EXHIBIT 10.2

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                      SECOND AMENDMENT TO CREDIT AGREEMENT



                        EFFECTIVE AS OF DECEMBER 31, 2004



                                      among

                            NATIONAL COAL CORPORATION
                                  as Borrower,


                  D. B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.,
                            as Administrative Agent,


                                       AND




                            THE LENDERS PARTY HERETO










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<PAGE>


                      SECOND AMENDMENT TO CREDIT AGREEMENT

         This Second Amendment to Credit Agreement (this "SECOND  AMENDMENT") is
entered into on March 29,  2005,  but shall be effective as of December 31, 2004
(the "SECOND AMENDMENT EFFECTIVE DATE"), by and among National Coal Corporation,
a Tennessee corporation (the "BORROWER"),  each of the lenders from time to time
party hereto (the "LENDERS"), and D.B. Zwirn Special Opportunities Fund, L.P., a
Delaware limited  partnership (as administrative  agent for the Lenders, in such
capacity,  together with its  successors in such capacity,  the  "ADMINISTRATIVE
AGENT").

                                    RECITALS:

         A.       The  Borrower  entered  into a  Credit  Agreement  dated as of
November 26, 2004, among the Borrower, the Administrative Agent, and the Lenders
party thereto,  as amended by that certain First  Amendment to Credit  Agreement
dated January 11, 2005, among the Borrower,  the  Administrative  Agent, and the
Lenders party thereto (the "CREDIT AGREEMENT").

         B.       The Borrower has  requested  that  certain  provisions  of the
Credit Agreement be modified and amended.

         C.       The Borrower,  the Administrative  Agent, and the Lenders have
agreed to amend the  Credit  Agreement  on the  terms and  conditions  contained
herein.

                                   AGREEMENT:

         In  consideration  of the premises and the mutual  covenants  contained
herein  and  in  the  Credit   Agreement,   and  for  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

         SECTION 1. TERMS DEFINED IN THE CREDIT AGREEMENT.  Each term defined in
the Credit  Agreement  (as amended  hereby) and used herein  without  definition
shall have the  meaning  assigned to such term in the Credit  Agreement,  unless
expressly provided to the contrary.  Unless otherwise indicated, all section and
article references in this Second Amendment refer to the Credit Agreement.

         SECTION 2.  AMENDMENTS  TO THE CREDIT  AGREEMENT.  Section 10.01 of the
Credit  Agreement  is hereby  amended and  restated  in its  entirety to read as
follows:

         Section 10.01 FINANCIAL COVENANTS. Except as otherwise provided each of
the following  covenants  using an EBITDA  component  shall be calculated by (i)
using actual  EBITDA for the fourth  calendar  quarter of 2004,  (ii) adding the
actual EBITDA for each calendar quarter thereafter until a full four quarters is
established and (iii) for each period  thereafter using a trailing four quarters
of actual EBITDA.


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<PAGE>


                  (a)      MINIMUM EBITDA.  Parent will not, at any time, permit
         its EBITDA as of the last day of any period set forth  below to be less
         than the amount set forth below opposite such period:

                       PERIOD                                          AMOUNT
-------------------------------------------------------------      -------------
Three month period ending December 31, 2004                         ($1,603,110)
Three month period ending March 31, 2005                               $110,000
Six month period ending June 30, 2005                                $2,250,000
Nine month period ending September 30, 2005                          $6,500,000
Four consecutive quarters ending December 31, 2005                  $11,000,000
Four consecutive quarters ending March 31, 2006                     $16,000,000
Four consecutive quarters ending June 30, 2006 and thereafter       $18,000,000

                  (b)      RATIO OF CERTAIN DEBT TO EBITDA.  Parent will not, at
         any time,  permit its ratio of (i) the sum of (A) Indebtedness plus (B)
         all obligations of Parent,  Borrower and their  Subsidiaries  under the
         Debt set forth as items 4, 5, 6 and 7 on Schedule 10.02 and any and all
         renewals,  extensions and  rearrangements  thereof to (ii) EBITDA as of
         the last day of any period set forth below to be greater than the ratio
         set forth below opposite such period:

                       PERIOD                                          RATIO
-------------------------------------------------------------       ----------
*Three month period December 31, 2004                               applicable
*Three month period ending March 31, 2005                           applicable
*Six month period ending June 30, 2005                                6.0:1.00
Nine month period ending September 30, 2005                           3.4:1.00
Four consecutive quarters ending December 31, 2005                    2.5:1.00
Four consecutive quarters ending March 31, 2006                       2.0:1.00
Four consecutive quarters ending June 30, 2006 and thereafter         2.0:1.00
----------
*EBITDA for such period to be annualized  based on available three, six and nine
month periods.


                  (c)      RATIO OF EBITDA TO  INTEREST.  Parent will not permit
         Parent's  ratio of EBITDA to  Consolidated  Interest  Expense as of the
         last day of any  period  set forth  below to be less than the ratio set
         forth below opposite such period.

                       PERIOD                                          RATIO
-------------------------------------------------------------     --------------
Three month period ending December 31, 2004                       Not applicable
Three month period ending March 31, 2005                          Not applicable
Six month period ending June 30, 2005                                   1.5:1.00
Nine month period ending September 30, 2005                             3.0:1.00
Four consecutive quarters ending December 31, 2005                      3.5:1.00
Four consecutive quarters ending March 31, 2006                         3.5:1.00
Four consecutive quarters ending June 30, 2006 and thereafter           3.5:1.00


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<PAGE>


                  (d)      FIXED CHARGE COVERAGE  RATIO.  Parent will not permit
         the Fixed  Charge  Coverage  Ratio of the Parent  and its  Consolidated
         Subsidiaries  as of the last day of each fiscal quarter to be less than
         the ratio set forth below opposite such period.

                       PERIOD                                          RATIO
-------------------------------------------------------------     --------------
Three month period ending March 31, 2005                          Not applicable
Six month period ending June 30, 2005                                   0.4:1.00
Nine month period ending September 30, 2005                             0.9:1.00
Four consecutive quarters ending December 31, 2005                      1.3:1.00
Four consecutive quarters ending March 31, 2006                         1.8:1.00
Four consecutive quarters ending June 30, 2006 and thereafter           2.0:1.00


                  (e)      SALES  VOLUME.  The Parent and the Borrower  will not
         permit,  as of the last day of any period set forth  below the sales of
         Coal  volume  from the Coal  Properties  to be less than the amount set
         forth opposite such period.

                                                                     PRODUCTION
                       PERIOD                                           (TONS)
-------------------------------------------------------------        -----------
Three month period ending March 31, 2005                               203,697
Six month period ending June 30, 2005                                  270,725
Nine month period ending September 30, 2005                            359,975
Four consecutive quarters ending December 31, 2005                     364,225
Four consecutive quarters ending March 31, 2006                        355,725
Four consecutive quarters ending June 30, 2006 and thereafter          355,725


         SECTION 3. Section 10.04 of the Credit  Agreement is hereby amended and
restated in its entirety to read as follows:

         Section  10.04  RESTRICTED  PAYMENTS.  Neither  Parent nor the Borrower
will,  nor permit any of its  Subsidiaries  to, (i) declare or make, or agree to
pay or make, directly or indirectly,  any Restricted Payment, return any capital
to its  stockholders  or make any  distribution  of its  Property  to its Equity
Interest  holders,  (ii) make any payment to retire,  or to obtain the surrender
of, any  outstanding  warrants,  options or other  rights  for the  purchase  or
acquisition  of  shares of any  Equity  Interests  of  Parent,  Borrower  or any
Subsidiary,  now or hereafter  outstanding  or (iii) other than  payments  under
employment agreements in existence on the Effective Date and which are set forth
on  Schedule  10.04,  pay any  management  fees or any  other  fees or  expenses
(including  the  reimbursement  thereof  by  Parent,  Borrower  or any of  their
Subsidiaries) pursuant to any management, consulting or other services agreement
to any Affiliates of the Borrower  (excluding any  Subsidiaries of the Borrower)
or (iv)  increase  the total  compensation  paid or payable to the  officers and
directors  of the Parent,  Borrower and their  Subsidiaries  taken as a whole by
more than five percent (5%) per annum in excess of the total  compensation  paid
for the twelve month period ending on October 31, 2004;  provided,  however, (A)
any  Subsidiary  may pay  dividends  to the  Borrower,  (B) the  Parent  may pay
dividends in the form of common  stock,  provided  that no such payment shall be
made if an Event of  Default  shall have  occurred  and be  continuing  or would
result  from the  making  of any such  payment,  (C) the  exercise  price of any
options, interests or other rights to purchase common stock of the Parent may be
paid in common stock of


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<PAGE>


the Parent,  (D) any  Subsidiary  may make any  payment or  transfer  any of its
property to Borrower  upon 15 days prior  written  notice to the  Administrative
Agent and subject to Liens in favor of the  Administrative  Agent,  if any,  (E)
Parent  may pay up to  $25,000  per  year in  compensation  to a total  of three
outside  directors  and an  additional  $25,000  per  director  per year to such
directors if such  directors  are the  chairperson  on a committee of the Board,
(such payments to be made in twelve equal monthly  installments) and (F) so long
as no Event of  Default  has  occurred  or is  continuing,  Parent  may pay cash
dividends  in respect of its Series A Preferred  Stock as currently in effect on
the Effective Date.  Notwithstanding the preceding, the Parent shall be entitled
to pay a total of three outside  directors a single one-time  payment of $25,000
per outside director on or before April 1, 2005.

         SECTION 4. Section 10.21 of the Credit  Agreement is hereby amended and
restated in its entirety to read as follows:

         Section 10.21  G&A COSTS.  Without  the prior  consent  of the  Lenders
neither the Parent nor Borrower  shall incur and,  shall not permit any of their
Subsidiaries to incur General and  Administrative  Costs  (excluding  Borrower's
reasonable  insurance  expenses)  on an  annualized  basis  as of the end of any
period  set  forth  below in  excess of an  amount  equal to the  percentage  of
proceeds from the sale of Coal from Parents',  Borrowers' and their subsidiaries
Coal properties for the periods indicated in the table below.

                                                                    PERCENTAGE
                                                                  OF ANNUALIZED
                                                                  SALES PROCEEDS
                                                                     OF COAL
                                                                    FROM COAL
                       PERIOD                                       PROPERTIES
-------------------------------------------------------------     --------------
Three month period ending March 31, 2005                               7.3%
Six month period ending June 30, 2005                                  6.3%
Nine month period ending September 30, 2005                            5.5%
Four consecutive quarters ending December 31, 2005                     5.0%
Four consecutive quarters ending March 31, 2006                        5.0%
Four consecutive quarters ending June 30, 2006 and thereafter          5.0%


         SECTION 5.  LIMITATIONS.  The  amendments  set forth herein are limited
precisely as written and shall not (a) be deemed to be a consent to, or a waiver
or modification  of, any other term or condition of the Credit  Agreement or (b)
prejudice  any right or rights which the Lenders may now have or may have in the
future  under or in  connection  with the Credit  Agreement  or any of the other
documents  or  instruments  referred to therein.  Except as  expressly  modified
hereby or by express written amendments  thereof,  the Credit Agreement and each
of the other  documents and  instruments  executed in connection with any of the
foregoing  are and shall  remain in full  force  and  effect.  In the event of a
conflict between this Second Amendment and any of the foregoing  documents,  the
terms of this Second Amendment shall be controlling.

         SECTION 6. ADOPTION, RATIFICATION AND CONFIRMATION OF CREDIT AGREEMENT.
The Borrower  hereby  adopts,  ratifies and  confirms the Credit  Agreement,  as
amended  hereby,  and  acknowledges  and agrees  that the Credit  Agreement,  as
amended hereby, is and remains in full force and effect.


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<PAGE>


         SECTION 7.  GOVERNING  LAW.  THIS SECOND  AMENDMENT  AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES  HEREUNDER  SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

         SECTION 8. DESCRIPTIVE  HEADINGS,  ETC. The descriptive headings of the
several  sections of this Second Amendment are inserted for convenience only and
shall  not be  deemed  to  affect  the  meaning  or  construction  of any of the
provisions hereof.

         SECTION 9. ENTIRE  AGREEMENT.  This Second  Amendment and the documents
referred to herein  represent  the entire  understanding  of the parties  hereto
regarding the subject matter hereof and supersede all prior and  contemporaneous
oral and written  agreements  of the parties  hereto with respect to the subject
matter hereof.

         SECTION  10.   AMENDMENT  FEE.  The  Borrower  agrees  to  pay  to  the
Administrative  Agent  and the  Lenders  as of the date of  execution  hereof an
amendment fee of  $120,000.00  in  connection  with the execution of this Second
Amendment.

         SECTION 11. COUNTERPARTS.  This Second Amendment may be executed in any
number of  counterparts  (including  by telecopy)  and by  different  parties on
separate counterparts and all of such counterparts shall together constitute one
and the same instrument.

         In  witness  whereof,  the  parties  hereto  have  caused  this  Second
Amendment to be duly executed and delivered by their  respective duly authorized
officers as of the Second Amendment Effective Date.

                          [SIGNATURES BEGIN NEXT PAGE]


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<PAGE>


BORROWER:                          NATIONAL COAL CORPORATION


                                   By:               /S/ JON E. NIX
                                      ------------------------------------------
                                   Name:             JON E. NIX
                                        ----------------------------------------
                                   Title:            CHIEF EXECUTIVE OFFICER
                                         ---------------------------------------


                                   Address:     National Coal Corporation
                                                8915 George Williams Road
                                                Knoxville, TN  37923
                                                Telecopier No.:  (865) 691-9982
                                                Telephone No.:  (865) 690-6900
                                                Attention:  Jon Nix


            [Signature Page to Second Amendment to Credit Agreement]
                                       S-1
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ADMINISTRATIVE AGENT:              D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.


                                   By:     D.B. Zwirn Partners, LLC, its general
                                           partner


                                   By:             /S/ PERRY A. GRUSS
                                            ------------------------------------
                                   Name:             PERRY A. GRUSS
                                            ------------------------------------
                                   Title:            CHIEF FINANCIAL OFFICER
                                            -----------------------------------


                                   Address: 745 5th Avenue, 18th Floor
                                            New York, New York  10151
                                            Attention:   Morris W. Macleod
                                            Telecopy:   (646) 720-9039


            [Signature Page to Second Amendment to Credit Agreement]
                                       S-2
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LENDER:                            D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.


                                    By:    D.B. Zwirn Partners, LLC, its general
                                           partner


                                    By:             /S/ PERRY A. GRUSS
                                             -----------------------------------
                                    Name:             PERRY A. GRUSS
                                             -----------------------------------
                                    Title:            CHIEF FINANCIAL OFFICER
                                             -----------------------------------


                                    Address: 745 5th Avenue, 18th Floor
                                             New York, New York  10151
                                             Attention:   Morris W. Macleod
                                             Telecopy:   (646) 720-9039


            [Signature Page to Second Amendment to Credit Agreement]
                                       S-3