Exhibit 10.1
AMENDMENT, CONSENT, WAIVER AND RELEASE
     This AMENDMENT, CONSENT, WAIVER AND RELEASE (this “Agreement”) is made and
entered into as of the 9th day of February, 2007 by and among Tethys Petroleum
Limited, a company incorporated and existing in the Island of Guernsey (“TPL”)
(formerly known as Tethys Petroleum Investments Limited), Tethys Kazakhstan
Limited, a company incorporated and existing in the Island of Guernsey (“TKL,”
and together with TPL, each a “Company” and collectively the “Companies”), and
the individuals and entities who or which are signatories hereto.
     WHEREAS, CanArgo Energy Corporation, a Delaware corporation (“CanArgo”),
and certain persons (the “Original Senior Noteholders”) have entered into a Note
Purchase Agreement, as amended (the “Note Purchase Agreement”), pursuant to
which CanArgo issued $25,000,000 in aggregate principal amount of senior secured
promissory notes due July 25, 2009 (the “Senior Notes”); and
     WHEREAS, CanArgo and the Original Senior Noteholders entered into that
certain Security Agreement dated July 25, 2005 (the “Security Agreement”),
pursuant to which CanArgo granted to holders of the Senior Notes (each hereby
referred to as a “Senior Noteholder” and collectively as the “Senior
Noteholders”) a security interest in the Collateral (as defined in the Security
Agreement) to secure the payment of the Senior Notes; and
     WHEREAS, TPL is a party to that certain Guaranty Agreement dated as of
July 25, 2005 (the “Guaranty Agreement”) by TPL and the other Guarantors named
therein in favor of the Senior Noteholders, pursuant to which TPL and such other
Guarantors guaranteed the payment of the Senior Notes; and
     WHEREAS, TKL is a party to that certain Supplemental Agreement dated as of
March 3, 2006 (the “Supplemental Agreement”) in favor of the Senior Noteholders,
pursuant to which TKL became a Guarantor (as defined in the Guaranty Agreement)
under the Guaranty Agreement;
     WHEREAS, TPL is contemplating raising a minimum of US$10 million dollars in
additional capital by means of an issue of equity; and
     WHEREAS, CanArgo, the Companies and the Senior Noteholders wish to amend
the Note Purchase Agreement, the Security Agreement and the Guaranty Agreement
and terminate the Supplemental Agreement such that (i) neither TKL nor TPL shall
be a Guarantor under the Guaranty Agreement, and (ii) no securities representing
equity interests in either Company shall be deemed Collateral or subject to the
Security Agreement (but without prejudice to the terms of any new security
interest agreement put in place with respect to CanArgo Limited’s equity
interests in TPL) in order to facilitate such equity offering.

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     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency or which is hereby
acknowledged and confirmed, the parties hereto, intending to be legally bound,
hereby agree as follows:
     1. Definitions. Capitalized terms used herein but not otherwise defined
have the meanings assigned to them in the Note Purchase Agreement.
     2. Consent, Waiver and Release. Notwithstanding the provisions of any Loan
Document to the contrary provided, in accordance with Section 18 of the Note
Purchase Agreement, Section 12.7 of the Security Agreement and Section 19 of the
Guaranty Agreement, the Senior Noteholders hereby irrevocably and
unconditionally:
          (a) consent to, and waive any rights they may have under the Note
Purchase Agreement or any other Loan Documents in connection with, (i) the
amendment of (x) the Note Purchase Agreement to amend the definition of
“Collateral” (as hereinafter provided) and to delete any reference to the
Companies from Schedules 5.11 and 6.4 thereto and (y) the amendment of the
Security Agreement to amend the definition of “Investment Property” (as
hereinafter provided), (ii) the release of the securities whether now or
hereafter issued and outstanding of either Company from the Liens granted under
the Note Purchase Agreement and the Security Agreement, (iii) the amendment of
the Guaranty Agreement to delete any reference to the Companies from the
definition of “Guarantor” or “Guarantors” therein and to release both Companies
from their obligations as Guarantors thereunder and (iv) the termination of the
Supplemental Agreement. The consents, releases, amendments and waivers granted
in this Section 2 only apply to the matters described in clause (i), (ii),
(iii) and (iv) above, and do not constitute a waiver of, or consent to, any
other amendment to or waiver of any other provisions of the Loan Documents;
          (b) hereby release each of the Companies and their respective
successors, assigns, officers, directors, shareholders, agents and employees
from any all claims, damages, losses or liability, which they now have or may in
the future acquire from this date until the end of time, in respect of, or
attributable to any and all obligations of the Companies arising under or in
connection with the Note Purchase Agreement, the Security Agreement, the
Guaranty Agreement and Supplemental Agreement; and
          (c) hereby release CanArgo and its successors, assigns, officers,
directors, shareholders, agents and employees from any all claims, damages,
losses or liability, which they now have or may in the future acquire from this
date until the end of time, arising under or attributable to the release of the
securities of either Company from the Liens set forth in the Note Purchase
Agreement and the Security Agreement and the release of the Companies of their
obligations under the Guaranty Agreement and Supplemental Agreement.
     3. Amendment of the Note Purchase Agreement and the Security Agreement;
Termination Statements.

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          (a) The definitions of “Collateral” set forth in Schedule B of the
Note Purchase Agreement and the definition of “Investment Property” set forth in
Section 1(b) of the Security Agreement are hereby amended nunc pro tunc by
adding the following language at the end thereof:
     “, but excluding all capital stock or other securities issued or to be
issued in the future by either Tethys Petroleum Limited, a company incorporated
and existing in Bailiwick of Guernsey (formerly known as Tethys Petroleum
Investments Limited), or Tethys Kazakhstan Limited a company incorporated and
existing in the Island of Guernsey.”

  (b)   Schedules 5.11 and 6.4 to the Note Purchase Agreement are hereby amended
nunc pro tunc to delete therefrom any reference to the Companies.     (c)  
CanArgo is hereby authorized to file one or more UCC-3 termination statements in
the appropriate filing jurisdictions to reflect the release of collateral set
forth in Section 2(a)(ii) and subsection (a) above.

     4. Amendment of the Guaranty Agreement. The Guaranty Agreement is hereby
amended by deleting any reference to either of the Companies as a “Guarantor”
thereunder.
     5. Termination of the Supplemental Agreement. The Supplemental Agreement is
hereby terminated and deemed void ab initio and of no further force and effect.
     6. Minimum Proceeds. The parties hereby acknowledge that the consent and
waiver granted by the Purchasers pursuant to this Agreement is conditional upon
TPL receiving a minimum of US$10 million of aggregate gross proceeds from the
issue of ordinary shares of £0.01 each in the capital of TPL in connection with
a proposed investment in TPL to be completed on or about the date of this
Agreement..
     7. Effect on Loan Documents. This Agreement and the amendments set forth
herein are limited to the specific purpose for which it is entered into and,
except as specifically set forth above, (a) shall not be construed as a consent,
waiver, amendment or other modification with respect to any other term,
condition or other provision of any Loan Document and (b) each of the Loan
Documents shall remain in full force and effect and are each hereby ratified and
confirmed.
     8. Miscellaneous.
          (a) Successors and Assigns; Headings; Choice of Law, etc. This
Agreement shall be binding on and shall inure to the benefit of CanArgo, each
Company

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and the Senior Noteholders and their respective successors and assigns, heirs
and legal representatives; provided that neither CanArgo nor any Company may
assign its rights hereunder without the prior written consent of the Company and
the Required Holders. The headings in this Agreement have been inserted for
convenience purposes only and shall not be used in the interpretation or
enforcement of this Agreement. The Agreement shall be interpreted and enforced
in accordance with the laws of the State of New York, United States of America,
applicable to contracts made in and to be performed in such State. There shall
be no third party beneficiaries of any of the terms and provisions of this
Agreement.
          (b) Entire Agreement; Amendments. This Agreement, including all
documents attached hereto, incorporated by reference herein or delivered in
connection herewith, constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede all other prior understandings, oral
or written, with respect to the subject matter hereof and may not be amended, or
any provision thereof waived, except by an instrument in writing signed by the
parties hereto.
          (c) Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
          (d) Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
     IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
or by their representatives, thereunto duly authorized, as of the day and year
first above written.

                  TETHYS PETROLEUM LIMITED    
 
           
 
  By:   /s/ Dr David Robson    
 
           
 
      Name: Dr David Robson    
 
      Title: Chairman & Managing Director    
 
                TETHYS KAZAKHSTAN LIMITED    
 
           
 
  By:   /s/ Elizabeth Landles    
 
           
 
      Name: Elizabeth Landles    
 
      Title: Director    

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                  CANARGO ENERGY CORPORATION    
 
           
 
  By:   /s/ Dr David Robson    
 
           
 
      Name: Dr David Robson    
 
      Title: Chairman & CEO    

          SENIOR NOTEHOLDERS:    
 
        INGALLS & SNYDER VALUE PARTNERS L.P.      
By:
  /s/ Thomas O. Boucher Jr.    
 
        Thomas O. Boucher Jr., General Partner    
 
        NIKOLAOS D MONOYIOS      
By:
  /s/ Nikolaos D Monoyios    
 
        Nikolaos D Monoyios    
 
        THOMAS L GIPSON      
By:
  /s/ Thomas O. Boucher Jr.    
 
        Thomas O. Boucher Jr., Attorney-in-fact    
 
        ARTHUR KOENIG      
By:
  /s/ Arthur Koenig    
 
        Arthur Koenig    
 
        THOMAS L GIPSON IRA      
By:
  /s/ Thomas O. Boucher Jr.    
 
        Thomas O. Boucher Jr., Attorney-in-fact    
 
        EVAN JANOVIC      
By:
  /s/ Evan Janovic    
 
        Evan Janovic    
 
        ARTHUR ABLIN      
By:
  /s/ Arthur Ablin    
 
        Arthur Ablin    

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          FLEDGLING ASSOCIATES LLC      
By:
  /s/ Adam Janovic    
 
        Adam Janovic, Attorney-in-fact    
 
        ADAM JANOVIC      
By:
  /s/ Adam Janovic    
 
        Adam Janovic    
 
        NEIL JANOVIC      
By:
  /s/ Adam Janovic    
 
        Adam Janovic, Attorney-in-fact    
 
        ANTHONY CORSO      
By:
  /s/ Anthony Corso    
 
        Anthony Corso    
 
        JOHN GILMER      
By:
  /s/ John Gilmer    
 
        John Gilmer    
 
        MARTIN SOLOMON      
By:
  /s/ Martin Solomon    
 
        Martin Solomon    
 
        AGREED AND ACKNOWLEDGED    

                  CANARGO LIMITED    
 
           
 
  By:   /s/ Dr David Robson    
 
           
 
      Name: Dr David Robson    
 
      Title: Director    
 
                CANARGO LTD.    
 
           
 
  By:   /s/ Dr David Robson    
 
           
 
      Name: Dr David Robson    
 
      Title: Director    

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                  CANARGO NORIO LIMITED    
 
           
 
  By:   /s/ Elizabeth Landles    
 
           
 
      Name: Elizabeth Landles    
 
      Title: Director    
 
                CANARGO (NAZVREVI) LIMITED    
 
           
 
  By:   /s/ Elizabeth Landles    
 
           
 
      Name: Elizabeth Landles    
 
      Title: Director    
 
                NINOTSMINDA OIL COMPANY LIMITED    
 
           
 
  By:   /s/ Dr David Robson    
 
           
 
      Name: Dr David Robson    
 
      Title: Director    

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