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.

---





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.



[REMAINDER OF PAGE
        INTENTIONALLY LEFT BLANK]

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