SEVERANCE, SEPARATION AND RELEASE AGREEMENT

This Severance, Separation and Release Agreement (“Agreement”) is entered into
as of this 4th day of November, 2005, between Matrix Bancorp, Inc. (the
‘Company”), Matrix Capital Bank, Matrix Bancorp Trading, Inc., First Matrix
Investment Services Corp., Matrix Financial Services Corporation, MTXC Realty
Corp., The Vintage Group, Inc., Sterling Trust Company and Matrix Funding Corp.
(collectively, the “Employers”) and Richard V. Schmitz (the “Employee”).

RECITALS

WHEREAS, the Employee has elected to terminate his employment relationship with
the Employers in consideration of the severance payment set forth herein, the
Employers accept Employee’s decision and, as a result, the Employers and the
Employee have mutually agreed to terminate their existing employment
relationships and to release each other as set forth herein from claims arising
from or related to such employment relationships.

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

AGREEMENT

1. Termination of Employment Relationships. Subject to Section 16 hereof, the
employment relationships between the Employee and the Employers shall terminate
on the date the closing of the Company’s private placement offering of common
stock (the “Offering”) which has commenced as of the date first set forth above
(the “Termination Date”); provided, however, to the extent the private placement
offering is not consummated, this Agreement shall be null and void and of no
further effect. Effective as of the Termination Date, the Employee hereby
resigns all officer and employee positions (including all responsibilities
attendant thereto) with each of the Employers, his membership on all Boards of
Directors and Committees of each of the Employers and his positions as trustee
or administrator with respect to any statutory business trusts formed by the
Company.

2. Severance Payment. Subject to Section 16 hereof, at the close of business on
the Termination Date, the Employee shall receive from the Company (i) a
severance payment amounting to one million dollars ($1,000,000.00), less any
applicable income and employment taxes required to be withheld therefrom
pursuant to Section 13 hereof (the “Severance Payment”), (ii) all salary and
wages owed to Employee, less any applicable income and employment taxes required
to be withheld therefrom pursuant to Section 13 hereof and (iii) reimbursement
for all reasonable and documented business expenses submitted to the Employers,
including but not limited to business expenses on Employee’s American Express
corporate card.

3. Benefits. (a) For a period of twelve (12) months from the Termination Date,
which Termination Date shall be the “qualifying event” date under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Employee shall have the right to continue coverage under the Company’s
medical and dental insurance programs as provided by COBRA, which coverage shall
be provided at the Company’s expense.

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(b) Except as set forth in this Section 3 and as required by applicable law, the
Employee shall not be entitled to participate in any benefit plans or programs
provided to employees of the Employers following the Termination Date.

4. No Other Payments Due. Except as provided in Section 2 and Section 3 hereof,
the Employee shall not be entitled to any payments or other benefits following
the Termination Date. The Employee further acknowledges that, subject to the
above-referenced exceptions, he has received payment in full for all outstanding
wages, accrued but unused vacation and all other compensation arising out of or
as a result of his employment by the Employers.

5. Release and Indemnification. (a) In consideration of the above, the
sufficiency of which the Employee hereby acknowledges, the Employee, on behalf
of the Employee and the Employee’s heirs, executors and assigns, hereby releases
and forever discharges the Employers and each of the Employers’ 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 Employers, 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 Employee may have arising from or relating to the Employee’s employment
relationships or termination from such relationships with the Employers,
including a release of any rights or claims the Employee may have under Title
VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act of
1991 (which prohibit discrimination in employment based upon race, color, sex,
religion and national origin); the Age Discrimination in Employment Act; the
Americans with Disabilities Act of 1990, as amended, and the Rehabilitation Act
of 1973 (which prohibit discrimination based upon disability); the Family and
Medical Leave Act of 1993 (which prohibits discrimination based on requesting or
taking a family or medical leave); Section 1981 of the Civil Rights Act of 1866
(which prohibits discrimination based upon race); Section 1985(3) of the Civil
Rights Act of 1871 (which prohibits conspiracies to discriminate); the National
Labor Relations Act; the Colorado Labor Peace Act; the Employee Retirement
Income Security Act of 1974, as amended (other than any accrued benefit(s) to
which the Employee has a non-forfeitable right under any pension benefit
plan)(which prohibits discrimination with regard to benefits); the Worker
Adjustment and Retraining Notification Act; the Colorado Anti-Discrimination
Act; the Fair Labor Standards Act; the Colorado Wage Claim Act; and any other
federal, state or local laws against discrimination; or any other U.S. federal,
state, or local statute, or common law relating to employment, wages, hours, or
any other terms and conditions of employment. The release provided for herein
includes a release by the Employee of any claims for wrongful discharge, breach
of contract, torts or any other claims in any way related to the Employee’s
employment relationships with or resignation or termination from each of the
Employers. The Employee understands that this is a general waiver and release of
all claims, known or unknown, that the Employee may have against the Released
Parties based on any act, omission, matter, cause or thing that occurred through
the date the Employee signs this Agreement. This release does not release the
Employers from any obligations due to the Employee under this Agreement, or from
any rights, claims or coverages to which Employee may be entitled in respect of
or under any former, current or future insurance policies of the Employers and
their affiliates; provided, however, that Employee specifically agrees to waive
all rights, claims and coverages to which Employee may be entitled under the
Bank Owned Life Insurance and/or Company Owned Life Insurance policies.

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(b)  In consideration of the above, the sufficiency of which the Employers
hereby acknowledge, the Employers and their successors and assigns hereby
release and forever discharge the Employee and the Employee’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 employment with the Employers to the Termination
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 Termination Date, the Employers shall indemnify and hold
harmless the Employee 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
Termination Date, whether asserted or claimed prior to, at or after the
Termination Date, arising in whole or in part out of or pertaining to the fact
that he was a director, officer, manager, trustee, administrator or employee of
the Employers or any affiliate thereof, to the fullest extent which such
Employee would be entitled under the Amended and Restated Articles of
Incorporation and Bylaws (or similar charter or other organizational documents)
of the Employers or any such affiliate thereof, and the corporate laws of the
respective jurisdictions of the Employers and such affiliates thereof as in
effect on the date hereof.

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

7. No Authority to Bind the Employers. As of the Termination Date, neither the
Employee, nor any partner, agent or employee of the Employee, has authority to
enter into any contracts that bind one or more of the Employers or create
obligations on the part of any of the Employers.

8. Non-Disparagement. The Employee 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
Employers or any of their respective directors or executive officers or any
persons related to the foregoing. The Employers further agree not to, and to use
their reasonable best efforts to ensure that their directors and executive
officers will not, make any oral or written statements to employees 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 Employee.

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9. Confidentiality; No Solicitation. (a) The Employee recognizes and
acknowledges that the Employers’ and their 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 Employers or their
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, employee compensation, sales and advertising material which is or was
used in the business of the Employers or their affiliates.

(b)  The Employee 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 Employers) under any circumstances
unless compelled to do so by applicable law. The Employee’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
Employee or is considered to be generic industry practice. The Employee 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
Employers and the Employee shall return to the Employers the originals and all
copies of any such information provided to or acquired by the Employee in
connection with the performance of his duties for the Employers, and shall
return to the Employers all files, correspondence and/or other communications
received, maintained and/or originated by the Employee during the course of his
relationship with the Employers, and no copy of any such information shall be
retained by him.

(c)  The Employee acknowledges that the agreements and covenants contained in
this Section are essential to protect the value of the Employers’ respective
businesses and assets and by virtue of his relationship with the Employers, the
Employee has obtained knowledge, contacts, know-how, training, experience and
other information relating to the Employers’ business operations, and there is a
substantial probability that such knowledge, know-how, negative know-how,
contacts, training, experience and information could be used to the substantial
advantage of a competitor of the Employers and to the Employers’ substantial
detriment. Accordingly, the Employee agrees that for a period of twelve (12)
months from the Termination Date, the Employee will not directly or indirectly,
by or for himself, or as the agent of another:

(i) In any way solicit, induce or hire or attempt to solicit, induce or hire any
employee, officer, representative, consultant, or other agent of the Employers
or any of their affiliates (whether such person is presently employed by the
Employers or any such affiliate or may hereinafter be so employed), to leave the
employ of the Employers or any such affiliate or otherwise interfere with the
employment or business relationship between any such person and the Employers;

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(ii) In any way solicit, induce or hire or attempt to solicit, induce or hire
any former employee, officer, representative, consultant or other agent of the
Employers or any of their affiliates, except for any employee, officer,
representative, consultant or agent who is terminated by the Employers or any of
their affiliates for other than cause; or otherwise interfere with the
employment or business relationship between any such person and the Employers;

(iii) In any way solicit or attempt to divert any clients or customers of the
Employers or any of their affiliates as of or prior to the Termination Date for
the purpose of obtaining an economic benefit; or

(iv) In any way engage in the states of Colorado, Arizona, Texas, Tennessee or
California in any business, directly or through any enterprise or other entity,
that conducts the same business conducted by the Employers or any affiliate
thereof. You warrant that these provisions will not unreasonably interfere in
your ability to earn a living or to pursue your occupation after the Termination
Date.

(d) 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.

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

(f) The Parties agree that Employee shall not be in violation of Section 9(c)
hereof merely by maintaining his status as a member of the Board of Directors of
Citywide Banks of Colorado, Inc. or any of its subsidiary banking or other
institutions.

10. Return of Property. Except with respect to the office furniture and personal
computer of the Employee, the Employee shall promptly return all the Employers’
property in the Employee’s possession, including, but not limited to, the
Employers’ keys, credit cards, computer software and peripherals and originals
or copies of books, records, or other information pertaining to the Employers’
businesses, including any Employer information regarding Employers on Employee’s
personal computers.

11. Cooperation in Legal and Other Matters. The Employee shall, at the request
of the Employers, reasonably assist and cooperate with the Employers 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 Employers and a third party or any government body. The
Employers shall reimburse the Employee for all reasonable expenses incurred by
him in connection with such assistance including, without limitation, travel
expenses.

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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 Employee and the Employers 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.

16. Age Discrimination. Pursuant to the Older Workers Benefit Protection Act,
the Parties acknowledge and agree that (i) the Employee has twenty-one (21) days
from his receipt of this Agreement in which to consider the terms of this
Agreement (including, without limitation, each party’s release and waiver of any
and all claims under the Age Discrimination in Employment Act) before executing
it, (ii) changes to the terms of this Agreement, whether material or immaterial,
will not restart this twenty-one (21) day period, (iii) Employee will have seven
(7) days after his execution of this Agreement in which to revoke this
Agreement, in which event a written notice of revocation must be received by the
Company on or before the seventh day, and (iv) this Agreement will not become
effective and enforceable until the seven (7) day revocation period has expired
without revocation of the Agreement by the Employee. If you choose to sign the
Agreement before the end of the twenty-one (21) day period referenced in the
prior sentence, you certify that you did so voluntarily for your own benefit and
not because of coercion.

17. 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.

18. Arbitration. Before beginning the binding arbitration mechanism set forth in
this Section 18, 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 18.

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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 Employers
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.

19. 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):

If to the Employers:

Matrix Bancorp, Inc.
700 17th Street, Suite 2100
Denver, Colorado 80202
Attention: Corporate Secretary

Fax: (303) 390-0952

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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 Employee:

Richard V. Schmitz
2 University
Greenwood Village, CO 80121

20. 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
Employee (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.

21. 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/ D. MARK SPENCER                                
Name: D. Mark Spencer
Title: President

MATRIX CAPITAL BANK

By: /s/ D. MARK SPENCER                                 
Name: D. Mark Spencer
Title: President

MATRIX BANCORP TRADING, INC.

By: /s/ T. ALLEN MCCONELL                            
Name: T. Allen McConnell
Title: Secretary

FIRST MATRIX INVESTMENT SERVICES CORP.

By: /s/ T. ALLEN MCCONELL                            
Name: T. Allen McConnell
Title: Secretary

MATRIX FINANCIAL SERVICES CORPORATION

By: /s/ PATRICK HOWARD                               
Name: Patrick Howard
Title: President

MATRIX FUNDING CORP.

By: /s/ DAVID W. KLOOS                                   
Name: David W. Kloos
Title: Vice President

MTXC REALTY CORP.

By: /s/ DAVID W. KLOOS                                  
Name: David W. Kloos
Title: Vice President

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STERLING TRUST COMPANY

By: /s/ PAUL SKRETNY                                      
Name: Paul Skretny
Title: President

THE VINTAGE GROUP, INC.

By: /s/ DAVID W. KLOOS                                    
Name: David W. Kloos
Title: Vice President

RICHARD V. SCHMITZ

/s/ RICHARD V. SCHMITZ                                  

 
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