**CONFIDENTIAL      SEPARATION AGREEMENT**

**AND      GENERAL RELEASE**

**CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE**
**BAY NATIONAL BANK, **
**RICHARD C. SPRINGER**
**.  **

**WHEREAS,**

**WHEREAS,**

**WHEREAS,**

**NOW,      THEREFORE, **

| 1.   | Springer’s                employment with the Company will terminate as of the close of business                on                July 20, 2007 (the “Termination Date”).  Each of the Parties                acknowledges and agrees that Springer (a) will be paid his Base Salary                as                defined in section 4.1(a) of the EA through the Termination Date,                (b) as                provided for in section 4.3 of the EA will be reimbursed for all                expenses                incurred by him in connection with his employment with the                Company; |
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| 2.   | (a)           Springer                and the Company acknowledge that on or about July 9, 2007, the Company                will cause Bay National Corporation transfer to Springer  3300                shares of stock in Bay National Corporation described in section                4.3(b)(iii) of the June 1, 2006 Employment                Agreement. |
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| 3 | In                exchange for the consideration and covenants herein stated, the Company                releases Springer from any and all obligations, including but not                limited                to all non-competition, non-solicitation of customers and non-solicitation                of employees provisions outlined in the June 1, 2006 Employment Agreement                and he may begin employment at any time after the signing of this                Agreement.   The Company further releases and discharges                Springer from any and all causes of action, known and unknown, of                any kind                or nature, including any rights or claims arising out of Springer’s                employment, up to the date of this Agreement and                Release. |
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| 4. | In                exchange for the consideration and covenants herein                stated,  Springer agrees and executes this GENERAL RELEASE for                himself and on behalf of his heirs, executors, administrators, attorneys,                and assigns, and hereby releases and discharges the Company, its                corporate                parent, affiliates and subsidiaries, officers, directors, stockholders,                and employees, from any and all causes of action, known or unknown,                claims                or liabilities of any kind which have been or could be asserted against                the Company, including but not limited to such causes of action arising                out of or in any way relating to Springer's employment (or his departure                there from), claims for alleged breach of contract, wrongful discharge,                or                any rights or claims arising out of Title VII of the Civil Rights Act                of 1964, as amended, the Americans with Disabilities Act, or any                other                federal, state or municipal statute or ordinance relating to employment                and discrimination in employment.  Springer expressly waives his                right to recover in his own right upon filing, any lawsuits, claims,                grievances, complaints or charges with any Court, or any State and                federal                and local agency, concerning or relating to any dispute arising out                of his                employment relationship with the Company, alleged breaches of employment,                covenants or contracts, abusive or wrongful and constructive discharge,                unlawful employment discrimination, breaches of the Age Discrimination                in                Employment Act, or otherwise relating to Springer’s employment or                separation from that employment with the Company; however, Springer                does                not waive any rights or claims to enforce this                Agreement. |
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| 5. | Springer                (a) represents, warrants and covenants to the Company that he has                not and                will not at any time in the future, in any way, disparage, discredit,                defame or belittle the Company, and (b) acknowledges and agrees that                he                has no present or future right to employment with the                Company. |
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| 6. | Company                (a) represents, warrants and covenants to Springer that it has not                and                will not at any time in the future, in any way, disparage, discredit,                defame or belittle Springer. |
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| 7. | (a) | Springer                agrees that he will not, for himself or any other person or entity,                directly or indirectly, divulge, communicate or in any way make use                of,                any of the Company’s confidential, sensitive or proprietary information                acquired in the performance of his services therefor (“Confidential                Information”) without the prior written consent of a duly authorized                representative of the Company.  Confidential Information means                data and information relating to the business of the Company and                any                parent and/or affiliate of the Company which has been disclosed to                Springer or of which Springer became aware as a consequence of or                through                his relationship with the Company and which has value to the Company                and                is not generally known to its                competitors. |
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| (c) | Springer                represents that he has no information that would support or establish                a                claim against himself and/or the Company for any violation of any                federal,                state or local regulations, criminal or civil                laws. |
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| (d) | On                or before the Termination Date, Springer will return all property                of the                Company including, but not limited to, all Confidential Information,                without retaining any paper or electronic copies of such                records |
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| (e) | Springer                acknowledges that the Confidential Information constitutes a valuable                asset of the Company, embodying substantial business and creative                efforts,                and that any disclosure by him of Confidential Information will result                in                irreparable injury to the Company.  In the event of such                disclosure or threatened disclosure, Springer consents to the grant                by any                court of equitable relief, including specific performance, a restraining                order and/or an injunction, in favor of the Company, without prejudice                to                any and all other rights or remedies to which the Company may be                entitled.  Springer also agrees that he will not disclose the                existence or terms of this Agreement to any third parties with the                exception of  accountants, attorneys and spouse, or as may be                required to comply with legal process. Springer acknowledges and                agrees                that this requirement of confidentiality is a material inducement                to the                Company to enter into this                Agreement. |
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| 8. | Nothing                in this Agreement is intended to or shall be construed as an admission                by                the Company that it violated any law, interfered with any right,                breached                any obligation or otherwise engaged in any improper or illegal conduct                with respect to Springer or otherwise, the Company expressly denying                any                such illegal or wrongful conduct. |
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| 9. | This                Agreement embodies the entire agreement and understanding of the                Parties                with regard to the matters described herein and supersedes any and                all                prior or contemporaneous agreements and understandings, oral or written,                between the Parties. |
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| 10. | If                any part, term or provision of this Agreement is declared by any                court or                agency of competent jurisdiction in a judgment or order to be illegal,                void, unenforceable or invalid, such provision shall have no effect                upon                and shall not impair the legality, enforceability or validity of,                any                other provision of this Agreement; provided, however, that                upon any finding by such court of competent jurisdiction that a release                or                waiver of claims or rights is illegal, void, unenforceable or invalid,                Springer agrees to execute a release, waiver and/or covenant that                is                legal, valid and enforceable. |
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| 11. | This                Agreement shall be construed and interpreted in accordance with the                law of                the State of Maryland, without regard to the conflicts of law principles                thereof.  Each of the Parties hereby consents to exclusive                personal jurisdiction and venue in the Circuit Court of Baltimore                County,                State of Maryland. |
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| 12. | Springer                further states that he has carefully read the foregoing, has had                sufficient opportunity to review and deliberate the foregoing with                counsel                of his own choosing, knows and understands its contents, and signs                the                same as his free and independent act.  Pursuant to the Older                Worker Benefit Protection Act, amending the Age Discrimination in                Employment Act, Springer specifically represents and                acknowledges: |
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| (a)   | Springer                has carefully read this Separation Agreement and General Release,                has had                sufficient opportunity to review and deliberate the foregoing documents                with counsel of his own choosing, understands their contents, knowingly                and voluntarily waives and releases the claims described in the General                Release, |
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| (b)   | Springer                agrees that the consideration given for the releases contained in                the                General Release are in addition to anything of value to which Springer                already was entitled, |
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| (c)   | Springer                was advised to consult with an attorney. He has had up to twenty-one                (21)                days from receipt of this Agreement and General Release to consider                and                accept, these terms, and he has seven (7) following his execution                of this                Agreement and General Release to revoke any acceptance of this Agreement                and General Release, and |
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| (d)   | Springer                must revoke his acceptance within the seven-day period by delivering                a                written notice of his intent to revoke acceptance to Hugh W. Mohler,                at                2328 W. Joppa Road- #325, Lutherville, MD                21093. |
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**BAY      NATIONAL BANK**

| **BY:  /s/                Hugh W. Mohler**                                   | **/s/                Richard C. Springer**   |
|----------------------------------------------------------------------------------------|----------------------------------------------|
| **       HUGH                W. MOHLER, PRESIDENT** | ** RICHARD                C. SPRINGER** |
| **       2328                W. Joppa Road - #325** | **13342                Pipes Lane**          |
| **       Lutherville,                MD 21093**     | **Sykesville,                MD 21784**      |
| **       410-494-2580**                             | **410-442-2968**                             |

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