ASSIGNMENT OF NOTE AND LIENS

This ASSIGNMENT OF NOTE AND LIENS (this "Assignment"), dated as of December

17, 2007 (the "Effective Date" ), is made by and among Citibank, N.A., a
national banking association formerly known as Citibank Texas, N.A., as Agent
and as a Bank ("Assignor"), Sovereign Bank ( "Assignee " ), and TENGASCO, INC.,
a Tennessee corporation ("Borrower"), together with TENNESSEE LAND & MINERAL
CORPORATION, a Tennessee corporation ("TLMC"), whose address is 10215 Technology
Drive, Suite 301, Knoxville, Tennessee 37932, TENGASCO PIPELINE CORPORATION, a
Tennessee corporation ("TPC") (collectively Borrower, TLMC, and TPC shall be
referred to herein as "Debtor.")

RECITALS:

WHEREAS, Debtor and Assignor are parties to that certain Loan and Security
Agreement dated as of June 29, 2006 (as amended, supplemented, or restated to
the date hereof, the "Agreement"). The indebtedness under the Agreement is
evidenced by that certain Promissory Note dated June 29, 2006 issued by Borrower
to the order of Assignor in the original principal amount of $50,000,000 (such
note, and all notes given in renewal and extension thereof, is herein referred
to as the "Note"). Initially capitalized terms not otherwise defined herein
shall have the meaning ascribed to them in the Agreement.

WHEREAS, the payment of the Note and the performance of all obligations of
Debtor under the Agreement are secured by the various security documents listed
on Schedule 1 attached hereto and made a part hereof (as heretofore and
hereafter amended, supplemented, or restated, the "Security Documents"), which
Security Documents encumber, among other things, the oil and gas properties and
interests more particularly described in Exhibit A and Exhibit B attached hereto
and made a part hereof.

WHEREAS, Debtor has requested that Assignor assign all of its right, title, and
interest in and to the Agreement, the Note, and the Security Documents, and any
other documents executed in connection therewith or pursuant thereto, to
Assignee, and Assignee has agreed to purchase such rights, titles, and
interests, all on the terms, conditions and exceptions provided herein.

WHEREAS, reference is made to that certain Loan Agreement (the "New Credit
Agreement") of even date herewith between Assignee and Debtor, which, without
limitation, amends and restates the Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:

Section 1.     Assignment and Assumption.

(a) Assignment. Subject to the terms hereof (including but not limited to
Section 11 below), Assignor (in the capacities set forth in the opening
paragraph) , for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, does TRANSFER, CONVEY, ASSIGN, ENDORSE, SET OVER
AND DELIVER unto Assignee all of Assignor's

right, title and interest in the following, SAVE AND EXCEPT the "Reserved
Obligations" (as such term is defined in Section 11 below): (i) the Note, the
Agreement, the Security Documents and any other documents executed in connection
therewith or pursuant thereto (collectively the "Assigned Documents"), (ii) all
indebtedness and obligations owing to Assignor under or pursuant to the Assigned
Documents, (iii) all rights, titles, interests, privileges, claims, demands,
equities, liens, charges and security interests which are created in favor of or
held by Assignor under and pursuant to the Security Documents, and (iv) to the
extent not included in clauses (i), (ii) or (iii) above, any and all rights,
benefits, remedies and privileges of Assignor under the Assigned Documents. Such
rights, titles and interests hereby assigned are hereinafter collectively called
the "Assigned Interests."

(b) Acceptance and Assumption. Assignee accepts the foregoing assignment of the
Assigned Interests and agrees to assume, as of the Effective Date, all
obligations of the Assignor in its capacities as Agent and a Bank under or
pursuant to the Agreement, as it may be amended by the New Credit Agreement, and
the other Assigned Documents, save and except any such obligations which Debtor
hereby releases pursuant to the Release Provisions, as defined in Section 12
hereof, Furthermore, the Assignee accepts the foregoing assignment of the
Assigned Interests and agrees to assume, as of the Effective Date, the
obligations of the Assignor in its capacities as the mortgagee, secured party,
grantee, named beneficiary and holder of security under or pursuant to the
Agreement, as amended by the New Credit Agreement, and the other Assigned
Documents, save and except any such obligations which Debtor hereby releases
pursuant to the Release Provisions, as defined in Section 12 hereof.

Section 2. Representations and Warranties of Assignor. Assignor hereby
represents, covenants and warrants to Assignee, its successors and assigns that:
(a) Assignor is the present legal and equitable owner and holder of each of the
Assigned Documents and the indebtedness evidenced thereby, and all liens and
security interests granted to Assignor to secure such indebtedness (the
"Liens"); (b) Assignor has the full power and authority, and has taken all
corporate action necessary, to transfer and convey each of the Assigned
Documents and the indebtedness evidenced thereby, the Liens, and to execute this
Assignment; (c) as of the date hereof, the principal balance owing under the
Note is $3,300,000; (d) Assignor has not assigned, mortgaged, hypothecated,
subordinated, granted a security interest in, or otherwise encumbered any of the
Assigned Documents or the Liens to or in favor of any other parties; (e) except
in furtherance of the assignment contemplated by this Assignment, no renewal or
extension of the Note has been given; (f) Assignor has not received or issued
any written notice of any Event of Default under the Assigned Documents; (g) no
faults, claims or defenses have been asserted in writing against Assignor for
purposes of quashing, extinguishing, subordinating, temiinating or otherwise
mitigating either the Indebtedness or Assignor's Security Interest in the
Collateral; and (h) no release or subordination relating to the Assigned
Interests has been executed by Assignor. Assignor will deliver the original
counterpart of the Note to Assignee, and the original stock certificates of
Borrower's subsidiaries to Assignee, concurrently herewith; and Assignor will
promptly hereafter deliver to Assignee the original counterparts of the Assigned
Documents, to the extent that such counterparts are in the possession or control
of Assignor.

Other than as stated above in this Section 2, the assignment and transfer of the
Security Documents, the Liens, the Agreement, and the Note are made by Assignor
without recourse, representation or warranty, express or implied, statutory or
otherwise (including, without

limitation, any representation or warranty of any kind as to the priority,
validity, enforceability or the sufficiency of the Security Documents, the
Liens, the Agreement, or the Note) all of which are hereby expressly disclaimed.

Section 3. Debtor's Consent and Agreement. DEBTOR HEREBY (A) CONSENTS TO THE
FOREGOING ASSIGNMENT AND ASSUMPTION, (B) RATIFIES AND CONFIRMS THE ASSIGNED
INTERESTS, AND THE ASSIGNED DOCUMENTS, (C) RATIFIES AND CONFIRMS THE "RESERVED
OBLIGATIONS" (AS HEREINAFTER DEFINED), AND (D) RELEASES THE ASSIGNOR FROM ANY
AND ALL OBLIGATIONS UNDER OR PURSUANT TO THE AGREEMENT, INCLUDING BUT NOT
LIMITED TO OBLIGATIONS TO MAKE LOANS, ISSUE LETTERS OF CREDIT OR OTHERWISE
EXTEND CREDIT.

Section 4. Representations and Warranties of Assignee. Assignee hereby
represents, warrants, acknowledges and agrees that (a) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby, (b) it has
received a copy of the Agreement, the Security Documents and the Note, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment, (c) it has made an
independent decision to enter into this Assignment, without reliance on any
representation, warranty, covenant or undertaking by Assignor, whether written,
oral or implicit, other than as expressly set out in this Assignment, (d) it has
experience and expertise in the making of or investing in commitments or loans,
(e) it will, independently and without reliance on the Assignor and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Assigned Documents, and (f) the Assignor assumes no responsibility with
respect to (i) other than the representations and warranties of the Assignor
expressly set forth in Section 2 above, any statements, warranties or
representations made in or in connection with the Agreement or any other
Assigned Document, (ii) the financial condition of the Debtor, any of its
subsidiaries or affiliates or any other person or entity obligated in respect of
any Assigned Document, (iii) the performance or observance by the Debtor, any of
its subsidiaries or affiliates or any other person or entity of any of their
respective obligations under any Assigned Document or (iv) collectibility and
enforceability of the Assigned Documents, or title, documentation, priority of
lien or value of collateral, and subject to the foregoing, Assignee accepts the
Assigned Documents being transferred to it on an "as is", " where is" basis with
all faults and subject to any and all valid claims or defenses of all types
which may be asserted against Assignor or Assignee by any party.

Section S. Representations. Warranties and Certain Waivers of Debtor. To induce
the Assignor to sell, and the Assignee to purchase, the Assigned Interests, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Debtor hereby represents, warrants and acknowledges to
the Assignor and Assignee, and agrees that, as of the date hereof:

(a) There are no claims, offsets, defenses or counterclaims against the
enforcement of its obligations under the Assigned Documents, including without
limitation, the Reserved Obligations, and the Assignor is not in default under
any of the Assigned Documents. Debtor hereby waives any and all such claims,
offsets, defenses, counterclaims, or defaults, whether known or unknown, arising
on or prior to the Effective Date.

(b)     

The aggregate unpaid principal balance of the Note through the date hereof is
$3,300,000 and Debtor has not prepaid any interest or fees under the Note or the
Agreement that would accrue after the date hereof.

(c)     

No release or subordination relating to the Assigned Interests has been
executed, and all of the Assigned Interests (except to the extent amended or
modified hereby) are in full force and effect as described in the Assigned
Documents.

(d)     

It fully understands the terms of this Assignment and the consequences of the
execution and delivery of this Assignment, including the waivers and releases
provided for herein.

(e)     

     Debtor has the full power and authority and has taken all action necessary,
to execute this Assignment and each other document related hereto.

(f)     

It has been afforded an opportunity to have this Assignment reviewed by, and to
discuss this Assignment and each other document executed in connection herewith
with, such attorneys and other persons as Debtor may wish.

(g)     

It has entered into this Assignment and executed and delivered all documents in
connection herewith of its own free will and accord and without threat, duress
or other coercion of any kind by any Person.

Section 6. Payment: Endorsement of Note. Immediately upon (i) receipt of
$3,312,105.68 from Assignee to the account listed on Schedule 2 attached hereto
(the "Assignment Amount"), and (ii) payment of all fees and expenses of
Assignor's legal counsel, Assignor agrees to endorse the Note (by means of an
allonge) to the order of Assignee as follows: " PAY TO THE ORDER OF SOVEREIGN
BANK EXCEPT AS OTHERWISE PROVIDED IN THAT CERTAIN ASSIGNMENT OF NOTE AND LIENS
DATED DECEMBER 17, 2007, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY BY THE
UNDERSIGNED, EXPRESS OR IMPLIED."

Section 7. Acknowledgments of Assignee. Assignee acknowledges and agrees for the
benefit of Assignor that neither Assignor nor any affiliate, agent, officer,
employee or representative of Assignor has made to Assignee any verbal or
written representations, warranties, promises or guarantees whatsoever, express
or implied, other than those expressly set forth in this Assignment, and, in
particular, no such representations, warranties, guarantees or promises have
been made with respect to the status of the Note, the Assigned Documents, and
any collateral pledged to Assignor therefor.

     Section 8.      Conditions to Effectiveness. This Assignment shall be
effective upon satisfaction
or completion of the following:

(a)     

     each party hereto shall have delivered duly and validly originals of this
Agreement to Assignor;

(b)     

     except as Assignee may otherwise waive, the representations and warranties
set forth in Section 2, and Section 5 hereof are true and correct;

(a)     

(c)     

     except as Assignor may otherwise waive, the representations and warranties
set forth in Section 4 hereof are true and correct; and

(d)     

     Assignor shall have received the Assignment Amount and the attorney fees of
Assignor's counsel shall be paid in full.

Section 9. Counterparts. This Assignment is being executed in several
counterparts all of which are identical, except that, to facilitate recordation,
certain counterparts hereof being recorded in certain jurisdictions may have
attached to them those portions of certain Exhibits to certain of the Security
Documents which include descriptions of properties located in the county where
the particular counterpart is being recorded. All of such counterparts together
constitute one and the same instrument (including electronic copies).

Section 10_ Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Texas, excluding its conflict of laws
rules, except to the extent that the assignment of any liens or security
interests is mandatorily governed under the laws of the jurisdiction in which
the properties subject thereto are located.

Section 11. Reserved Obligations. Notwithstanding any other provisions hereof or
in any other agreement, Debtor shall remain fully liable to Assignor or to any
of its officers, directors, employees, representatives, agents, trustees or
affiliates (individually, an "Indemnified Party") with respect to all
obligations and liabilities, if any, regarding indemnification and reimbursement
of fees, expenses and other obligations owing or to be owing by Debtor to
Assignor or any Indemnified Party under any provision of any of the Assigned
Documents (collectively, the "Reserved Obligations"), and such Reserved
Obligations shall be and are hereby excepted and reserved by Assignor from the
rights, titles and interest assigned to Assignee hereunder; provided, however,
such Reserved Obligations shall not be secured by the Security Documents.
Notwithstanding anything to the contrary contained herein, Assignee and Debtor
each acknowledge and agree that all Reserved Obligations shall survive in favor
of Assignor and the Indemnified Parties. Debtor does hereby expressly
acknowledge and agree that Assignor's retention of the Reserved Obligations does
not relieve Debtor of such obligations as to Assignee, its successors, assigns
and Indemnified Parties, as that term is defined in the Agreement.

     Section 12.      Release of Assignor. As a material part of the
consideration for the Assignor
entering into this Assignment, Debtor agrees as follows (the "Release
Provision"):

(a) Debtor hereby releases and forever discharges Assignor's and Assignor's
predecessors, successors, assigns, officers, managers, directors, shareholders,
employees, agents, attorneys, representatives, parent corporations,
subsidiaries, and affiliates (hereinafter all of the above collectively referred
to as "Lender Group") jointly and severally from any and all claims,
counterclaims, demands, damages, debts, agreements, covenants, suits, contracts,
obligations, liabilities, accounts, offsets, rights, actions, and causes of
action of any nature whatsoever, including, without limitation, all claims,
demands, and causes of action for contribution and indemnity, whether arising at
law or in equity, whether presently possessed or possessed in the future,
whether known or unknown, whether liability be direct or indirect, liquidated or
unliquidated, whether presently accrued or to accrue hereafter, whether absolute
or contingent,

      foreseen or unforeseen, and whether or not heretofore asserted, which
Debtor may have or claim to have against any of Lender Group that relates in any
way to any of the Assigned Documents; provided, however, that Assignor shall not
be released hereby from any obligation to pay to Debtor any amounts that Debtor
may have on deposit with Assignor, in accordance with applicable law and the
terms of the documents establishing any such deposit relationship.

(b) Debtor agrees not to sue any of Lender Group or in any way assist any other
person or entity in suing Lender Group with respect to any claim released
herein. The Release Provision may be pleaded as a fall and complete defense to,
and may be used as the basis for an injunction against, any action, suit, or
other proceeding which may be instituted, prosecuted, or attempted in breach of
the release contained herein.

(c)     Debtor acknowledges, warrants, and represents to Lender Group that:

(i)     

Debtor has read and understands the effect of the Release Provision. Debtor has
had the assistance of independent counsel of its own choice, or has had the
opportunity to retain such independent counsel, in reviewing, discussing, and
considering all the terms of the Release Provision; and if counsel was retained,
counsel for Debtor has read and considered the Release Provision and advised
Debtor to execute the same. Before execution of this Assignment, Debtor has had
adequate opportunity to make whatever investigation or inquiry it may deem
necessary or desirable in connection with the subject matter of the Release
Provision.

(ii)     

Debtor is not acting in reliance on any representation, understanding, or
agreement not expressly set forth herein. Debtor acknowledges that Lender Group
has not made any representation with respect to the Release Provision except as
expressly set forth herein.

(iii)     

Debtor has executed this Assignment and the Release Provision thereof as its
free and voluntary act, without any duress, coercion, or undue influence exerted
by or on behalf of any person.

(iv)     

Debtor is the sole owner of the claims released by the Release Provision, and
Debtor has not heretofore conveyed or assigned any interest in any such claims
to any other person or entity.

(d)      Debtor understands that the Release Provision was a material
consideration in the agreement of the Assignor ender to enter into this
Assignment.

(e) It is the express intent of Debtor that the release and discharge set forth
in the Release Provision be construed as broadly as possible in favor of Lender
Group so as to foreclose forever the assertion by Debtor of any claims released
hereby against Lender Group.

(f) If any term, provision, covenant, or condition of the Release Provision is
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable, the remainder of the provisions shall remain in full force and
effect.

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Section 13. No Recourse. Assignee acknowledges and agrees that, in respect of
the Note and the Assigned Documents, Assignee may ultimately receive from Debtor
an amount less than the Assignment Amount and that Assignee shall have no
recourse against Assignor or any member of the Lender Group for such deficiency
of the principal, interest, fees, expenses or any other amounts owing under the
Note, or under or pursuant to any of the Assigned Documents or any other
document executed in connection therewith.

Section 14. Additional Documents. Each of the Assignor, Assignee and Debtor
hereby agree to, from time to time and upon the reasonable request, execute and
deliver to the requesting party any documents which are reasonably necessary to
carry out more effectively the purposes of this Assignment, including without
limitation any financing statements or assignments, properly completed (and
acknowledged when required). Debtor and Assignor hereby authorize the Assignee
to file any financing statements, financing statement amendments, assignments or
releases without the signature of the Debtor or Assignor to the extent permitted
by applicable law in order to perfect or maintain the perfection of any security
interest granted under the any of the Assigned Documents and in order to
effectuate the purpose of this Assignment.

Section 15. Construction. The parties hereto acknowledge and agree that neither
this Assignment nor the other documents executed pursuant hereto shall be
construed more favorably in favor of one than the other based upon which party
drafted the same, it being acknowledged that all parties hereto contributed
substantially to the negotiation and preparation of this Assignment and the
other documents executed pursuant hereto or in connection herewith.

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EXECUTED by the parties hereto as of the dates of their respective
acknowledgments hereto, to be effective as of the date first written above.

CITIBANK, N.A.

(formerly known as Citibank Texas, N.A.), in its capacities as Agent and a Bank

By: s/Angela McCracken Vice President

 

SOVEREIGN BANK

By: s/Christina Kitchens Assistant Vice President

 

TENGASCO, INC.

By: s/Jeffrey R.Bailey, Chief Executive Officer

 

Tennessee Land and Mineral Corp

s/Jeffrey R. Bailey President

 

Tengasco Pipeline Corp.

s/Jeffrey R. Bailey