THIS AMENDED AND RESTATED AGREEMENT is made as a Deed the 27th day of August 2004:- BETWEEN WHEREAS:- NOW THEREFORE IT IS IT IS AGREED as follows:-

THIS AMENDED AND RESTATED AGREEMENT is made as a Deed the 27th day of August 2004:-

BETWEEN

WHEREAS:-

NOW THEREFORE IT IS IT IS AGREED as follows:-

IN WITNESS of which the parties have executed and delivered this document as a deed on the date first before written.

SCHEDULE

Part 1

Warrant Certificate

CANARGO ENERGY CORPORATION (the “Company”)

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Commerce House
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Warrant representing subscription rights for shares of common stock of par value of US$0.10 in the capital of the Company

This is to certify that [Salahi Ozturk of ▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇] (the “Holder”) is the registered holder of a Warrant which entitles the holder to subscribe for 2,000,000 shares of common stock of par value of US$0.10 in the capital of the Company fully paid (the “Warrant Shares”) at a price of 105% of the Market Price (as defined in the agreement between the Company and Salahi Ozturk dated [                  ] (the “Agreement”)) per Warrant Share subject to the terms of the Agreement, the relevant provisions of which are incorporated herein by reference as if fully set forth herein. Subject as aforesaid the Holder shall be entitled to subscribe for the Warrant Shares upon exercise of the Warrant and may exercise the Warrant in whole or in part and from time to time.

THE WARRANTS REPRESENTED HEREBY AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS (COLLECTIVELY, THE “WARRANT SECURITIES”), HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION AFFORDED UNDER THE ACT AND APPLICABLE SECURITIES LAWS OF OTHER JURISDICTIONS. THE WARRANT SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS APPLICABLE (IN WHICH CASE THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO SUCH EFFECT) AND THE PROVISIONS OF ALL OTHER APPLICABLE SECURITIES LAWS ARE OBSERVED.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE ACT IN RELIANCE UPON THE PROVISIONS OF REGULATION S PROMULGATED UNDER SAID ACT. ACCORDINGLY, THE WARRANTS MAY NOT BE EXERCISED IN THE “UNITED STATES” OR BY OR ON BEHALF OF ANY “U.S PERSON” AND THE WARRANT SECURITIES MAY NOT BE DELIVERED WITHIN THE UNITED STATES OTHER THAN IN OFFERINGS DEEMED TO MEET THE DEFINITION OF AN “OFFSHORE TRANSACTION” (AS ALL SUCH TERMS ARE DEFINED IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.

Dated

EXECUTED AND DELIVERED AS A DEED

by CANARGO ENERGY CORPORATION acting by

Note: No transfer of any or all of the subscription rights represented by this Warrant will be registered without the prior written consent of the Company and production of this Warrant or an indemnity satisfactory to the Company.

Part 2

Exercise Notice

Part 3

Representations and Warranties

The Lender hereby represents, warrants and covenants to the Company as follows:

The Lender understands and acknowledges that (a) the Warrants and the Warrants Shares to be issued in respect thereof and the shares of Common Stock (the “Conversion Stock”) to be issued upon conversion of the Loan and Additional Loan (collectively, the “Loans”) have not been and, except as provided in the Agreement, will not be registered under the Securities Act, and may not be offered or sold in the United States or to, or for the account or benefit of, any “U.S. person” (as defined in Regulation S), unless such Warrants or, in the event that the Warrants have been exercised, the Warrant Shares or the Conversion Stock, as the case may be, are registered under the US Securities Act and any applicable state securities or blue sky laws or such offer or sale is made pursuant to exemptions from the registration requirements of such laws, (b) the Warrants and upon exercise, the Warrant shares, and upon conversion of the Loans, the conversion Stock, are being issued pursuant to the terms of Regulation S under the Securities Act, which permits securities to be sold to non-“U.S. persons” in “offshore transactions” (as defined in Regulation S), subject to certain terms and conditions, (c) the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgements and understandings of the Lender set forth herein in order to determine the availability of the exemptions from registration under the Securities Act relied upon by the Company and the suitability of the Lender to acquire the Warrant, Warrants Shares and the Conversion Stock; (d) the Warrants have been issued, and the Warrant Shares and the Conversion Stock will be issued, to the Lender in an “offshore transaction” and Lender has not engaged in, nor will the Lender engage in any “directed selling efforts”, as each such term is defined in Regulation S, and (e) in the view of the Commission, the statutory basis for the exemption from registration claimed for this issue would not be present if the issue of the Warrants, Warrant Shares and Conversion Stock although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the Securities Act and, accordingly, the Lender is making the representations and warranties in this schedule to evidence its compliance with the applicable requirements of the Securities Act and that its participation in such offering is not a part of any such plan or scheme.

The Lender is receiving the Warrants and subsequently purchasing the Warrant Shares and, upon conversion of the Loans, the Conversion Stock, for its own account or for persons or accounts as to which it exercises investment discretion. Neither the Lender nor such person or account is a “U.S. person” (as defined in Regulation S) and neither the Lender nor such other person or account has any present intention to sell either the Warrants or, upon exercise of the Warrants, the Warrant Shares, or upon conversion of the Loans, the Conversion Stock, in the United States or to a U.S. person or for the account or benefit of a U.S. person either now or promptly after expiration of the first anniversary of the date of delivery of the Warrants or, with respect to the Loans, the first anniversary of the execution and delivery of the Agreement (“Restricted Period”).

EXECUTED AND DELIVERED AS A DEED

by CANARGO ENERGY CORPORATION acting by