EX-10.1






AGREEMENT




     This Agreement (the “Agreement”) is made as of May 27, 2009 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 of 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 August 31, 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 an 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 than 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 an 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:

	 	/s/ V. McDonnell
	 	 
	 	By:	 	 	 	 
	Name:

	 	 

V. McDonnell
	 	 	 	Name:
	 	 

	 	 
	Title:

	 	Chairman, President & CEO
	 	 	 	Title: