8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 16, 2009

CANARGO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-32145	91-0881481
(State or other jurisdiction Of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

CanArgo Energy Corporation P.O. Box 291, St. Peter Port Guernsey, British Isles	GY1 3RR
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code +(44) 1481 729 980

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-10.1

The matters discussed in this Current Report on Form 8-K include forward looking statements, which are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such forward looking statements. Such risks, uncertainties and other factors include the uncertainties inherent in oil and gas development and production activities, the effect of actions by third parties including government officials, fluctuations in world oil prices and other risks detailed in the Company’s Reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. The forward-looking statements are intended to help shareholders and others assess the Company’s business prospects and should be considered together with all information available. They are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company cannot give assurance that the results will be attained.

Section 1 — Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

On June 28, 2006 CanArgo Energy Corporation, (“CanArgo”), entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with Persistency, a Cayman Islands company with limited liability (“Persistency”), relating to the purchase of CanArgo’s 12% Subordinated Convertible Guaranteed Notes, due June 28, 2010 (the “Subordinated Notes”).

On October 16, 2009, CanArgo entered into a further agreement (the “Agreement”) with Persistency whereby Persistency agrees and covenants that prior to December 31, 2009, absent the Company’s consent, or the Subordinated Notes becoming immediately due and payable, or a Change of Control as defined in the Purchase Agreement (other than as a result of a transaction with Persistency or its affiliate), 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 CanArgo, or into any other security convertible or exchangeable into shares of common stock of CanArgo, pursuant to Section 11.7 of the Purchase Agreement.

A copy of the Agreement is attached hereto as Exhibit 10.1.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.		Exhibit Description
	10.1	Form of Agreement dated as of October 16, 2009 between CanArgo Energy Corporation and Persistency

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CANARGO ENERGY CORPORATION
Date: October 23, 2009	By:	/s/ Jeffrey Wilkins
		Jeffrey Wilkins, Corporate Secretary

EX-10.1

Exhibit 10.1

AGREEMENT

     This Agreement (the “Agreement”) is made as of October 16, 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 December 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:		By:
	Name:		Name:
	Title:		Title:

2