EX-10.1






Exhibit 10.1




AGREEMENT




          This
Agreement (“the Agreement”) is made as of December 11, 2008 by and among CANARGO
ENERGY CORPORATION, a Delaware Corporation (the “Issuer”),
and PERSISTENCY, a Cayman Islands
limited company (the “Holder”).




          WHEREAS, the Issuer and the Holder have entered into a certain Note and Warrant Purchase
Agreement dated June 28, 2006 (the “Purchase Agreement”) relating to the 12% Subordinated
Convertible Guaranteed Notes, due June 28, 2010 (the “Subordinated Notes”) of the Issuer;




          WHEREAS, the Holder is the holder 100% of the issued and outstanding Subordinated Notes;




          WHEREAS,
pursuant to Section 11.7 of the Purchase Agreement, the
Subordinated Notes are
convertible into common stock, par value $0.10 per share (the
“Common Stock”) of the Issuer at a
price and subject to the terms and conditions of the Agreement;




          WHEREAS; the Issuer and the Holder have agreed to change certain of the terms and conditions
of the Note Purchase Agreement and the Subordinated Notes issued thereunder applicable to the
Holder’s investment in the Subordinated Notes, as set forth herein.




          NOW
THEREFORE, in consideration of the mutual covenants herein contained, and for such other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:





	 	1.	 	Subject to Section 2 of this Agreement and absent the prior written consent of the
Issuer, the Holder hereby agrees and covenants that prior to March 20, 2009 it will not
convert or exchange, or seek to convert or exchange, any or all of the Subordinated Notes
into shares of Common Stock of the Issuer, or into any other security convertible or
exchangeable into shares of Common Stock of the Issuer, pursuant to Section 11.7 of the
Note Agreement.
	 
	 	2.	 	Notwithstanding Section 1. of this Agreement, nothing herein shall be deemed to prohibit
the Holder from exercising its rights pursuant to Section 11.7 of the Note Agreement in the
event of:






	 	(a)	 	The occurrence of the Event of Default within the meaning of
Section 13 of the Purchase Agreement occurs and all the Subordinated Notes then
outstanding become immediately due and payable as provided in Section 14.1 of the
Purchase Agreement; or
	 
	 	(b)	 	The Occurrence of a Change of Control within the meaning of
Section 10.6(g) of the Purchase Agreement, other that a Change of Control
resulting from one or more of the transactions set forth in Section 10.6(g)(b)
of the Purchase Agreement to which the Holder or the affiliate of the Holder is
a party.




 









 












	 	3.	 	Except as modified hereby, all of the terms and conditions of the Purchase Agreement
shall remain in full force and effect. Capitalized terms not defined herein shall have the
meanings given them in the Purchase Agreement.
	 
	 	4.	 	This Agreement shall become effective immediately upon the execution of this Agreement
by each of the parties hereto and shall inure to the benefit of and shall be binding upon
the Holder and its Affiliates.





     WITNESS the due execution hereof as of the day and year first written above.



	 	 	 	 	 	 	 	 	 	 	 
	CANARGO ENERGY CORPORATION	 	 	 	PERSISTENCY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	Title:

	 	 	 	 	 	Title: