
following execution of the Agreement and the satisfaction of each of the
conditions precedent set forth in Article VI; provided, however, that in no
event shall the Closing take place after the Walk Away Date. The Parties shall
mutually agree on the date of the Closing consistent with the immediately
preceding sentence. As used in this Agreement, the "Effective Date" means the
date on which the Closing actually occurs and "Effective Time" means the time on
the Effective Date when the Merger becomes effective. The Closing shall take
place at the offices of Bingham's counsel, Jaffe, Raitt, Heuer & Weiss,
Professional Corporation, One Woodward Avenue, Suite 2400, Detroit, Michigan, or
at such other location and in such other manner as the Parties may mutually
agree.

     Section 7.02 Deliveries at Closing by Bank. At the Closing, Bank shall
properly execute (if necessary) and deliver to Bingham, or cause to be executed
and delivered to Bingham, the following:

          (a) An opinion of Bodman, Longley & Dahling LLP, counsel to Bank,
     addressed to Bingham, in form and substance reasonably satisfactory to
     Bingham and its counsel to the effect that, among other things: (i) the
     Merger will qualify as a tax-free "reorganization" under Section 368(a) of
     the Internal Revenue Code, (ii) no gain or loss will be recognized by Bank
     or Bingham by reason of the Merger, (iii) no gain or loss will be
     recognized by any shareholder of Bank upon the exchange of Bank Common
     Stock solely for Bingham Common Stock in the Merger, (iv) the basis of the
     Bingham Common Stock received by each Bank shareholder who exchanges Bank
     Common Stock for Bingham Common Stock in the Merger will be the same as the
     shareholder's basis in the Bank Common Stock surrendered in exchange
     therefor (subject to any adjustments required as the results of receipt of
     cash in lieu of a fractional share of Bingham Common Stock), (v) the
     holding period of the Bingham Common Stock received by each Bank
     shareholder in the Merger will include the holding period of the Bank
     Common Stock surrendered in exchange therefor, provided that such shares of
     Bank Common Stock were held as a capital asset by such shareholder at the
     Effective Time, (vi) cash received by each Bank shareholder in lieu of a
     fractional share interest of Bingham Common Stock as part of the Merger
     will be treated as having been received as a distribution in full payment
     in exchange for the fractional share interest of Bingham Common Stock which
     such shareholder would otherwise be entitled to receive and will qualify as
     capital gain or loss (assuming the Bank Common Stock was a capital asset in
     such shareholder's hands at the Effective Time), and (vii) Franklin Finance
     qualifies as a real estate investment trust under the Code.

          (b) A copy of each of Bank's Governing Documents, certified when
     applicable by the OCC, and a Certificate of Good Standing (or analogous
     document) for Bank issued by every state in which it is authorized to do
     business. All such documents shall be dated not earlier than 30 days prior
     to the Effective Date.

          (c) The resignations of each officer and director of Bank and its
     Subsidiaries other than those who, with Bingham's and Bank's consent,
     desire to remain as officers or directors of the Surviving Subsidiary and
     its Subsidiaries.

          (d) Bank's Certificates.

             (i) A "Closing Certificate", executed by an officer of Bank, to the
        effect that (A) all of the representations and warranties made by Bank
        in this Agreement are true and correct in all material respects on the
        Effective Date with the same force and effect as though made on and as
        of the Effective Date, (B) Bank has performed and complied in all
        material respects with all of its obligations under this Agreement which
        are to have been performed or complied with on or before the Effective
        Date, (C) since the date of this Agreement, Bank and its Subsidiaries
        have operated their businesses only in the ordinary course, and (D)
        there has been no Bank Material Adverse Effect from the date of this
        Agreement to the Effective Date.

                                       48

<PAGE>   49

             (ii) A "Secretary's Certificate", executed by the Secretary or
        Assistant Secretary of Bank, attaching a copy of Bank's Governing
        Documents and copies of the resolutions of the Bank Board and the Bank's
        shareholders approving the transactions contemplated in this Agreement.
        The officer executing such certificate shall certify that, as of the
        Effective Date, such Governing Documents and resolutions are true,
        complete and correct, have not been altered or repealed and are in full
        force and effect.

          (e) Such other documents and instruments as are contemplated in this
     Agreement (or as the Parties have contemplated in connection with this
     Agreement) or as Bingham or its counsel may reasonably request in order to
     evidence or consummate the transactions contemplated in this Agreement or
     to effectuate the purpose or intent of this Agreement.

     Section 7.03 Deliveries at Closing by Bingham. At the Closing, Bingham
shall properly execute (if necessary) and deliver to Bank, or cause to be
executed and delivered to Bank, the following:

          (a) An opinion of Jaffe, Raitt, Heuer & Weiss, Professional
     Corporation, counsel to Bingham and Merger Sub, addressed to Bank, in form
     and substance reasonably satisfactory to Bank and its counsel to the effect
     that, among other things: (i) the Merger will qualify as a tax-free
     "reorganization" under Section 368(a) of the Internal Revenue Code, (ii) no
     gain or loss will be recognized by Bank or Bingham by reason of the Merger,
     (iii) no gain or loss will be recognized by any shareholder of Bank upon
     the exchange of Bank Common Stock solely for Bingham Common Stock in the
     Merger, (iv) the basis of the Bingham Common Stock received by each Bank
     shareholder who exchanges Bank Common Stock for Bingham Common Stock in the
     Merger will be the same as the shareholder's basis in the Bank Common Stock
     surrendered in exchange therefor (subject to any adjustments required as
     the results of receipt of cash in lieu of a fractional share of Bingham
     Common Stock), (v) the holding period of the Bingham Common Stock received
     by each Bank shareholder in the Merger will include the holding period of
     the Bank Common Stock surrendered in exchange therefor, provided that such
     shares of Bank Common Stock were held as a capital asset by such
     shareholder at the Effective Time, and (vi) cash received by each Bank
     shareholder in lieu of a fractional share interest of Bingham Common Stock
     as part of the Merger will be treated as having been received as a
     distribution in full payment in exchange for the fractional share interest
     of Bingham Common Stock which such shareholder would otherwise be entitled
     to receive and will qualify as capital gain or loss (assuming the Bank
     Common Stock was a capital asset in such shareholder's hands at the
     Effective Time) and (vii) Franklin Finance qualifies as a real estate
     investment trust under the Code.

          (b) The Merger Consideration to the Exchange Agent.

          (c) A copy of Bingham's articles of incorporation, certified by the
     Michigan Department of Consumer and Industry Services, a copy of Merger
     Sub's Governing Documents, certified, when applicable, by the appropriate
     Governmental Authority and a Certificate of Good Standing (or analogous
     document) for Bingham and Merger Sub issued by every state in which each is
     authorized to do business. All such documents shall be dated not earlier
     than 30 days prior to the Effective Date.

          (d) Bingham's Certificates.

             (i) A "Closing Certificate", executed by an officer of Bingham, to
        the effect that (A) all of the representations and warranties made by
        Bingham in this Agreement are true and correct in all material respects
        on the Effective Date with the same force and effect as though made on
        and as of the Effective Date, (B) Bingham has performed and complied in
        all material respects with all of its obligations under this Agreement
        which are to have been performed or complied with on or before the
        Effective Date, (C) since the date of this Agreement, Bingham and its
        Subsidiaries have operated their businesses only in the ordinary course,
        and (D) there has been no Bingham Material Adverse Effect from the date
        of this Agreement to the Effective Date.

             (ii) "Secretary's Certificates", executed by the Secretary or
        Assistant Secretary of each of Bingham and Merger Sub, attaching a copy
        of the Governing Documents of such company and,

                                       49
<PAGE>   50

        in the case of Bingham, a copy of the resolutions of the Bingham Board
        approving the transactions contemplated in this Agreement and a copy of
        the resolutions of Bingham's shareholders approving the issuance of
        Bingham Common Stock to be issued in the Merger, and, in the case of
        Merger Sub, a copy of the resolutions of its board of directors and
        shareholders approving the transactions contemplated in this Agreement.
        The officer executing each such certificate shall certify that, as of
        the Effective Date, such Governing Documents and resolutions are true,
        complete and correct, have not be altered or repealed and are in full
        force and effect.

          (e) Such other documents and instruments as are contemplated in this
     Agreement (or as the Parties have contemplated in connection with this
     Agreement) or as Bank or its counsel may reasonably request in order to
     evidence or consummate the transactions contemplated in this Agreement or
     to effectuate the purpose or intent of this Agreement.

                                  ARTICLE VIII

                                  TERMINATION

     Section 8.01 Termination. This Agreement may be terminated:

          (a) at any time before the Effective Time by the mutual consent of the
     Parties;

          (b) at any time before the Effective Time by Bank (i) if any of the
     conditions set forth in Sections 6.01 or 6.02 have not been fulfilled,
     satisfied or waived by the Walk Away Date, or (ii) if Bingham materially
     breaches any representation, warranty, covenant or agreement set forth in
     this Agreement;

          (c) at any time before the Effective Time by Bingham (i) if any of the
     conditions set forth in Sections 6.01 or 6.03 have not been fulfilled,
     satisfied or waived by the Walk Away Date, or (ii) if Bank materially
     breaches any representation, warranty, covenant or agreement set forth in
     this Agreement;

          (d) by Bank or by Bingham, if such Party's board of directors so
     determines by a vote of a majority of the members of its entire board, in
     the event (i) the approval of any Governmental Authority required for
     consummation of the Merger shall have been denied by final nonappealable
     action of such Governmental Authority or (ii) any shareholder approval
     required by Section 5.04 is not obtained at the Bank Meeting or the Bingham
     Meeting;

          (e) at any time prior to the Bank Meeting, by Bingham if the Bank
     Board shall have failed to recommend adoption of this Agreement to the Bank
     shareholders, withdrawn such recommendation or modified or changed such
     recommendation in a manner adverse in any respect to the interests of
     Bingham;

          (f) at any time prior to the Bingham Meeting, by Bank, if the Bingham
     Board shall have failed to recommend to the Bingham shareholders approval
     of the issuance of Bingham Common Stock to be issued pursuant to the
     Merger, withdrawn such recommendation or modified or changed such
     recommendation in a manner adverse in any respect to the interests of Bank;

          (g) by Bank, if, for any 20-consecutive-trading-day period between the
     date of this Agreement and the date the Shareholders of the Bank approve
     the Merger, the price of Bingham's stock does not trade or close at or
     above $8.00 per share; or

          (h) no later than the close of business seven days after the 1999 Work
     Papers are delivered or made available (with such availability being
     confirmed by written notice to Ronald A. Klein) to Bingham and its
     auditors, by Bingham, if Bingham reasonably determines that the 1999 Work
     Papers do not support any information set forth in the 1999 Financial
     Statements; provided, however, such determination cannot be based on
     methodology, if such methodology was used in the preparation of prior
     audited statements of the Bank.

                                       50
<PAGE>   51

     Section 8.02 Effect of Termination. If terminated in accordance with
Section 8.01, this Agreement shall be null and void and have no further force or
effect, except as provided in Section 9.13.

                                   ARTICLE IX

                                 MISCELLANEOUS

     Section 9.01 Expenses. Except as provided in Section 5.08 and this Section
9.01, and the next sentence, regardless of whether the closing actually occurs,
each Party will bear the expenses incurred by it in connection with the
preparation and negotiation of this Agreement and the Attendant Documents and
the consummation of the transactions contemplated in this Agreement and the
Attendant Documents. Notwithstanding the foregoing, Bank and Bingham shall share
equally (a) all printing expenses and filing fees related to the Proxy Statement
and the Registration Statement, (b) all filing fees payable to Regulatory
Authorities in connection with the Merger, and (c) all Hart-Scott-Rodino fees
incurred by the Parties in connection with the Merger, (d) all costs, expenses
and fees of proxy solicitors incurred under Section 5.06, and (e) all other
costs and expenses incurred by any Party in connection with a collaborative
effort among the Parties (other than fees of legal counsel and accountants), the
purpose of which is to effectuate the Merger. Further, while Bingham shall be
responsible for paying the compensation of the Surviving Subsidiary's CEO during
the time from his or her retention to the Effective Date, if for any reason,
this Agreement is terminated and the Merger shall not be consummated, the Bank
shall reimburse Bingham for one-half of all compensation paid to such CEO.

     Section 9.02 Dispute Resolution. Any and all disputes between the Parties
arising out of any provision of this Agreement shall be resolved in accordance
with the procedure set forth in this Section 9.02; provided, however, that a
Party may seek a preliminary injunction or other provisional judicial relief if,
in its judgment, such action is necessary to avoid irreparable damage or to
preserve the status quo. Despite any such action, the Parties will continue to
participate in good faith in the procedures set forth in this Section 9.02. The
Parties shall submit all disputes under this Agreement or any of the Attendant
Documents to arbitration. Such arbitration shall be conducted in accordance with
the rules of the American Arbitration Association by one arbitrator. Bingham
shall appoint one arbitrator and Bank shall appoint one arbitrator, who shall
mutually select a third arbitrator to conduct the arbitration. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C., Sections
1 -- 16, and judgment on the award rendered by the arbitrators may be entered by
any court having jurisdiction thereof. The place of the arbitration shall be the
metropolitan Detroit area. The arbitrators shall make written findings of fact
and conclusions of law, and the decision of the arbitrators shall be final. Each
Party shall pay its own expenses of arbitration and the expense of the
arbitrators shall be equally shared; provided, however, that if in the opinion
of the arbitrators any claim under this Agreement or any defense in objection
thereto was unreasonable, the arbitrators may assess, as part of their award,
all or any part of the arbitration expenses (including reasonable attorney's
fees) of the other Party and of the arbitrators against the Party raising such
unreasonable claim, defense or objection. The Parties agree that discovery shall
be permitted as authorized in the Michigan Court Rules of 1985, as amended.

     Section 9.03 Notices. All notices, requests and other communications under
this Agreement to a Party shall be in writing and shall be deemed given if
personally delivered, telecopied (with confirmation) or mailed by registered or
certified mail (return receipt requested) to the Party at its address set forth
below or such other address as it may specify by notice to the other Parties.

<TABLE>
<S>                                            <C>
     If to Bank, to:                           With a required copy to:
     Franklin Bank, N.A.                       Bodman, Longley & Dahling LLP
     24725 W. 12 Mile Rd.                      34th Floor, 100 Renaissance Center
     Southfield, MI 48034                      Detroit, MI 48243
     Attention: David Simon                    Attention: Laurence B. Deitch
     Fax: 248-354-6393                         Fax: 313-393-7579
</TABLE>

                                       51

<PAGE>   52
<TABLE>
<S>                                            <C>
     If to Bingham, to:                        With required copies to:
     Bingham Financial Services                Jaffe, Raitt, Heuer & Weiss,
     Corporation                               Professional Corporation
     260 E. Brown Street, Suite 200            One Woodward Avenue, Suite 2400
     Birmingham, Michigan 48009                Detroit, MI 48226
     Attn: Ronald A. Klein                     Attn: Peter Sugar
     Fax: 248-644-5760                         Fax: 313-961-8358
</TABLE>

     Section 9.04 Construction. This Agreement shall be construed and enforced
in accordance with the laws of the State of Michigan without regard to its
conflicts of law principles. This Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party. The headings contained in this Agreement are
for reference purposes only and are not part of this Agreement. References in
this Agreement to Sections, Exhibits or Schedules shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".

     Section 9.05 No Assignment; Benefit. No Party may assign its rights and
obligations under this Agreement without the prior written consent of the other
Parties. This Agreement shall be binding on and inure to the benefit of the
Parties and their respective successors and permitted assigns.

     Section 9.06 Entire Agreement. This Agreement, including the Exhibits and
the Schedules attached or to be attached to it, is and shall be deemed to be the
complete and final expression of the agreement between the Parties as to the
matters contained in and related to this Agreement and supersedes any previous
agreements between the Parties pertaining to such matters.

     Section 9.07 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall be
considered one and the same agreement. Photostatic or facsimile reproductions of
this Agreement may be made and relied upon to the same extent as originals.

     Section 9.08 Waiver. Before the Effective Time, any provision of this
Agreement may be (i) waived in writing by the Party benefited by the provision.
The waiver by any Party of any breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent or similar breach.

     Section 9.09 Amendment. This Agreement may only be amended by written
agreement executed by all of the Parties, except that after the Bank Meeting,
the consideration to be received by the Bank shareholders for each share of Bank
Common Stock shall not thereby be decreased.

     Section 9.10 Brokerage or Finder's Fee. Any and all brokerage fees due and
payable to any broker, finder, agent or similar intermediary in connection with
this Agreement or the transactions contemplated hereby, including but not
limited to the fee payable to Raymond James by Bank as described in Section
4.01(z) and the fee payable to Keefe Bruyette by Bingham as described in Section
4.02(z), shall be borne by the Party responsible for retaining, or claimed to be
responsible for retaining, such broker, finder, agent or similar intermediary.

     Section 9.11 Confidentiality. The Parties agree to keep in strict
confidence the fact of and the content of the negotiations and the agreements
concerning the transactions contemplated in this Agreement until such time as
the Parties agree on a joint public announcement or consent, in writing, to the
other Party's proposed public announcement, which consent shall not be
unreasonably withheld, conditioned or delayed. Each of the Parties agrees that
it will not, and will cause its Representatives not to, use any information
obtained pursuant to this Agreement (as well as any other information obtained
before the date of this Agreement in connection with the entering into of this
Agreement) for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Each Party will keep confidential, and will
cause its Representatives to keep confidential, all information and documents
obtained pursuant to this Agreement (as well as any other information obtained
before the date of this Agreement in connection with the entering into of this
Agreement) unless such information (i) was

                                       52
<PAGE>   53

already known to such Party, (ii) becomes available to such Party from other
sources not known by such Party to be bound by a confidentiality obligation,
(iii) is disclosed with the prior written approval of the Party to which such
information pertains, (iv) is or becomes readily ascertainable from published
information or trade sources or (v) is required to be disclosed by law or
regulation, as determined in good faith by the Party making the disclosure,
provided the disclosing Party advises the other Parties in writing prior to
making the disclosure. If this Agreement is terminated or the transactions
contemplated by this Agreement are otherwise not consummated, each Party shall
promptly cause all copies of documents, extracts thereof or notes, analyses,
compilations, studies or other documents containing information and data as to
another Party to be returned to the Party that furnished the same.

     Section 9.12 No Third Party Beneficiaries. Except for Sections 5.12, 5.14,
5.15, 5.16, and 9.14, the rights and obligations of the Parties under this
Agreement are for the benefit of the Parties only, and neither any creditor of
any of the Parties nor any other person or entity (other than a successor in
interest to any of the Parties), shall have the right to rely on or enforce the
provisions of this Agreement as a third-party beneficiary or otherwise.

     Section 9.13 Survival. No representations, warranties, agreements and
covenants contained in this Agreement shall survive beyond the Effective Time
(other than the agreements and covenants contained in Sections 3.03, 3.04(b),
3.04(c), 3.04(d), 3.04(e), 3.06(b), 5.05, 5.14, 5.15 and 5.16 and this Article
IX) or the termination of this Agreement if this Agreement is terminated prior
to the Effective Time (other than Sections 5.08(b) and (c), and this Article
IX).

     Section 9.14 Indemnification.

          (a) For a period of six years from and after the Effective Time, the
     Surviving Subsidiary will take no action which would diminish the right of
     any officer or director of the Bank or any of its Subsidiaries who shall
     have served in such capacity prior to the Effective Time from being
     indemnified in accordance with the provisions of the Bank's or the Bank's
     Subsidiaries Governing Documents in effect prior to the Effective Time from
     and against any losses, claims, damages, costs, expenses (including
     reasonable attorney fees), liabilities or judgments arising, in whole or in
     part, out of the fact that such person was a director or officer of the
     Bank or a Subsidiary of the Bank prior to the Effective Time, and
     pertaining to any matter or fact arising, existing or occurring before the
     Effective Time.

          (b) For a period of six years from and after the Effective Date, the
     Surviving Subsidiary, to the extent commercially available and reasonable,
     shall maintain directors and officers liability insurance comparable to
     that which is maintained by the Bank immediately prior to the Effective
     Date covering the liability described in Section 9.14(a) above. Directors
     and officers liability insurance shall be deemed to be available on a
     commercially reasonable basis at any time, if, at such time, such insurance
     is obtainable at rates comparable to the rates then being paid for
     directors and officers liability insurance then covering either the
     directors of the Holding Company or the Surviving Subsidiary.

          (c) Bingham agrees that after the Merger those persons designated by
     the Bank to serve on the Holding Company Board or the Surviving Subsidiary
     Board will be afforded the same protection against claims and liability
     arising from such service, through indemnification agreements, insurance or
     otherwise, as is afforded to those persons designated by Bingham to serve
     on the Holding Company Board or the Surviving Subsidiary Board,
     respectively.

          (d) The obligations of the Surviving Subsidiary under this Section
     9.14 are intended to be enforceable against the Surviving Subsidiary and
     shall be binding on all respective successors and permitted assigns of the
     Surviving Subsidiary.

                                       53
<PAGE>   54

     The Parties have executed this Agreement and Plan of Merger as of the day
and year first written above.

                                          Bingham Financial Services Corporation

                                          By: /s/ RONALD A. KLEIN
                                            ------------------------------------

                                          Its: Chief Executive Officer
                                            ------------------------------------

                                          Franklin Bank, N.A.

                                          By: /s/ DAVID F. SIMON
                                            ------------------------------------

                                          Its: Chairman
                                            ------------------------------------

                                       54