EXHIBIT 10.1

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                       FIRST AMENDMENT TO CREDIT AGREEMENT



                        EFFECTIVE AS OF JANUARY 11, 2005



                                      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>


                       FIRST AMENDMENT TO CREDIT AGREEMENT

         This First Amendment to Credit Agreement (this "FIRST AMENDMENT") dated
as of January 11, 2005 (the "FIRST AMENDMENT  EFFECTIVE  DATE"), is by and among
National Coal Corporation, a Tennessee corporation (the "BORROWER"), each of the
lenders  from  time to time  party  hereto  ("Lenders"),  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 (the "CREDIT AGREEMENT"),  among the Borrower,  Administrative
Agent and the Lenders party thereto.

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

         C.       The Borrower, the Collateral 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 First Amendment refer to the Credit Agreement.

         SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT.

                  (a)      NEW SECTION 2.06(b)(iv). A new Section 2.06(b)(iv) is
         hereby added to the Credit Agreement after Section  2.06(b)(iii) as set
         forth below:

                           (iv)     fund working capital needs of the Borrower.

                  In light of the new Section  2.06(b)(iv)  the "and" at the end
         of Section  2.06(b)(ii) is deleted and the period at the end of Section
         2.06(b)(iii)  is deleted and replaced  with a  semi-colon  and the word
         "and" after the semi-colon.


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         SECTION 3.  CONDITIONS.  The  following is added as Section 7.06 of the
Credit Agreement:

                  Section 6.03. CONDITIONS TO FIRST AMENDMENT. The obligation of
         the Lenders to make the  initial  advance  pursuant  to this  Agreement
         after  January  11,  2005  is  subject  to  the  following   conditions
         precedent,  in addition to those set forth in Sections 7.02 and 7.03 of
         the Agreement:

                           (a)      DUE  DILIGENCE.   The  Administrative  Agent
                  shall be satisfied that Borrower has granted to Administrative
                  Agent for the benefit of the Lenders and itself a valid, first
                  priority perfected lien on all of the Properties that Borrower
                  acquires  in  connection   with  any   Subsequent   Commitment
                  Increase.

                           (b)      OTHER     SECURITY     INSTRUMENTS.      The
                  Administrative  Agent shall have  received  such  instruments,
                  each duly and validly executed and delivered by the respective
                  parties thereto,  and in sufficient executed  counterparts for
                  recording purposes when applicable,  such security agreements,
                  financing    statements,    or   titles   duly   endorsed   to
                  Administrative  Agent as  Administrative  Agent may request in
                  order  to  perfect  the  security   interest  in  all  of  the
                  Properties  that  Borrower  acquires  in  connection  with any
                  Subsequent Commitment Increase.

         SECTION 4.  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 First Amendment and any of the foregoing  documents,  the
terms of this First Amendment shall be controlling.

         SECTION 5. 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.

         SECTION 6.  GOVERNING  LAW.   THIS FIRST  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 7. DESCRIPTIVE  HEADINGS,  ETC. The descriptive headings of the
several  sections of this First Amendment are inserted for convenience  only and
shall  not be  deemed  to  affect  the  meaning  or  construction  of any of the
provisions hereof.

         SECTION 8. ENTIRE  AGREEMENT.  This First  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.


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         SECTION 9.  COUNTERPARTS.  This First  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 First Amendment
to be duly executed and delivered by their  respective duly authorized  officers
as of the First Amendment Effective Date.

                          [SIGNATURES BEGIN NEXT PAGE]


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The parties  hereto have caused this Agreement to be duly executed as of the day
and year first above written.

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 First 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/ DANIEL B. ZWIRN
                                     -------------------------------------------
                                  Name:             DANIEL B. ZWIRN
                                       -----------------------------------------
                                  Title:            MANAGING MEMBER
                                        ----------------------------------------

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


             [Signature Page to First 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/ DANIEL B. ZWIRN
                                     -------------------------------------------
                                  Name:             DANIEL B. ZWIRN
                                       -----------------------------------------
                                  Title:            MANAGING MEMBER
                                        ----------------------------------------

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


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