EXHIBIT
      10.1

    


    FIRST
      AMENDMENT TO

    TERM
      CREDIT AGREEMENT

     

    THIS
      FIRST AMENDMENT TO TERM CREDIT AGREEMENT (this “First Amendment”)
      is
      entered into effective as of October 22, 2008 between RANCHER
      ENERGY CORP.,
      a
      Nevada corporation (“Borrower”),
      and
GASROCK
      CAPITAL LLC,
      a
      Delaware limited liability company (“Lender”).
      Capitalized terms used but not defined in this First Amendment have the meaning
      given them in the Credit Agreement (defined below).

     

    RECITALS

     

    A. Borrower
      and Lender entered into that certain Term Credit Agreement dated as of October
      16, 2007 (as amended, restated or supplemented from time to time, the
“Credit
      Agreement”).

     

    B. Borrower
      and Lender have agreed to amend the Credit Agreement, subject to the terms
      and
      conditions of this First Amendment.

     

    AGREEMENT

     

    NOW
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are acknowledged, the undersigned hereby agree as follows:

     

    1.  Amendments
      to Credit Agreement. 

    


    Section
      1.1, Defined Terms
      of the
      Credit Agreement is hereby amended by revising the following definition in
      its
      entirety to read as follows:

     

    “Maturity
      Date”
means
      the earliest of (a) April 30, 2009, (b) the date on which all Obligations (other
      than the obligations under any ORRI Conveyance and indemnity obligations and
      similar obligations that expressly survive the termination of the Loan
      Documents) have been paid in full and this Agreement has terminated, and (c)
      the
      date on which Lender notifies Borrower of the acceleration of payments of all
      or
      any portion of the Obligations based on the occurrence of an Event of
      Default.

     

    Section
      2.6(c)
      is
      hereby amended to add the following text immediately following the last sentence
      thereof:

     

    In
      addition to the foregoing and to the extent any portion of the Interest Reserve
      remains unapplied on the Repayment Dates as set forth below, Borrower hereby
      instructs Lender, and Lender hereby agrees, to apply the balance of such
      Interest Reserve, if any, against the accrued and unpaid interest due on the
      Principal Amount on the Repayment Dates as follows: (i) first, the amount of
      the
      Interest Reserve in excess of $300,000 against the accrued and unpaid interest
      payable on the January 2009 Repayment Date; (ii) second, the 

    
      
         

      

      
         

        
          

        

      

      
         

      

    



    amount
      of
      Interest Reserve in excess of $206,666.67, if any, against the accrued and
      unpaid interest payable on the February 2009 Repayment Date; (iii) third, the
      amount of the Interest Reserve in excess of $100,000, if any, against the
      accrued and unpaid interest payable on the March 2009 Repayment Date; and (iv),
      fourth, the remainder of such Interest Reserve, if any, against the accrued
      and
      unpaid interest payable on the April 2009 Repayment Date; provided
      that
      in the
      event Lender applies the balance of such Interest Reserve, if any, in accordance
      with the foregoing, Borrower shall not be required to deposit additional funds
      into the Lender Account sufficient to eliminate any such deficit in the Interest
      Reserve created thereby. If, on the Maturity Date and after applying the
      foregoing accrued interest payments, any excess Interest Reserve amount exists,
      such excess shall be applied to the outstanding Principal Amount.

     

    Section
      7.1(d)
      is
      hereby amended to add the following subsection (v) immediately following
      subsection (iv) thereof:

     

    (v)
      Subject to clause (ii) above, Borrower shall permit Lender or its
      representatives to consult directly with any of Borrower’s advisors or
      consultants that are hired or employed from time to time in connection with
      Borrower’s assets, business or operations and the acquisition and divestitures
      or financing in connection with any of its assets, business or operation,
      including, without limitation, Growth Capital Partners and Borrower agrees
      to
      promptly notify Lender of any such newly hired or employed advisors or
      consultants.

     

    Sections
      8.4(a) and 8.4(b)
      are
      hereby deleted in their entirety and replaced with the following:

     

    (a)
      On
      the Closing Date, Borrower shall grant to Lender an ORRI covering the Leases
      more particularly described on Exhibit
      A
      attached
      hereto, pursuant to the ORRI Conveyance, equal to 2% of 8/8ths proportionately
      reduced to Borrower’s Working Interest. Additionally, effective as of October 1,
      2008, Borrower shall grant to Lender an ORRI covering the Leases more
      particularly described on Exhibit A attached hereto, pursuant to the ORRI
      Conveyance, equal to 1% of 8/8ths proportionately reduced to Borrower’s Working
      Interest (which is in addition to the ORRI described above).

    


    (b)
      After
      the Closing Date, during the term of this Agreement or so long as the
      Obligations remain outstanding, Borrower shall assign to Lender an ORRI
      (pursuant to an ORRI Conveyance) covering each Lease acquired by Borrower after
      the Closing Date, which ORRI shall be equal to 2% of 8/8ths proportionately
      reduced to Borrower’s Working Interest; provided that,
      from
      and after October 1, 2008, any such ORRI shall be 3% of 8/8ths proportionately
      reduced to Borrower’s Working Interest.

    


    Sections
      8.5(a) and 8.5(d)
      are
      hereby deleted in their entirety and replaced with the following:

     

    (a)  
      Prior to
      the Maturity Date, the Borrower may purchase from Lender one-third (1/3rd)
      of
      the entire ORRI granted or assigned to Lender under the ORRI Conveyances in
      accordance with Section
      8.4,
      so
      that, after giving effect to such purchase, Lender’s ORRI 


    (b)  on
      all
      Borrower’s Leases and Wells will be equal to 2.0% of 8/8ths proportionately
      reduced to Borrower’s Working Interest.

    


    (c)  The
      amount of the purchase price for the repurchased ORRI shall be the “supplemental
      amount” needed to cause the following equation to equal 1.4: (i) the
sum
      of
      (A) the
      Principal Amount paid to Lender, plus
      (B) all
      accrued interest on the Principal Amount paid to Lender, plus
      (C) all
      payments in respect of the ORRI paid to Lender, plus
      (D) the
      supplemental amount, divided
      by
      (ii)
      12,240,000.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      10.1(a)
      is
      hereby deleted in its entirety and replaced with the following:

     

    (a)  Borrower
      fails to (i) pay any portion of the Obligations (principal, interest, fees
      or
      expenses) when the same is due and payable, whether on a Repayment Date, at
      a
      date for the payment of an installment, or at a date fixed for prepayment
      thereof; provided
      that
      Borrower
      shall not be deemed to have failed to pay an interest payment on a Repayment
      Date if Lender debits such interest payment from the Lender Account on such
      Repayment Date, or (ii) except as otherwise provided in Section
      2.6(c),
      replenish the Interest Reserve in the Lender Account within 3 Business Days
      after Lender debits an interest payment from the Lender Account on a Repayment
      Date;

    


    2.  Conditions
      to Closing First Amendment. This
      First Amendment shall be effective once each of the following conditions
      precedent have been satisfied, unless specifically waived in writing by
      Lender:

    


    (a)  Lender
      shall have received the following documentation, each in form and substance
      satisfactory to Lender and its legal counsel, in their sole
      discretion:

    


                        (i)  this
      First Amendment executed by Borrower and Lender;

    


                        (ii)  the
      ORRI
      Conveyance executed by Borrower and Lender; and

    


                        (iii)  such
      other documents as Lender may reasonably request.

    


    (b)  Borrower
      shall have paid to Lender the amount of $2,240,000 as a principal
      repayment.

    


    3.  Representations
      and Warranties.
      Borrower represents and warrants to Lender that (a) it possesses all requisite
      power and authority to execute, deliver and comply with the terms of this First
      Amendment, (b) this First Amendment has been duly authorized and approved by
      all
      requisite corporate action on the part of Borrower, (c) no other consent of
      any
      Person (other than Lender) is required for this First Amendment to be effective,
      (d) the execution and delivery of this First Amendment does not violate its
      organizational documents, (e) the representations and warranties in each Loan
      Document to which it is a party are true and correct in all material respects
      on
      and as of the date of this First Amendment as though made on the date of this
      First Amendment (except
      to the
      extent that such representations and warranties speak to a specific date),
      (f)
      it is in full compliance with all covenants and agreements contained in each
      Loan Document to which it is a party, and (g) no Default or Event of Default
      has
      occurred and is continuing. 

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    4.  The
      representations and warranties made in this First Amendment shall survive the
      execution and delivery of this First Amendment. No investigation by Lender
      is
      required for Lender to rely on the representations and warranties in this First
      Amendment.

    


    5.  Scope
      of
      Amendment; Reaffirmation; Release. All references to the Credit Agreement shall
      refer to the Credit Agreement as amended by this First Amendment. Except as
      affected by this First Amendment, the Loan Documents are unchanged and continue
      in full force and effect. However, in the event of any inconsistency between
      the
      terms of the Credit Agreement (as amended by this First Amendment) and any
      other
      Loan Document, the terms of the Credit Agreement shall control and such other
      document shall be deemed to be amended to conform to the terms of the Credit
      Agreement. Borrower hereby reaffirms its obligations under the Loan Documents
      to
      which it is a party and agrees that all Loan Documents to which they are a
      party
      remain in full force and effect and continue to be legal, valid, and binding
      obligations enforceable in accordance with their terms (as the same are affected
      by this First Amendment). Borrower hereby releases Lender from any liability
      for
      actions or omissions in connection with the Credit Agreement and the other
      Loan
      Documents prior to the date of this First Amendment.

    


    6.  Miscellaneous.
      

    


    (a) No
      Waiver of Defaults.
      This
      First Amendment does not constitute (i) a waiver of, or a consent to, (A) any
      provision of the Credit Agreement or any other Loan Document not expressly
      referred to in this First Amendment, or (B) any present or future violation
      of,
      or default under, any provision of the Loan Documents, or (ii) a waiver of
      Lender’s right to insist upon future compliance with each term, covenant,
      condition and provision of the Loan Documents.

    


    (b) Form.
      Each
      agreement, document, instrument or other writing to be furnished Lender under
      any provision of this First Amendment must be in form and substance satisfactory
      to Lender and its counsel.

    


    (c)  Headings.
      The
      headings and captions used in this First Amendment are for convenience only
      and
      will not be deemed to limit, amplify or modify the terms of this First
      Amendment, the Credit Agreement, or the other Loan Documents.

    


    (d)  Costs,
      Expenses and Attorneys’ Fees.
      Borrower agrees to pay or reimburse Lender on demand for all its reasonable
      out-of-pocket costs and expenses incurred in connection with the preparation,
      negotiation, and execution of this First Amendment, including, without
      limitation, the reasonable fees and disbursements of Lender’s
      counsel.

    


    (e)  Successors
      and Assigns.
      This
      First Amendment shall be binding upon and inure to the benefit of each of the
      undersigned and their respective successors and permitted assigns.

    


    (f)  Multiple
      Counterparts.
      This
      First Amendment may be executed in any number of counterparts with the same
      effect as if all signatories had signed the same document. All counterparts
      must
      be construed together to constitute one and the same instrument. This First
      

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    (g)  Amendment
      may be transmitted and signed by facsimile or portable document format (PDF).
      The effectiveness of any such documents and signatures shall, subject to
      applicable law, have the same force and effect as manually-signed originals
      and
      shall be binding on Borrower and Lender. Lender may also require that any such
      documents and signatures be confirmed by a manually-signed original;
provided
      that the
      failure to request or deliver the same shall not limit the effectiveness of
      any
      facsimile or PDF document or signature.

    


    (h)  Governing
      Law.
      This
      First Amendment and the other Loan Documents must be construed, and their
      performance enforced, under Texas law.

    


    (i)  Arbitration.
      Upon
      the demand of any party to this First Amendment, any dispute shall be resolved
      by binding arbitration as provided for in Section
      12.1
      of the
      Credit Agreement.

    


    (j)  Entirety.
      The
      Loan Documents (as amended hereby) Represent the Final Agreement Between
      Borrower and Lender and May Not Be Contradicted by Evidence of Prior,
      Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No
      Unwritten Oral Agreements among the Parties.

    


    [Signatures
      appear on the next page.]

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    



    IN
      WITNESS WHEREOF, this First Amendment is executed as of the date first written
      above.

     

    


    BORROWER:

    


    RANCHER
      ENERGY CORP.,

    a
      Nevada
      corporation

    


    By:     
      /s/
      John
      Works                                      


    John
      Works

    President
      & Chief Executive Officer

    


     

    


    LENDER:

    


    GASROCK
      CAPITAL LLC,

    a
      Delaware limited liability company

    


    


    By:     
      /s/
      Marshall Lynn
      Bass                       
 

    Marshall
      Lynn Bass

    Principal

    


     

     

    
       

      
        
           

        

        
          
            Signature
              Page to the First Amendment to

            Term
              Credit Agreement

          

          
            

          

        

        
           

        

      



    GUARANTOR’S
      CONSENT AND AGREEMENT

    TO

    FIRST
      AMENDMENT TO TERM CREDIT AGREEMENT

     

    Guarantor
      executes this First Amendment for purposes of acknowledging and agreeing to
      the
      Credit Agreement, as amended by this First Amendment, and hereby expressly
      ratifies and confirms its liability under its Guaranty dated October 16, 2007
      executed in favor of Lender and confirms that such liability continues in full
      force and effect with respect to the indebtedness of Borrower covered by the
      Credit Agreement, as amended by this First Amendment, as same may be further
      restated, amended, modified, renewed, or rearranged from time to
      time.

     

    


     

    RANCHER
      ENERGY WYOMING, LLC

    a
      Wyoming
      limited liability company

    


    By:
      RANCHER
      ENERGY CORP.,
      

    its
      sole
      Manager

    


    


    By:     
      /s/
      John
      Works                                       

    John
      Works

    President
      & Chief Executive Officer