PROMISSORY NOTE

$195,314.30                                                   September 30, 2003
                                                            Knoxville, Tennessee

         FOR VALUE RECEIVED, the undersigned, National Coal Corporation, a
corporation organized and existing under the laws of the State of Tennessee with
a principal place of business at 319 Ebenezer Road, Knoxville, Tennessee 37923
(hereinafter referred to as "Borrower"), promises to pay to the order of Webb
Group Financial Services, Inc., a corporation organized and existing under the
laws of the State of North Carolina with a principal place of business at 1202-C
East Mountain Street, Kernersville, NC 27284 (hereinafter referred to as
"Lender"), or at such other place as the Lender may designate in writing
delivered or mailed to the Borrower, in lawful money of the United States in
immediately available funds, the principal amount of One Hundred Ninety Five
Thousand Three Hundred Fourteen and 30/00 Dollars ($195,314.30) plus interest
(computed on the basis of a year of 365 days) from the date of this Note on the
unpaid principal amount of this Note, in like money, at said office, at a rate
per annum equal to Twelve Percent (12%), said principal and interest being
payable as follows:

         On or before September 30, 2004 (the "Maturity Date"), the Borrower
shall pay a single payment of principal in the form of a check in the amount of
One Hundred Ninety Five Thousand Three Hundred Fourteen and 30/00 Dollars
($195,314.30) equal to the entire outstanding principal balance evidenced by
this Note, plus a second payment on said date in the form of another check of
all accrued and unpaid interest due as evidenced by this Note.

         Ten (10) days after default in the payment of any amount due pursuant
to this Note or ten (10) days after receipt of written notice of default, the
entire principal sum and accrued interest evidenced by this Note shall at once
become due and payable at the option of the Holder of this Note. Failure to
exercise this option shall not constitute a waiver of the right to exercise the
same in the event of any subsequent default.

         The Borrower of the funds evidenced by this Note may prepay the
principal amount of this Note plus interest at any time prior to the Maturity
Date without penalty upon five (5) business days written notice.

         Presentment for payment, demand, protest and notice of demand and
protest and all other notices are hereby waived by the Borrower. The Borrower
consents that the time of payment may be extended without notice thereof, and
guarantees payment of the same. No indulgences granted from time to time shall
be construed as a novation of this Note or as a reinstatement of the
indebtedness evidenced hereby or as a waiver of the right of the Lender
thereafter to insist upon strict compliance with the terms of this Note. This
Note may not be changed orally, but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought. If suit is instituted upon this Note, or if placed in the
hands of an attorney for collection, the Borrower promises to pay a reasonable
attorney's fee and all expenses of collection.

                                               Borrower:

                                               National Coal Corporation


                                               By: ____________________________
                                                   Jon E. Nix, President

Acknowledged:

Webb Group Financial Services, Inc.____________________________________


By: __________________________________
         Dr. Scott Hollenbeck, President






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