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Exhibit 10.19
Seventeenth Amendment to Loan and Security Agreement dated March 16, 2015
between Tengasco, Inc. as borrower and Prosperity Bank as Lender

 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Seventeenth Amendment to Loan and Security Agreement (this “Amendment”) is
made and entered into as of March 16, 2015 (“Effective Date”), by and between
PROSPERITY BANK, a Texas state banking association, successor by merger to The
F&M Bank & Trust Company (“Lender”), acting as a lender on its own behalf, as
Agent under the Loan Agreement (as defined below), and as collateral agent on
behalf of CARGILL, INCORPORATED, a Delaware corporation (“Cargill”) as a Hedge
Provider, and TENGASCO, INC., a Delaware corporation (“Borrower”), TENNESSEE
LAND & MINERAL CORPORATION (“TLMC”), TENGASCO PIPELINE CORPORATION (“TPC”) and
MANUFACTURED METHANE CORPORATION (“MMC”) (each of TLMC, TPC, and MMC are a
“Guarantor” and collectively “Guarantors”) (collectively referred to herein as
the “Parties”).

RECITALS

A.      Borrower and Lender’s predecessor-in-interest, Citibank, N.A., a
national banking association formerly known as Citibank Texas, N.A., as Agent
and as a Bank (“Citibank”), (which was succeeded by Sovereign Bank (“Sovereign”)
and Lender) previously entered into that certain Loan and Security Agreement
dated effective June 29, 2006, (as assigned, assumed, amended, supplemented, or
restated to the date hereof, the “Loan Agreement”); whereby the Banks party to
the Credit Agreement agreed to extend a Line of Credit to Borrower equal to the
Commitment Amount, pursuant to the terms and conditions set forth in the Loan
Agreement (the “Loan”);

B.      To evidence the Loan, Borrower executed and delivered to Citibank that
certain Promissory Note dated June 29, 2006 (as amended and replaced the
“Note”), payable to the order of Citibank in the original principal sum of Fifty
Million and No/100 Dollars ($50,000,000), bearing interest and being payable as
therein provided, and such Note has been (i) assigned to Sovereign by that
certain Assignment of Note and Liens, dated as of December 17, 2007, by and
between Citibank (as assignor) and Sovereign (as assignee) and (ii) further
assigned to Lender by that certain Assignment of Note and Liens dated as of July
30, 2010, by and between Sovereign (as assignor) and Lender (as assignee); and

C.      The Parties now desire to further amend the Loan Agreement to decrease
the current Commitment Amount and Revolving Credit Borrowing Base and to extend
the Maturity Date, as herein set forth.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
 

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ARTICLE I
CAPITALIZED TERMS; DEFINITIONS

Section 1.01   Definitions.  Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same definitions assigned to
such terms in the Loan Agreement, as amended hereby. To the extent applicable,
the term “Lender” as used in this Amendment shall also refer to Lender in its
capacity as Agent and as a Bank under the Loan Agreement.

ARTICLE II
AMENDMENTS TO THE LOAN AGREEMENT

Section 2.01   Section 1.15 of the Loan Agreement (Commitment Amount). As of the
Effective Date, and subject to the conditions precedent required by the
provisions of Article III of this Amendment, Section 1.15 of the Loan Agreement
is deleted in its entirety and replaced with the following:

“1.15.   Commitment Amount shall mean, as of the Seventeenth AmendmentEffective
Date, Seven Million Eight Hundred Thousand Dollars ($7,800,000) or such other
amount as agreed to in writing by Borrower, Banks, and Agent, but in no event in
excess of the lesser of (a) the Maximum Line of Credit Amount of (b) the
Revolving Credit Borrowing Base, as adjusted and redetermined from time to time
pursuant to the provisions of Article III.”

Section 2.02   Section 1.45.7 of the Loan Agreement (Seventeenth Amendment
Effective Date). As of the Effective Date, and subject to the conditions
precedent required by the provisions of Article III of this Amendment, Section
1.45.7 is added to the Loan Agreement to read as follows:

“1.45.7   Seventeenth Amendment Effective Date shall mean the Effective Date
ofthat certain Seventeenth Amendment to Loan and Security Agreement amending
theAgreement.”

Section 2.03   Section 1.52 of the Loan Agreement (Maturity Date). As of the
Effective Date, and subject to the conditions precedent required by the
provisions of Article III of this Amendment, Section 1.52 of the Loan Agreement
is deleted in its entirety and replaced with the following:

“1.52   Maturity Date shall mean, unless a Note is sooner accelerated pursuant
toSection 10.2 hereof, January 27, 2017.”

Section 2.04    Section 3.1 of the Loan Agreement (Borrowing Base). As of the
Effective Date, and subject to the conditions precedent required by the
provisions of Article III of this Amendment, Section 3.1 of the Loan Agreement
is hereby amended by deleting the last sentence at the end of Section 3.1 and
replacing it with the following:
 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT – Page 2
 

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“Until further determination by Lender pursuant to the semiannual determinations
or otherwise pursuant to the terms hereof, Lender and Borrower agree and
stipulate that the Revolving Credit Borrowing Base as of the Seventeenth
Amendment Effective Date shall be $7,800,000.”

ARTICLE III
CONDITIONS PRECEDENT

Section 3.01   Conditions Precedent. When all of the following conditions
precedent have been fulfilled to the satisfaction of Lender, this Amendment
shall become effective:

 
 (a)      The representations and warranties contained herein and in each of
theother Loan Documents shall be true and correct as of the date hereof as if
made on thedate hereof;
 
 (b)       No Default or Event of Default shall have occurred and be continuing;
 
 (c)       Borrower and each Guarantor shall have executed and delivered
thisAmendment and such other documents and agreements as Lender may
reasonablyrequest;
 
 (d)       All corporate proceedings taken in connection with the
transactionscontemplated by this Amendment and all documents, instruments, and
other legal mattersincident thereto shall be satisfactory to Lender and its
legal counsel in their solediscretion;
 
 (e)       Lender shall have received such other documents, instruments,
oragreements as Lender shall reasonably request in connection with the execution
of thisAmendment; and
 
 (f)        Borrower shall pay the legal fees and expenses of Lender’s counsel
inconnection with the preparation, negotiation, and execution of this Amendment.

ARTICLE IV
RATIFICATIONS, REPRESENTATIONS, AND WARRANTIES

Section 4.01   Ratifications by Borrower. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Loan Agreement and, except as expressly modified and superceded
by this Amendment, the terms and provisions of the Loan Agreement are ratified
and confirmed and shall continue in full force and effect. The Loan Agreement as
amended by this Amendment shall continue to be legal, valid, binding, and
enforceable in accordance with its terms. Borrower acknowledges and agrees that
there are no claims or offsets against, or defenses or counterclaims to, the
terms and provisions of the Loan Agreement or any Note or the indebtedness,
obligations, and liabilities of Borrower to Lender or the liens and security
interests securing such indebtedness (including without limitation any defenses
or offsets resulting from or arising out of breach of contract or duty, the
amounts of interest charged, collected or received heretofore on any Note or
other indebtedness, or breach of any commitments or promises of any type).
 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT – Page 3
 

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Section 4.02    Renewal and Extension of Security Interests and Liens.  Each of
Borrower and Guarantors hereby renews, affirms, and ratifies all security
interests and liens created and granted by it to secure the indebtedness,
obligations and liabilities of Borrower and Guarantors to Lender. Each of
Borrower and Guarantors agrees that this Amendment shall in no manner affect or
impair the liens and security interests securing such indebtedness, obligations,
and liabilities, and that such liens and security interests shall not in any
manner be waived, the purposes of this Amendment begin to modify the Loan
Agreement as herein provided, and to carry forward all liens and security
interests securing the indebtedness, obligations and liabilities of Borrower and
Guarantors to Lender, which security interests and liens are acknowledged by
Borrower and Guarantors to be valid and subsisting. Further, Borrower and
Guarantors hereby covenant and agree that Lender may, without the signature of
Borrower, file UCC Financing Statements in any jurisdiction to perfect any
security interest now or hereafter granted to Lender.

Section 4.03    Representations and Warranties.  Borrower represents and
warrants to Lender as follows: (i) the execution, delivery, and performance of
this Amendment and any and all documents, agreements, and instruments executed
and/or delivered in connection herewith have been authorized by all requisite
corporate action on the part of Borrower and will not violate the Articles of
Incorporation or bylaws of Borrower or any agreement to which Borrower is a
party; (ii) the representations and warranties contained in the Loan Agreement
as amended hereby and in each of such other documents, agreements, and
instruments are true and correct on and as of the date hereof as though made on
and as of the date hereof; (iii) except as disclosed to Lender, no default or
Event of Default under the Loan Agreement has occurred and is continuing, and
(iv) except as disclosed to Lender, Borrower is in full compliance with all
covenants and agreements contained in the Loan Agreement, as amended hereby.

ARTICLE V
MISCELLANEOUS

Section 5.01    Survival of Representations and Warranties.  All representations
and warranties made in the Loan Agreement or any other documents, agreements, or
instruments executed in connection therewith, shall survive the execution and
delivery of this Amendment, and no investigation by Lender or any closing shall
affect such representations and warranties or the right of Lender to rely
thereon.

Section 5.02    Reference to Loan Agreement.  Each of the Loan Documents and the
Loan Agreement and any and all other agreements, documents, or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Loan Agreement as amended hereby, are hereby amended so that
any reference in such documents, agreements, and instruments to the Loan
Agreement shall mean a reference to the Loan Agreement as amended hereby.

Section 5.03    Severability.  Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT – Page 4
 

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Section 5.04    APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE
AND TO BE PERFORM ABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.

Section 5.05    Successors and Assigns.  This Amendment is binding upon and
shall inure to the benefit of the Parties and their respective successors,
assigns, heirs, executors, and legal representatives, except that none of the
Parties other than Lender may assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.

Section 5.06    Counterparts.  This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which, when taken together, shall constitute one and the same
instrument.
  

Section 5.07    Effect of Waiver.  No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant, condition, or
duty by Borrower, shall be deemed a consent to or waiver of any other breach of
the same or any other covenant, condition, or duty.

Section 5.08    Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

Section 5.09    Conflicting Provisions.  If any provision of the Loan Agreement
as amended hereby conflicts with any provision of any other Loan Document, the
provision in the Loan Agreement shall control.

Section 5.10    RELEASE. FOR AND IN CONSIDERATION OF THIS AMENDMENT AND OTHER
GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER
DISCHARGES LENDER, ITS AGENTS, EMPLOYEES, SUCCESSORS, AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES,
AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF (I) CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, (II) ANY LOAN, (III) ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING, OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL
RATE APPLICABLE, (IV) THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THIS
AMENDMENT, THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR (V) THE
NEGOTIATION, EXECUTION, OR DELIVERY OF THIS AMENDMENT, THE LOAN AGREEMENT, OR
ANY OTHER LOAN DOCUMENTS.
 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT – Page 5
 

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Section 5.11     ENTIRE AGREEMENT. THIS AMENDMENT, THE LOAN AGREEMENT AS AMENDED
HEREBY, AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
AND PURSUANT TO THIS AMENDMENT AND THE LOAN AGREEMENT, REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Section 5.12     Legal Fees and Expenses. Notwithstanding anything contained in
the Loan Agreement, as amended, to the contrary, Borrower shall pay all costs,
fees, and expenses (including legal fees and expenses) incurred by Lender
arising out of or in connection with (i) the Loan Agreement, this Amendment, and
the Loan, (ii) the negotiation, preparation, execution, delivery, and
enforcement of the Loan Agreement, as amended, and (iii) the collection of the
Loan. Borrower hereby authorizes Lender to deduct from Borrower’s accounts
maintained with Lender, the amount of any costs, fees, and expenses owed by
Borrower when due.

[Signatures on following pages.]
 
SEVENTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT – Page 6
 

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IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be
executed as on the day and date first above written.

 
LENDER:
       
Prosperity Bank, successor by merger to
The F&M Bank & Trust Company, in
 its capacity as Agent, as a Bank, and as
Collateral Agent
       
By:
s/ Alan Greenfield
   
Alan Greenfield,
   
Senior Vice President
       
BORROWER:
       
Tengasco, Inc., a Delaware corporation
       
By:
s/ Michael J. Rugen
   
Michael J. Rugen
   
Chief Executive Officer

 
[Signature Page to Seventeenth Amendment]
 

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Acknowledged and Accepted this 16th day
of March, 2015, by the following Loan Parties:
 
Tennessee Land & Mineral Corporation,
a Tennessee corporation
       
By:
s/ Michael J. Rugen
   
Michael J. Rugen
   
President
       
Tengasco Pipeline Corporation,
 
a Tennessee corporation
       
By:
s/ Michael J. Rugen
   
Michael J. Rugen
   
President
       
Manufactured Methane Corporation,
 
a Tennessee corporation
       
By:
s/ Michael J. Rugen
   
Michael J. Rugen
   
Vice-President
 

[Signature Page to Seventeenth Amendment]
 
 

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