Termination Agreement for Farm-In Agreement (M11 Well, Manavi Cretaceous Prospect) – NOC, GBOSC, and CanArgo

Summary

Ninotsminda Oil Company Limited (NOC), Georgian British Oil Services Company Limited (GBOSC), and CanArgo Energy Corporation have agreed to terminate their previous Farm-in Agreement regarding the M11 well in the Manavi Cretaceous prospect. In exchange for ending all mutual rights and obligations, GBOSC will receive 2,000,000 shares of CanArgo common stock. The shares are unregistered under U.S. securities law and subject to certain transfer restrictions. The agreement is governed by English law and takes effect upon share issuance.

EX-10.36 3 u47355exv10w36.txt EXHIBIT 10.36 EXHIBIT 10.36 TERMINATION AGREEMENT RELATING TO THE FARM-IN AGREEMENT COVERING THE M11 WELL ON THE MANAVI CRETACEOUS PROSPECT WITHIN THE NINOTSMINDA PSC AREA BETWEEN: NINOTSMINDA OIL COMPANY LIMITED, a company organised and existing under the laws of Cyprus ("NOC"), and GEORGIAN BRITISH OIL SERVICES COMPANY LIMITED, a company organised and existing under the laws of Georgia ("GBOSC"), and CANARGO ENERGY CORPORATION, a corporation organised and existing under the laws of Delaware, USA ("CanArgo") WHERAS: A. On 7th September 2003, NOC and GBOSC entered into a Farm-in Agreement covering: the M11 well on the Manavi Cretaceous prospect within the Ninotsminda PSC area (the "Agreement"), and B. CanArgo is the parent company of NOC and NOC is a wholly owned subsidiary of CanArgo, and C. GBOSC and NOC now desire to terminate the Agreement on mutually acceptable terms, and CanArgo wishes NOC to do so. NOW THERFORE IT IS HEARBY AGREED AS FOLLOWS: 1. The Agreement shall be terminated, and all rights and obligations of NOC and GBOSC to each other shall cease immediately upon receipt by GBOSC (or its named nominee) of a share certificate for two million (2,000,000) shares of common stock (of nominal value $0.10) in CanArgo (the "Shares"). 2. GBOSC shall inform CanArgo of the name in which GBOSC wishes the Shares to be held in writing within 14 days of the date of this Termination Agreement, and CanArgo shall issue the Shares within 14 days of receipt of the name. 3. GBOSC accepts that the Shares will not have been registered under the United States Securities Act of 1933, as amended (the "Act"), and will have been issued in reliance upon the exemption from registration contained under Regulation "S" under that Act. No disposal of the Shares may be made in the US or for the benefit of any US person unless the Shares are registered under the Act or any applicable securities laws or for a period of one year from their date of issue, whichever is the earlier. 4. CanArgo undertakes to include the Shares in any future registration statement it makes under the Act. 5. This Termination Agreement shall be governed by and construed in accordance with the law of England. Termination Agreement Page 1 IN WITNESS WHEREOF this Agreement has been duly executed on behalf of each of the parties on this the 5th day of December 2003 SIGNED by SIGNED by on behalf of NINOTSMINDA OIL COMPANY on behalf of GEORGIAN BRITISH OIL LIMITED SERVICES COMPANY LIMITED - ------------------------------------ -------------------------------------- Name /s/ DAVID ROBSON Name /s/ SHALVA BAKHTADZE ---------------- -------------------- Position President Position General Director SIGNED by on behalf of CANARGO ENERGY CORPORATION - ------------------------------------- Name /s/ V McDONNELL --------------- Position Director Termination Agreement Page 2