**SEVERANCE,
      SEPARATION AND RELEASE AGREEMENT**





This
      Severance, Separation and Release Agreement (“Agreement”) is entered into as of
      this 4 th day of
      November, 2005, between Matrix Bancorp, Inc. (the ‘Company”), and David Frank
      (the “Director”).





**RECITALS**





**WHEREAS** ,
      as of
      the date hereof, the Company has commenced a private placement offering of
      its
      common stock (the “Offering”), the proceeds of which are to be used to fund an
      issuer tender offer, in which certain members of the Company’s current senior
      management have agreed to tender all of their shares of common stock and resign
      from both their management positions and their positions as members of the
      board
      of directors of the Company and its subsidiaries upon completion of the
      Offering;





**WHEREAS,** the
      Company’s Board of Directors and Director have agreed and desire to memorialize
      that, in consideration for Director agreeing to resign from the Board of
      Directors of the Company as of the closing of the Offering, Director shall
      receive a payment from the Company shortly after the closing of the
      Offering;





**NOW,
      THEREFORE** ,
      in
      consideration of the mutual promises and the terms and conditions set forth
      below and other obligations under this Agreement, the Company and the Director
      (collectively referred to as the “‘Parties”) hereby agree as
      follows:





**AGREEMENT**





1.  Effectiveness
      of Agreement .
      This
      Agreement is effective as of the date first set forth above; provided, however,
      to the extent the Offering is not consummated, this Agreement shall be null
      and
      void and of no further effect.





2.  Payment
      to Director .
      In
      consideration for Director’s resignation from the Board of Directors of the
      Company as of the closing of the Offering (the “Resignation Date”), the Company
      agrees to provide Director with a payment of seventy five thousand dollars
      ($75,000) one month after the closing of the Offering by wire transfer based
      upon instructions given by Director to the Company.





3.  Benefits .
      (a) For
      a period of eighteen (18) months from the Resignation Date, the Director shall
      have the right to continue coverage under the Company’s medical and dental
      insurance programs as provided by the Consolidated Omnibus Budget Reconciliation
      Act of 1985, as amended (“COBRA”), and the Company shall reimburse such amount
      of the expense as it pays generally for its employees.





(b)  Except
      as
      set forth in this Section 3 and as required by applicable law, the Director
      shall not be entitled to participate in any benefit plans or programs provided
      by the Company or its subsidiaries following the Resignation Date.





4.  No
      Other Payments Due .
      Except
      as provided in Section 2 and Section 3 hereof, the Director shall not be
      entitled to any payments or other benefits following the Resignation Date.
      The
      Director further acknowledges that, subject to the above-referenced exceptions,
      there is no other compensation arising out of or as a result of his service
      as a
      director of the Company.








5.  Release
      and Indemnification .
      (a) In
      consideration of the above, the sufficiency of which the Director hereby
      acknowledges, the Director, as of the Resignation Date, on behalf of the
      Director and the Director’s heirs, executors and assigns, agrees to release and
      forever discharge the Company and each of the Company’s shareholders, parents,
      affiliates, subsidiaries, divisions, any and all current and former directors,
      officers, employees, agents, and contractors and their heirs and assigns, and
      any and all employee pension benefit or welfare benefit plans of the Company,
      including current and former trustees and administrators of such employee
      pension benefit and welfare benefit plans (the “Released Parties”), from all
      claims, charges, or demands, in law or in equity, whether known or unknown,
      which may have existed or which may now exist from the beginning of time to
      the
      date of this Agreement, including, without limitation, any claims the Director
      may have arising from or relating to the Director’s service as a director of the
      Company. The release provided for herein includes a release by the Director
      of
      any claims in any way related to the Director’s service as a director with, or
      resignation from, the Company. **The
      Director understands that this is a general waiver and release of all claims,
      known or unknown, that the Director**  **may
      have against the Released Parties based on any act, omission, matter, cause
      or
      thing that occurred through the date the Director**  **signs
      this Agreement.** This
      release does not release the Company from any obligations due to the Director
      under this Agreement, or from any rights, claims or coverages to which Director
      may be entitled in respect of or under any former, current or future insurance
      policies of the Company and its affiliates.





(b)  In
      consideration of the above, the sufficiency of which the Company hereby
      acknowledges, as of the Resignation Date, the Company and its successors and
      assigns agrees to release and forever discharge the Director and the Director’s
      heirs, executors and assigns, from all claims, charges, or demands, in law
      or in
      equity, whether known or unknown, which may have existed or which may now exist
      from the beginning of their period of service as a director of the Company
      to
      the Resignation Date, except for breaches regarding disclosure of confidential
      information or for conduct involving theft, fraud or embezzlement.





(c)  It
      is a
      condition hereof, and it is the Parties’ intention in the execution of the
      general release in this Section 5, that the same shall be effective as a bar
      to
      each and every claim hereinabove specified.





(d)  From
      and
      after the Resignation Date, the Company shall indemnify and hold harmless the
      Director against any costs or expenses (including reasonable attorney’s fees),
      judgments, fines, losses, claims, damages or liabilities incurred in connection
      with any claim, action, suit, proceeding or investigation, arising out of
      matters existing or occurring at or prior to the Resignation Date, whether
      asserted or claimed prior to, at or after the Resignation Date, arising in
      whole
      or in part out of or pertaining to the fact that he was a director of the
      Company to the fullest extent which such Director would be entitled under the
      Amended and Restated Articles of Incorporation **** and
      Bylaws of the Company and Colorado law as in effect on the date
      hereof.





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6.  No
      Admission .
      This
      Agreement is not an admission by either the Company or the Director of any
      wrongdoing or liability.





7.  No
      Authority to Bind the Company .
      As of
      the Resignation Date, neither the Director, nor any partner, agent or employee
      of the Director, has authority to enter into any contracts that bind the Company
      or creates obligations on the part of the Company.





8.  Non-Disparagement .
      As of
      the Resignation Date, the Director agrees not to make any oral or written
      statements or otherwise engage in any act that is intended or may reasonably
      be
      expected to harm the reputation, business, prospects or operations of the
      Company or any of its respective directors or executive officers or any persons
      related to the foregoing. As of the Resignation Date, the Company further agrees
      not to, and to use its reasonable best efforts to ensure that its directors
      and
      executive officers will not, make any oral or written statements to employees
      or
      members of the Board of Directors of the Company or other outside individuals
      or
      otherwise engage in any act which is intended or may reasonably be expected
      to
      harm the reputation, business or prospects of the Director.





9.  Confidentiality .
      (a) The
      Director recognizes and acknowledges that the Company’ and its affiliates’ trade
      secrets and confidential or proprietary information, are valuable, special
      and
      unique assets of their respective businesses. For purposes of this Agreement, a trade secret or confidential
      or
      proprietary information shall mean and include information treated as
      confidential or as a trade secret by the Company or its affiliates, including
      but not limited to information regarding contemplated products, business and
      financial methods or practices, marketing techniques, customers, vendors,
      suppliers, trade secrets, training programs, manuals or materials, technical
      information, contracts, systems, procedures, mailing lists, know-how, trade
      names, improvements, pricing, price lists, or other data, business plans,
      litigation, regulatory investigations, strategy, code books, invoices and other
      financial statements, computer programs, software systems, databases, discs
      and
      printouts, other plans (technical or otherwise), customer and industry lists,
      supplier lists, correspondence, internal reports, personnel files, Director
      compensation, sales and advertising material which is or was used in the
      business of the Company or its affiliates.





(b)  As
      of the
      Resignation Date, the Director will not, in whole or in part, disclose such
      trade secrets or confidential or proprietary information to any person, firm,
      corporation, association or other entity for any reason or purpose whatsoever,
      or make use of any such property for his own purposes or for the benefit of
      any
      person, firm, corporation or other entity (except the Company) under any
      circumstances unless compelled to do so by applicable law. The Director’s
      obligation under this Section shall not apply to any information that is
      generally available to the public, hereafter becomes available to the public
      without the fault of the Director or is considered to be generic industry
      practice. The Director agrees and acknowledges that all of such information,
      in
      any form, and copies and extracts thereof, are and shall remain the sole and
      exclusive property of the Company and the Director shall return to the Company
      the originals and all copies of any such information provided to or acquired
      by
      the Director in connection with the performance of his duties for the Company,
      and shall return to the Company all files, correspondence and/or other
      communications received, maintained and/or originated by the Director during
      the
      course of his relationship with the Company, and no copy of any such information
      shall be retained by him.





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(c)  It
      is the
      desire and intent of the Parties that the provisions of this Section shall
      be
      enforced to the fullest extent permissible under the laws and public policies
      applied in each jurisdiction in which enforcement is sought. Accordingly, if
      any
      particular portion of this Section shall be adjudicated to be invalid or
      unenforceable, this Section shall be deemed amended to delete therefrom the
      portion thus adjudicated to be invalid or unenforceable, such deletion to apply
      only with respect to the operation of this Section in the particular
      jurisdiction in which such adjudication is made.





(d)  If
      there
      is a breach or threatened breach of the provisions of this Section, the Company
      or its affiliates shall be entitled to an injunction restraining the Director
      from such breach. Nothing herein shall be construed as prohibiting the Company
      from pursuing any other remedies for such breach.





10.  Return
      of Property .
      Not
      later than the Resignation Date, the Director shall return all the Company’
property in the Director’s possession, including, but not limited to, the
      Company’ keys, credit cards, computer software and peripherals and originals or
      copies of books, records, or other information pertaining to the Company’s
      businesses, including any Employer information regarding the Company on
      Director’s personal computers.





11.  Cooperation
      in Legal and Other Matters .
      After
      the Resignation Date, the Director shall, at the request of the Company, assist
      and cooperate with the Company in the defense and/or investigation of any third
      party claim or any investigation or proceeding, whether actual or threatened,
      including, without limitation, participating as a witness in any litigation,
      arbitration, hearing or other proceeding between the Company and a third party
      or any government body. The Company shall reimburse the Director for all
      reasonable expenses incurred by him in connection with such assistance
      including, without limitation, travel expenses.





12.  Governing
      Law .
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Colorado, without reference to the principles of conflict of
      laws.





13.  Taxes .
      All
      payments to be made hereunder shall be net of all applicable income and
      employment taxes required to be withheld therefrom.





14.  Complete
      Agreement; Amendments .
      This
      Agreement represents the complete agreement between the Director and the Company
      concerning the subject matter in this Agreement and supersedes all prior
      agreements or understandings, written or oral, including without limitation
      the
      terms of any and all prior employment agreements. In executing this Agreement,
      none of the Parties has relied or is relying on any representation with respect
      to the subject matter of this Agreement or any representation inducing the
      execution of this Agreement except those representations as are expressly set
      forth in this Agreement, and the Parties acknowledge that each has relied on
      their own judgment in entering into this Agreement. This Agreement may not
      be
      amended or modified otherwise than by a written agreement executed by the
      parties hereto or their respective successors and legal
      representatives.





15.  Severability .
      Each of
      the sections contained in this Agreement shall be enforceable independently
      of
      every other section in this Agreement, and the invalidity or nonenforceability
      of any section shall not invalidate or render unenforceable any other section
      contained in this Agreement.





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16.  Counterparts .
      This
      Agreement may be executed in counterparts, and each counterpart shall have
      the
      same force and effect as an original and shall constitute an effective, binding
      agreement on the part of each of the undersigned.





17.  Arbitration .
      Before
      beginning the binding arbitration mechanism set forth in this Section 17, the
      Parties shall first participate in mediation of any dispute arising under this
      Agreement. The mediator shall be chosen by the Parties, or, if the parties
      cannot agree, by the American Arbitration Association. At least ten (10) days
      before the mediation, each side shall provide the mediator with a statement
      of
      its position and copies of all supporting documents. Each party shall send
      to
      the mediation, a person who has authority to bind the party. Once the Parties
      have participated in the mediation, and in the event the dispute between the
      Parties has not been settled, either Party may invoke the binding arbitration
      provisions in this Section 17.





Each
      of
      the Parties to this Agreement hereby voluntarily and knowingly waives any and
      all rights to civil trial by jury as to any dispute or claim arising out of
      or
      relating to this Agreement, except when temporary or preliminary injunctive
      relief is necessary as a result of a breach or threatened breach of Section
      9
      above or other situation where injunctive relief is necessary in order to
      prevent irreparable harm, either party may seek injunctive relief from a court
      of competent jurisdiction in the county of Denver, in the State of Colorado
      and
      the parties consent to personal jurisdiction in such court. Each of the Parties
      further agrees that any such dispute or claim will be exclusively and finally
      settled by binding arbitration in accordance with the rules of the American
      Arbitration Association by one arbitrator appointed in accordance with said
      rules. The exclusive venue for any such arbitration shall be the county of
      Denver, in the State of Colorado. The arbitrator shall apply Colorado law,
      without reference to rules of conflicts of law or rules of statutory
      arbitration, to the resolution of any dispute. Judgment on any award rendered
      by
      the arbitrator may be entered in any court having jurisdiction
      thereof.





The
      decision of the arbitrator shall be binding upon the Parties. The Company shall
      bear the fees of the arbitrator and the fee of the American Arbitration
      Association. Other costs and attorneys’ fees will be borne by the party that
      incurs them. The arbitrator shall award the prevailing party reasonable attorney
      fees and costs in such proportion as the arbitrator decides. Notwithstanding
      anything to the contrary, either party may no more than 90 nor less than 30
      days
      before the arbitration, serve a discovery request seeking any document that
      would be discoverable in civil litigation. Responses to such requests shall
      be
      due 20 days after service. Thereafter, each party shall be allowed to take
      three
      (3) depositions of no more than four (4) hours each. The arbitrator may resolve
      any discovery disputes as they would be resolved in civil
      litigation.





18.  Notices .
      All
      notices, requests, claims, demands or other communications hereunder shall
      be in
      writing and shall be deemed given when delivered personally, upon receipt of
      a
      transmission confirmation if sent by telecopy or like transmission and on the
      next business day when sent by a reputable overnight carrier service to the
      Parties at the following addresses (or at such other address for a party as
      shall be specified by like notice):


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If
      to the
      Company:





Matrix
      Bancorp, Inc.


700
      17 th Street,
      Suite 2100


Denver,
      Colorado 80202


Attention:
      Corporate Secretary





Fax:
      (303) 390-0952





With
      a
      copy to:





Patton
      Boggs LLP


2550
      M
      Street, NW


Washington,
      DC 20037


Attention:  Norman
      B.
      Antin, Esq.


Jeffrey
      D. Haas, Esq.


Fax:
      (202) 457-6315





If
      to the
      Director:





David
      Frank


107
      Sunesta Cove


Palm
      Beach Gardens, Florida 33418





19.  Press
      Releases .
      The
      Parties shall consult with each other before issuing any press release with
      respect to the subject matter of this Agreement and shall not issue any such
      press release or make any such public statements without the prior consent
      of
      the other Parties, which shall not be unreasonably withheld; provided, however,
      that the Company may, without the prior consent of the Director (but after
      consultation, to the extent practicable under the circumstances), issue such
      press release or make such public statements as may be required by law or the
      rules and regulations of the Nasdaq Stock Market.





20.  Voluntary
      Execution of Agreement .
      This
      Agreement is executed voluntarily and without any duress or undue influence
      on
      the part or on behalf of the parties hereto, with the full intent of releasing
      all claims. Each party acknowledges that (i) they have been advised by the
      other
      to consult an attorney regarding any potential claims as well as the terms
      and
      conditions of this Agreement before executing it, (ii) they have read the
      Agreement and they fully understand the terms of this Agreement including,
      without limitation, the significance and consequences of the general release
      in
      Section 5 hereof, (iii) they are executing this Agreement in exchange for
      consideration in addition to anything of value to which they are entitled,
      and
      (iv) they are fully satisfied with the terms of this Agreement and are executing
      this Agreement voluntarily, knowingly and willingly and without
      duress.








**[Signature
      Page Follows]**





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The
      parties to this Agreement have executed this Agreement as of the day and first
      written above.




**MATRIX
                BANCORP, INC.**
              
              By:/s/
                T. ALLEN
                MCCONNELL
              Name:
                T. Allen McConnell
              Title:
                Senior Vice President
              
              **DAVID
                FRANK**
              
              /s/
                DAVID
                FRANK




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