Document:

Exhibit 4.1

       CERTIFICATE OF DESIGNATIONS ESTABLISHING THE DESIGNATIONS, POWERS,
         PREFERENCES, LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF
                    SERIES A CONVERTIBLE PREFERRED STOCK OF
                          ASSURANCEAMERICA CORPORATION

      AssuranceAmerica Corporation, a Nevada corporation (the "Corporation"),
does hereby certify that pursuant to authority conferred upon the Board of
Directors of the Corporation by its Amended and Restated Articles of
Incorporation, the following resolution establishing the Corporation's Series A
Convertible Preferred Stock was duly adopted by the Board of Directors, on June
15, 2004, and such resolution remains in full force and effect:

            RESOLVED, that pursuant to the authority expressly granted to and
      vested in the Board of Directors of the Corporation by the Corporation's
      Amended and Restated Articles of Incorporation, as amended (the "Articles
      of Incorporation"), and pursuant to Chapter 78 of the Nevada Revised
      Statutes, there be established from the 5,000,000 shares of Preferred
      Stock, $0.01 par value, of the Corporation, authorized to be issued
      pursuant to the Articles of Incorporation, a series of Preferred Stock,
      consisting of 600,000 shares of Series A Convertible Preferred Stock,
      having the designations, powers, preferences and relative and other
      special rights and the qualifications, limitations and restrictions as
      follows:

      1 Designation and Number of Shares. The series shall be known as the
"Series A Convertible Preferred Stock" (the "Series A Preferred Stock") and
shall consist of 600,000 shares of the authorized but unissued convertible
preferred stock of the Corporation.

      2 Dividends.

            (a) Subject to subparagraph 5(f), holders of outstanding shares of
Series A Preferred Stock shall be entitled to receive, out of funds legally
available therefor, prior and in preference to any declaration or payment of any
dividend on the Corporation's common stock (the "Common Stock"), a semi-annual
cash dividend of $0.20 on each share of Series A Preferred Stock, payable in
arrears on June 30 and December 31 of each year (each a "Dividend Payment
Date"), beginning December 31, 2004. Such dividends shall accrue, whether or not
declared, on a daily basis from the date of issuance of the Series A Preferred
Stock. In the event that the Corporation elects to adjust the Conversion Price,
as defined below, of the Series A Preferred Stock on any Dividend Payment Date
as provided in subparagraph 5(f) in lieu of paying the cash dividend then due,
such dividends shall be deemed paid in full and shall not accumulate. If
dividends are not paid in full in cash and the Conversion Price is not adjusted
as provided in subparagraph 5(f), dividends will accumulate. Any accumulation of
dividends on the Series A Preferred Stock shall not bear interest. Subject to
subparagraph 5(a), cumulative dividends with respect to a share of Series A
Preferred Stock that are accrued and payable shall, upon conversion of such
share to Common Stock, not then or thereafter be paid and shall cease to be
accrued and payable.

            (b) The holders of the Series A Preferred Stock shall be entitled to
participate with the holders of Common Stock in any dividends paid or set aside
for payment (other than dividends payable solely in shares of Common Stock) so
that holders of the Series A Preferred Stock shall receive with respect to each
share of Series A Preferred Stock an amount equal to: (x) the dividend payable
with respect to each share of Common Stock, multiplied by (y) the number of
shares (and fraction of a share, if any) of Common Stock into which such share
of Series A Preferred Stock is convertible as of the record date for such
dividend.

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      3 Liquidation Preference.

            (a) Preference.

                  (i) In the event of any liquidation, dissolution or winding up
      of the Corporation, either voluntarily or involuntarily, or a
      consolidation or merger of the Corporation into any other corporation in
      which more than fifty percent (50%) of the voting power of the Corporation
      is disposed of, or a sale, conveyance or disposition of all or
      substantially all of the assets of the Corporation (collectively, a
      "Liquidation Event"), the holders of the Series A Preferred Stock shall be
      entitled to receive prior and in preference to any distribution of any of
      the assets or surplus funds of the Corporation to the holders of Common
      Stock or additional series of the Corporation's preferred stock, an amount
      equal to: (A) the consideration per share paid for such Series A Preferred
      Stock, which is equal to $5.00 per share; plus (B) a further amount equal
      to any dividends declared or accrued but unpaid on such shares. If, upon
      such Liquidation Event, the assets of the Corporation available for
      distribution to the shareholders of the Corporation are insufficient to
      provide for the payment of the full aforesaid preferential amount, such
      assets as are so available shall be distributed among the holders of the
      Series A Preferred Stock in proportion to the relative aggregate
      liquidation preferences of the Series A Preferred Stock so held.

                  (ii) After the payment or the setting apart for payment to the
      holders of the Series A Preferred Stock of the preferential amounts so
      payable to them, if assets remain in the Corporation, the holders of the
      Common Stock shall receive all of the remaining assets of the Corporation
      pro rata in accordance with the number of shares of Common Stock held by
      them.

                  (iii) All amounts per share set forth in this subparagraph
      3(a) shall be appropriately adjusted for any stock splits, stock
      combinations, stock dividends or similar recapitalizations.

            (b) Noncash Distributions. If any of the assets of the Corporation
are to be distributed other than in cash under this paragraph 3 or for any
purpose, then the Board of Directors of the Corporation shall promptly engage
independent competent appraisers to determine the value of the assets to be
distributed to the holders of Series A Preferred Stock or Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Series A Preferred Stock or Common
Stock of the appraiser's valuation.

      4 Voting Rights. Holders of shares of Series A Preferred Stock shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which each share of Series A Preferred Stock could be converted on the
record date for the vote or written consent of shareholders and, except as
otherwise required by law, shall have voting rights and powers equal to the
voting rights and powers of the Common Stock. Holders of shares of Series A
Preferred Stock shall be entitled to notice of any shareholders' meeting in
accordance with the Amended and Restated Bylaws of the Corporation and shall
vote with holders of the Common Stock upon all other matters submitted to a vote
of shareholders, except those matters required to be submitted to a class or
series vote by law. Fractional votes shall not, however, be permitted and any
fractional voting rights resulting from the above formula (after aggregating all
shares of Common Stock into which shares of Series A Preferred Stock held by
each holder could be converted) shall be rounded to the nearest whole number
(with one-half rounded upward to one).

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      5 Conversion. The Series A Preferred Stock shall be convertible into
Common Stock, as follows:

            (a) Right to Convert. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance of such share at the office of the Corporation. Each share of Series
A Preferred Stock shall be convertible into the number of shares of Common Stock
which results from dividing the "Conversion Value" per share by the "Conversion
Price" per share in effect at the time of conversion. The number of shares of
Common Stock into which a share of Series A Preferred Stock is convertible is
hereinafter referred to as the "Conversion Rate." The Conversion Price per share
of Series A Preferred Stock (the "Conversion Price") initially in effect shall
be $0.50 and the Conversion Value per share of Series A Preferred Stock
initially in effect shall be equal to the consideration paid for such Series A
Preferred Stock, which is equal to $5.00 per share. The initial Conversion Price
of Series A Preferred Stock shall be subject to adjustment as hereinafter
provided. In addition, all accrued and unpaid dividends owed to a holder of
Series A Preferred Stock may be converted into a number of shares of Common
Stock equal to the aggregate amount of such accrued but unpaid dividends owed
such holder, divided by $0.50.

            (b) Automatic Conversion.

                  (i) Each share of Series A Preferred Stock shall automatically
      convert into shares of Common Stock at its then effective Conversion Rate
      on June 28, 2006.

                  (ii) Each share of Series A Preferred Stock shall
      automatically convert into shares of Common Stock at its then effective
      Conversion Rate immediately prior to the closing of any public offering
      pursuant to an effective registration statement under the Securities Act
      of 1933, as amended, covering any of the Corporation's equity securities
      with aggregate proceeds to the Corporation, at the public offering price,
      of at least $20,000,000, before underwriting commissions and expenses, and
      at a per share price of at least three times the then-current Conversion
      Price.

            (c) Mechanics of Conversion. Before any holder of Series A Preferred
      Stock shall be entitled to convert the same into shares of Common Stock as
      provided in subparagraph 5(a), such holder shall surrender the certificate
      or certificates therefor, duly endorsed, at the office of the Corporation
      and shall give written notice to the Corporation at such office that such
      holder elects to convert the same. The Corporation shall, as soon as
      practicable thereafter, issue and deliver at such office to such holder of
      Series A Preferred Stock a certificate or certificates for the number of
      shares of Common Stock to which such holder shall be entitled as
      aforesaid. Such conversion shall be deemed to have been made immediately
      prior to the close of business on the date of such surrender of the shares
      of Series A Preferred Stock to be converted, and the person or persons
      entitled to receive the shares of Common Stock issuable upon such
      conversion shall be treated for all purposes as the record holder or
      holders of such shares of Common Stock on such date.

            In the event of an automatic conversion pursuant to subparagraph
5(b), the outstanding shares of Series A Preferred Stock shall convert
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation; provided, however, that the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
automatic conversion unless the certificates evidencing such shares of Series A
Preferred Stock are either delivered to the Corporation as provided above, or
the holder notifies the Corporation that such certificates have been

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lost, stolen or destroyed, and executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. The Corporation shall, as soon as practicable
after such delivery, or such agreement and indemnification in the case of a lost
certificate, issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid.

            (d) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. Any shareholder entitled
to a fractional share of Common Stock upon such conversion shall be issued one
whole share of Common Stock in lieu of such fractional share.

            (e) Adjustment of Conversion Price. The Conversion Price of the
Series A Preferred Stock shall be subject to adjustment from time to time as
follows:

                  (i) If the Corporation shall issue any Common Stock or other
      securities of the Corporation convertible into or exchangeable for Common
      Stock (other than "Excluded Stock," as defined in subparagraph 5(e)(ii),
      or stock dividends, subdivisions, split-ups, combinations or dividends,
      which such events are governed by subparagraphs 5(e)(iv), (v) and (vi))
      for consideration per share less than the Conversion Price in effect
      immediately prior to such issuance, then the Conversion Price shall
      forthwith be decreased immediately after such issuance to a price equal to
      the quotient obtained by dividing:

                        (A) an amount equal to the sum of: (I) the total number
            of shares of Common Stock outstanding (including any shares of
            Common Stock deemed to have been issued pursuant to subparagraph
            5(e)(iii)(C)) immediately prior to such issuance multiplied by the
            Conversion Price in effect immediately prior to such issuance; plus
            (II) the consideration received by the Corporation upon such
            issuance, by

                        (B) the total number of shares of Common Stock
            outstanding (including any shares of Common Stock deemed to have
            been issued pursuant to subparagraph 5(e)(iii)(C)) immediately after
            such issuance.

                  (ii) "Excluded Stock" shall mean:

                        (A) all shares of Common Stock issued and outstanding on
            the date this Certificate of Designations is filed with the Nevada
            Secretary of State;

                        (B) all shares of Common Stock into which shares of
            Series A Preferred Stock and any other subsequent series of
            preferred stock are convertible;

                        (C) any and all shares of Common Stock that may be
            issuable pursuant to equity-based compensation plans approved by the
            Board of Directors of the Corporation prior to the date hereof
            (collectively, "Prior Plans");

                        (D) any and all shares of Common Stock that may be
            issuable pursuant to: (I) any amendment to any Prior Plan after the
            date hereof that increases the number of shares of Common Stock that
            may be issued under such Prior Plan and (II) equity-based
            compensation plans approved by the Board of Directors of the

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            Corporation after the date hereof; provided, however, that the
            shares of Common Stock described in this subparagraph 5(e)(ii)(D)
            shall only be deemed "Excluded Stock" to the extent that such shares
            of Common Stock, together with all shares of Common Stock described
            in subparagraph 5(e)(ii)(C), constitute less than twelve percent
            (12%) of all outstanding shares of the Corporation's capital stock,
            calculated on a fully-diluted basis and assuming the conversion to
            Common Stock of all then-outstanding shares of Series A Preferred
            Stock and any other series of convertible preferred stock of the
            Corporation; and

                        (E) all shares of Common Stock or other securities
            (including options, warrants and other purchase rights) issued or to
            be issued after receipt of written consent to such issuance from the
            holders of at least two-thirds (66.67%) of the then-outstanding
            shares of Series A Preferred Stock and approval of such issuance by
            the Board of Directors of the Corporation (including the affirmative
            vote of the directors appointed by the holders of the Series A
            Preferred Stock).

            (iii) For purposes of making any such calculation pursuant to
      subparagraph 5(e)(i), any other shares of Common Stock deemed issued and
      outstanding pursuant to subparagraph 5(e)(i), shall be deemed issued and
      outstanding at all times. For the purposes of subparagraph 5(e)(i), the
      following provisions shall also be applicable (all references to "Common
      Stock" in this subparagraph 5(e)(iii) shall also include other securities
      of the Corporation convertible into or exchangeable for Common Stock
      (other than "Excluded Stock," as defined in subparagraph 5(e)(ii), or
      stock dividends, subdivisions, split-ups, combinations or dividends, which
      such events are governed by subparagraphs 5(e)(iv), (v) and (vi)):

                        (A) In the case of the issuance of Common Stock for
            cash, the consideration received therefor shall be deemed to be the
            amount of cash paid therefor without deducting any discounts or
            commissions paid or incurred by the Corporation in connection with
            the issuance and sale thereof.

                        (B) In the case of the issuance of Common Stock for
            consideration in whole or in part other than cash, the consideration
            other than cash shall be deemed to be the fair value thereof as
            determined in good faith by the Board of Directors of the
            Corporation.

                        (C) In the case of the issuance of: (x) options to
            purchase or rights to subscribe for Common Stock; (y) securities by
            their terms convertible or exchangeable for Common Stock; or (z)
            options to purchase or rights to subscribe for such convertible or
            exchangeable securities:

                              (I) The aggregate maximum number of shares of
                  Common Stock deliverable upon exercise of such options to
                  purchase or rights to subscribe for Common Stock shall be
                  deemed to be issuable for a consideration equal to the
                  consideration (determined in the manner provided in
                  subparagraphs 5(e)(iii)(A) and (B) above), if any, received by
                  the Corporation upon the issuance of such options or rights
                  plus the minimum purchase price provided in such options or
                  rights for the Common Stock covered thereby;

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                              (II) The aggregate maximum number of shares of
                  Common Stock deliverable upon conversion of or in exchange for
                  any such convertible or exchangeable securities, or upon the
                  exercise of options to purchase or rights to subscribe for
                  such convertible or exchangeable securities and subsequent
                  conversion or exchange thereof, shall be deemed to be issuable
                  for a consideration equal to the consideration received by the
                  Corporation for any such securities and related options or
                  rights, plus the additional consideration, if any, to be
                  received by the Corporation upon the conversion or exchange of
                  such securities or the exercise of any related options or
                  rights (the consideration in each case to be determined in the
                  manner provided in subparagraphs 5(e)(iii)(A) and (B) above));

                              (III) The aggregate maximum number of shares of
                  Common Stock deliverable upon exercise of such options or
                  rights or upon conversion of or in exchange for such
                  convertible or exchangeable securities upon the exercise of
                  options to purchase or rights to subscribe for such
                  convertible or exchangeable securities and subsequent
                  conversion or exchange thereof, shall be deemed to have been
                  issued at the time such options or rights or securities were
                  issued, provided that the consideration for which such Common
                  Stock is deemed to be issuable does not exceed the issuance
                  price of securities issued in the latest bona fide round of
                  financing by the Corporation;

                              (IV) On any change in the number of shares of
                  Common Stock deliverable upon exercise of any such options or
                  rights or conversion of or exchange for such convertible or
                  exchangeable securities, or on any change in the minimum
                  purchase price of such options, rights or securities, other
                  than a change resulting from any anti-dilution provisions of
                  such options, rights or securities, the Conversion Price shall
                  forthwith be readjusted to such Conversion Price as would have
                  been obtained had the adjustment (and any subsequent
                  adjustments) made upon: (X) the issuance of such options,
                  rights or securities not exercised, converted or exchanged
                  prior to such change, as the case may be, been made upon the
                  basis of such change; or (Y) the options or rights related to
                  such securities not converted or exchanged prior to such
                  change, as the case may be, been made upon the basis of such
                  change; and

                              (V) On the expiration of any such options or
                  rights, the termination of any such rights to convert or
                  exchange or the expiration of any options or rights related to
                  such convertible or exchangeable securities, the Conversion
                  Price shall forthwith be readjusted to such Conversion Price
                  as would have obtained had the adjustment (and any subsequent
                  adjustments) made upon the issuance of such options, rights,
                  convertible or exchangeable securities or options or rights
                  related to such convertible or exchangeable securities, as the
                  case may be, been made upon the basis of the issuance of only
                  the number of shares of Common Stock actually issued upon the
                  exercise of such options or rights, upon the conversion or
                  exchange of such convertible or exchangeable securities or
                  upon the exercise of the options or rights related to such
                  convertible or exchangeable securities, as the case may be.

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                  (iv) If the number of shares of Common Stock outstanding at
      any time after the date hereof is increased by a stock dividend payable in
      shares of Common Stock or by a subdivision or split-up of shares of Common
      Stock, then, on the date such payment is made or such change is effective,
      the Conversion Price shall be appropriately decreased so that the number
      of shares of Common Stock issuable on conversion of the Series A Preferred
      Stock shall be increased in proportion to such increase of outstanding
      shares.

                  (v) If the number of shares of Common Stock outstanding at any
      time after the date hereof is decreased by a combination of the
      outstanding shares of Common Stock, then, on the effective date of such
      combination, the Conversion Price shall be appropriately increased so that
      the number of shares of Common Stock issuable on conversion of the Series
      A Preferred Stock shall be decreased in proportion to such decrease in
      outstanding shares.

                  (vi) In the event that the Corporation shall declare a cash
      dividend upon the Common Stock payable otherwise than out of retained
      earnings or shall distribute to holders of its Common Stock shares of its
      capital stock (other than Common Stock), stock or other securities of
      other persons, evidences of indebtedness issued by the Corporation or
      other persons, assets (excluding cash dividends) or options or rights
      (excluding options to purchase and rights to subscribe for Common Stock or
      other securities of the Corporation convertible into or exchangeable for
      Common Stock), then, in such case, the holders of shares of Series A
      Preferred Stock shall, concurrent with the distribution to holders of
      Common Stock, receive a like distribution based upon the number of shares
      of Common Stock into which such Series A Preferred Stock is then
      convertible.

                  (vii) In the event, at any time after the date hereof, of any
      capital reorganization, or any reclassification of the stock of the
      Corporation (other than a change in par value or as a result of a stock
      dividend or subdivision, split-up or combination of shares), or the
      consolidation or merger of the Corporation with or into another person
      (other than a consolidation or merger in which the Corporation is the
      continuing entity and which does not result in any change in the Common
      Stock), or of the sale or other disposition of all or substantially all
      the properties and assets of the Corporation as an entirety to any other
      person, the shares of Series A Preferred Stock shall, after such
      reorganization, reclassification, consolidation, merger, sale or other
      disposition, be convertible into the kind and number of shares of stock or
      other securities or property of the Corporation or of the entity resulting
      from such consolidation or surviving such merger or to which such
      properties and assets shall have been sold or otherwise disposed to which
      such holder would have been entitled if immediately prior to such
      reorganization, reclassification, consolidation, merger, sale or other
      disposition he had converted his shares of Series A Preferred Stock into
      Common Stock. The provisions of this subparagraph 5(e)(vii) shall
      similarly apply to successive reorganizations, reclassifications,
      consolidations, mergers, sales or other dispositions.

                  (viii) All calculations under this paragraph 5 shall be made
      to the nearest cent or to the nearest one hundredth (1/100) of a share, as
      the case may be.

            (f) Adjustment of Conversion Price in Lieu of Dividend.
Notwithstanding anything herein to the contrary, in lieu of, and not in addition
to, paying the cash dividend described in subparagraph 2(a) on a Dividend
Payment Date, in its sole discretion, the Corporation may adjust

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the Conversion Price of the Series A Preferred Stock on a Dividend Payment Date
by dividing the then-current Conversion Price by 1.04.

            (g) Minimal Adjustments. No adjustment in a Conversion Price need be
made if such adjustment would result in a change in a Conversion Price of less
than $0.01. Any adjustment of less than $0.01 which is not made shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or
more in a Conversion Price.

            (h) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of a Conversion Price pursuant to this paragraph 5,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon written request at any time
by any holder of Series A Preferred Stock, furnish or cause to be furnished to
such holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Conversion Price and Conversion Rate at the time in
effect for the Series A Preferred Stock held; and (iii) the number of shares of
Common Stock and the amount if any, of other property which at the time would be
received upon the conversion of the Series A Preferred Stock.

            (i) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, the Corporation
shall mail to each holder of Series A Preferred Stock at least ten (10) days
prior to the date specified herein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.

            (j) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A Preferred Stock such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.

            (k) Notices. Any notice required by the provisions of this paragraph
5 to be given to the holder of shares of the Series A Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his latest address appearing on the books
of the Corporation.

      6. Protective Provisions. In addition to any other rights provided by law,
without first obtaining the affirmative vote or written consent of the holders
of at least two-thirds (66.67%) of the then-outstanding shares of Series A
Preferred Stock, voting or consenting as a separate class, the Corporation shall
not:

            (a) amend or repeal any provision of, or add any provision to, the
Articles of Incorporation or the Bylaws of the Corporation, or file any
certificate of designations, preferences,

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limitations and relative rights of any series of preferred stock, if such action
would alter or change the preferences, rights, privileges or powers of, or
restrictions provided for the benefit of, the Series A Preferred Stock;

            (b) create or authorize the creation of (by reclassification or
otherwise) any additional class or series of shares of stock of the Corporation
or any other securities convertible into shares of stock of the Corporation,
having rights, preferences or privileges that shall rank senior to or pari passu
to the Series A Preferred Stock, whether by merger, consolidation, or otherwise;

            (c) increase or decrease (other than by redemption or conversion)
the authorized number of shares of Common Stock, Series A Preferred Stock or
preferred stock; or

            (d) redeem any shares of capital stock.

      7. Appointment of Directors. At such time as the Corporation shall have
issued an aggregate of at least 200,000 shares of Series A Preferred Stock, the
holders of a majority of the outstanding Series A Preferred Stock, voting as a
separate class, shall have the right to elect one (1) member to the Board of
Directors of the Corporation, subject to the approval of such member by the
other members of the Corporation's Board of Directors, which approval shall not
be unreasonably withheld. In addition, at such time as the Corporation shall
have issued an aggregate of at least 400,000 shares of Series A Preferred Stock,
the holders of a majority of the outstanding Series A Preferred Stock, voting as
a separate class, shall have the right to elect one (1) additional member to the
Board of Directors of the Corporation, subject to the approval of such member by
the other members of the Corporation's Board of Directors, which approval shall
not be unreasonably withheld. The holders of a majority of the outstanding
Series A Preferred Stock shall have the right, with respect to any member of the
Board of Directors that they elect, to remove such member, elect a new member,
or appoint a member to fill any vacancies in such position, subject to the
approval of such member by the other members of the Corporation's Board of
Directors, which approval shall not be unreasonably withheld. The rights granted
pursuant to this paragraph 7 shall expire on the earlier of: (a) the third
anniversary of the filing of this Certificate of Designations; and (b) any time
after the close of any period consisting of 30 consecutive trading days during
which: (i) the per share closing bid price of the Common Stock, as reported on
any exchange, automatic quotation system, over-the-counter bulletin board or
other market, for each such trading day has been at least $1.50; and (ii) the
volume of Common Stock traded during such period averaged at least 10,000 shares
per trading day (such earlier date being referred to as the "Expiration Date").
Notwithstanding anything herein to the contrary, in the event that the Series A
Preferred Stock automatically converts to Common Stock pursuant to the terms of
subparagraph 5(b)(i) prior to the Expiration Date, the holders of the Series A
Preferred Stock that has been converted shall be entitled to the rights set
forth in this paragraph 7, notwithstanding the conversion of such Series A
Preferred Stock, until the Expiration Date. In such event, all references in
this paragraph 7 to holders of Series A Preferred Stock shall be deemed to refer
to holders of shares of Common Stock that are issued upon such automatic
conversion of Series A Preferred Stock pursuant to subparagraph 5(b)(i).

      8. Amendment of Certificate of Designations. Without first obtaining the
approval of the holders of at least two-thirds (66.67%) of the Series A
Preferred Stock, the Corporation may not amend or supplement this Certificate of
Designations.

                            [SIGNATURE ON NEXT PAGE]

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      IN WITNESS WHEREOF, AssuranceAmerica Corporation has caused this
Certificate of Designations to be signed and attested by its duly authorized
officer, this 28th day of June, 2004.

                                          ASSURANCEAMERICA CORPORATION

                                          By: /s/ Lawrence Stumbaugh
                                              ---------------------------------
                                              Lawrence Stumbaugh, President and
                                              Chief Executive Officer

                                       10Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

      THIS STOCK PURCHASE AGREEMENT ("Agreement") is made effective as of the
30th day of June, 2004 (the "Effective Date"), by and between AssuranceAmerica
Corporation, a Nevada corporation (the "Company"), Guy W. Millner ("Millner")
and Heritage Assurance Partners, L.P., a Georgia limited partnership (the
"Purchaser").

      For good and valuable consideration, including the mutual promises,
covenants and conditions hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

      1. Purchase of Shares.

            1.1 Purchase of Stock. Subject to the terms and conditions of this
Agreement, the Company hereby sells to Purchaser, and Purchaser hereby purchases
from the Company, Two Hundred Forty Thousand (240,000) shares of the Company's
Series A Convertible Preferred Stock, $0.01 par value per share (the "Series A
Preferred Stock"), at a purchase price of $5.00 per share. The shares of Series
A Preferred Stock to be purchased from the Company by Purchaser are sometimes
herein referred to as the "Shares."

            1.2 Closing; Delivery.

                  (a) The purchase and sale of the Shares shall take place
remotely via the exchange of documents and signatures, at the offices of Womble
Carlyle Sandridge & Rice, PLLC, 1201 W. Peachtree Street, Atlanta, Georgia 30309
at 10:00 a.m. on June 30, 2004, or at such other time and place as the Company
and Purchaser mutually agree upon, orally or in writing (which time and place
are designated as the "Initial Closing"). In the event there is more than one
closing, the term "Closing" shall apply to each such closing unless otherwise
specified.

                  (b) At each Closing, the Company shall deliver to Purchaser a
certificate representing the Shares being purchased by Purchaser at such Closing
against payment of the purchase price therefore by check payable to the Company
or by wire transfer to a bank account designated by the Company.

            1.3 Sale of Additional Shares of Preferred Stock. After the Initial
Closing, the Company may sell, on the same terms and conditions as those
contained in this Agreement, up to 360,000 additional shares of Series A
Preferred Stock (the "Additional Shares"), to one or more purchasers (the
"Additional Purchasers") reasonably acceptable to Purchaser, provided that (i)
such subsequent sale is consummated prior to 30 days after the Initial Closing,
and (ii) each Additional Purchaser shall become a party to this Agreement by
executing and delivering a counterpart signature page to this Agreement.

      2. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser that, except as set forth on the Disclosure
Schedule attached as Schedule A to this Agreement which exceptions shall be
deemed to be part of the representations and warranties made hereunder, the
following representations are true and complete as of the date of the Initial
Closing, except as otherwise indicated. The Disclosure Schedule shall be
arranged in sections corresponding to the numbered and lettered sections and
subsections contained in this Section 2, and the disclosures in any section or
subsection of the Disclosure Schedule shall qualify other sections and
subsections in this

<PAGE>

Section 2 only to the extent it is readily apparent from a reading of the
disclosure that such disclosure is applicable to such other sections and
subsections.

            2.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. The Company has the requisite corporate power to own and operate its
properties and assets, and to carry on its business as presently conducted and
as proposed to be conducted.

            2.2 Corporate Power. The Company has all requisite legal and
corporate power to enter into this Agreement, to sell the Shares hereunder, and
to carry out and perform its obligations under the terms of this Agreement.

            2.3 Capitalization. The Company's entire authorized capital stock
consists of 85,000,000 shares, of which 80,000,000 shares are common stock,
$0.01 par value per share ("Common Stock"), 45,211,090 shares of which are
issued and presently outstanding, and 5,000,000 shares are preferred stock,
$0.01 par value per share ("Preferred Stock"), none of which are presently
outstanding. The Company has reserved 5,000,000 shares of Common Stock for
issuance to officers, directors, employees and consultants of the Company
pursuant to its 2000 Stock Option Plan duly adopted by the Board of Directors
and approved by the Company stockholders (the "Stock Plan"). Of such reserved
shares of Common Stock, no shares have been issued pursuant to restricted stock
purchase agreements, options to purchase 2,438,918 shares have been granted and
are currently outstanding, and 2,561,082 shares of Common Stock remain available
for issuance to officers, directors, employees and consultants pursuant to the
Stock Plan.

            2.4 Authorization. All corporate action on the part of the Company,
its officers, board of directors (the "Board") and shareholders necessary for
the sale and issuance of the Shares pursuant hereto and the performance of the
Company's obligations hereunder has been taken. This Agreement constitutes a
valid and binding obligation of the Company, enforceable in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
reorganization, insolvency or moratorium laws or other similar laws affecting
creditors' rights generally or general principles of equity whether asserted in
a proceeding at law or in equity. The Shares are validly issued, fully paid and
nonassessable, free of any liens or encumbrances, with all original issuance
taxes paid thereon.

            2.5 Brokers. The Company has no contract, arrangement or
understanding with any broker, finder, or similar agent with respect to the
transactions contemplated by this Agreement.

            2.6 Subsidiaries. Except as set forth on Section 2.6 of Schedule A,
the Company does not currently own or control, directly or indirectly, any
interest in any other corporation, partnership, trust, joint venture, limited
liability company, association, or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement.

            2.7 Valid Issuance of Shares. The Shares, when issued, sold and
delivered in accordance with the terms and for the consideration set forth in
this Agreement, will be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under this
Agreement, that certain Registration Rights Agreement of even date herewith by
and among the Company and Purchaser (the "Registration Rights Agreement"),
applicable state and federal securities laws and liens or encumbrances created
by or imposed by Purchaser. Assuming the accuracy of the representations of
Purchaser in Section 3 of this Agreement, the Shares will be issued in
compliance with all applicable federal and state securities laws. The Common
Stock issuable upon conversion of the Shares has been duly reserved for
issuance, and upon issuance in accordance with the terms of the

<PAGE>

Amended and Restated Articles of Incorporation of the Company (the "Restated
Articles"), will be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under this
Agreement, the Registration Rights Agreement, applicable federal and state
securities laws and liens or encumbrances created by or imposed by Purchaser.
Based in part upon the representations of Purchaser in Section 3 of this
Agreement, the Common Stock issuable upon conversion of the Shares will be
issued in compliance with all applicable federal and state securities laws.

            2.8 Governmental Consents and Filings. Assuming the accuracy of the
representations made by Purchaser in Section 3 of this Agreement, no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority is required on the part of the Company in connection with
the consummation of the transactions contemplated by this Agreement, except for
(i) the filing of the Certificate of Designations, substantially in the form
attached hereto (the "Certificate of Designations"), which will have been filed
as of the Initial Closing, and (ii) filings pursuant to Regulation D of the
Securities Act, and applicable state securities laws, which have been made or
will be made in a timely manner.

            2.9 Litigation. Except as set forth in Section 2.9 of Schedule A,
there is no claim, action, suit, proceeding, arbitration, complaint, charge or
investigation pending or to the Company's knowledge, currently threatened (i)
against the Company or any officer, director or key employee of the Company;
(ii) that questions the validity of the this Agreement or the right of the
Company to enter into it, or to consummate the transactions contemplated by this
Agreement; or (iii) that would reasonably be expected to have, either
individually or in the aggregate, a material adverse effect on the business,
assets (including intangible assets), liabilities, financial condition,
property, prospects or results of operations of the Company (a "Material Adverse
Effect"). Neither the Company nor, to the Company's knowledge, any of its
officers or directors, is a party or is named as subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. Except as set forth in Section 2.9 of Schedule A,
there is no action, suit, proceeding or investigation by the Company pending or
which the Company intends to initiate. The foregoing includes, without
limitation, actions, suits, proceedings or investigations pending or threatened
in writing (or any basis therefor known to the Company) involving the prior
employment of any of the Company's employees, their services provided in
connection with the Company's business, or any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers.

            2.10 Compliance with Other Instruments. The Company is not in
violation or default (i) of any provisions of its Restated Articles or Bylaws,
(ii) of any instrument, judgment, order, writ or decree, (iii) under any note,
indenture or mortgage, or (iv) under any lease, agreement, contract or purchase
order to which it is a party or by which it is bound, or of any provision of
federal or state statute, rule or regulation applicable to the Company, the
violation of which would have a Material Adverse Effect. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either (i) a default under any such provision, instrument, judgment,
order, writ, decree, contract or agreement or (ii) an event which results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, forfeiture, or nonrenewal of any material permit or
license applicable to the Company.

            2.11 Financial Statements. The Company has delivered to Purchaser
its audited financial statements as of December 31, 2002 and December 31, 2003
and its unaudited financial

<PAGE>

statements (including balance sheet, income statement and statement of cash
flows) as of for the three-month period ended March 31, 2004 (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated. The Financial Statements fairly present
in all material respects the financial condition and operating results of the
Company as of the dates, and for the periods, indicated therein, subject in the
case of the unaudited financial statements to normal year-end audit adjustments.
Except as set forth in the Financial Statements, the Company has no material
liabilities or obligations, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to December 31, 2003 and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in the Financial Statements, which, in both cases, individually and
in the aggregate would not have a Material Adverse Effect. The Company maintains
and will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.

            2.12 Permits. The Company and each of its subsidiaries has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business, the lack of which could reasonably be expected to have
a Material Adverse Effect. The Company is not in default in any material respect
under any of such franchises, permits, licenses or other similar authority.

            2.13 Disclosure. The Company has provided Purchaser with all of the
information reasonably available to it that Purchaser has requested for deciding
whether to acquire Shares. All information that the Company believes is
reasonably necessary to enable Purchaser to make such decision has either been
provided to Purchaser or is included in the Company's filings with the
Securities and Exchange Commission (the "SEC"). Neither this Agreement, nor any
and all certificates, instruments or written statements furnished or made to
Purchaser by or on behalf of the Company in connection with this Agreement,
taken as a whole, and including any corrective materials furnished or made
available to Purchaser prior to the date hereof, contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances under which they were made. The Company
knows of no information or fact that has or would have a Material Adverse Effect
that has not been disclosed to Purchaser in writing or disclosed in the
Company's filings with the SEC.

      3. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Company as follows:

            3.1 Investment Representations. This Agreement is made with
Purchaser upon the understanding as a specific representation to the Company by
Purchaser that:

                  (a) the Shares purchased hereunder will be acquired for
Purchaser's own account and not with a view to the distribution of any part
thereof, and Purchaser has no present intention of selling, granting
participation in, or otherwise distributing the same;

                  (b) Purchaser acknowledges that Purchaser has the knowledge
and experience in financial and business matters so as to be capable of
evaluating the merit and risk of and protecting Purchaser's own interests in
connection with Purchaser's purchase of such Shares, has had the opportunity to
ask such questions of the Company and to review such documents as Purchaser
deemed necessary in connection with its purchase of Shares, including those Risk
Factors of the Company dated May 18, 2004, and attached hereto as Exhibit "A",
is able to fend for Purchaser in the transactions

<PAGE>

contemplated by this Agreement and has the ability to bear the economic risk of
Purchaser's investment pursuant to this Agreement;

                  (c) Purchaser is an "accredited investor," as that term is
defined in Rule 501 promulgated under the Securities Act of 1933, as amended
(the "Securities Act"); and

                  (d) Purchaser understands that such Shares are characterized
as "restricted securities" under the federal securities laws and certain state
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such Shares may be resold without registration under the
Securities Act and those state securities laws only in certain limited
circumstances. In this connection, Purchaser represents that Purchaser is
familiar with Rule 144 promulgated under the Securities Act ("Rule 144"), as
presently in effect, understands the resale limitations imposed thereby and by
the Securities Act, and is aware that the Company is under no obligation to
create a public market for its securities.

            3.2 Brokers. Purchaser has no contract, arrangement or understanding
with any broker, finder, or similar agent with respect to the transactions
contemplated by this Agreement.

      4. Transfer of Shares

            4.1 Restrictive Legends. Each certificate evidencing Shares issued
or sold under this Agreement shall contain or otherwise be imprinted with
suitable legends in substantially the following form:

      "The securities evidenced by this certificate have been acquired for
      investment and have not been registered under the Securities Act of 1933
      (the "Securities Act") in reliance on certain exemptions contained
      therein, or under the securities act of any state (the "State Acts") in
      reliance on certain exemptions contained therein. These securities may not
      be sold, transferred or otherwise disposed of except in a transaction (a)
      registered under the Securities Act or exempt from registration thereunder
      and registered under the applicable State Acts or exempt from registration
      thereunder, or (b) otherwise in compliance with the Securities Act and the
      applicable State Acts.

      The Company will furnish without charge to each stockholder who so
      requests the powers, designations, preferences, relative, participating,
      optional or other special rights of the Series A Preferred Stock, and the
      qualifications, limitations or restrictions of such preferences and/or
      rights.

      This security is subject to transfer restrictions contained in a certain
      Stock Purchase Agreement dated as of June 30, 2004, and no transfer of the
      security shall be made unless the conditions specified in said Agreement
      have been fulfilled. A copy of said Agreement is on file and available for
      inspection at the principal offices of the Company."

      The Company is hereby authorized to place "stop transfer" instructions on
its records or to instruct any transfer agent to prevent the transfer of Shares
except in conformity with this Agreement.

            4.2 Securities Law Compliance. Purchaser shall not transfer any
Shares until Purchaser has first given written notice to the Company describing
briefly the manner of any such proposed transfer and until (i) the Company has
received from Purchaser's counsel an opinion

<PAGE>

(reasonably satisfactory in form and substance to the Company's counsel) that
such transfer can be made without compliance with the registration provisions of
the Securities Act or any state securities act; (ii) Purchaser shall have
complied with Rule 144 and applicable state securities act requirements; or
(iii) a registration statement filed by the Company is declared effective by the
SEC and governing state securities act authorities or steps necessary to perfect
exemptions from such registration are completed.

            4.3 Transfers to Affiliates. Purchaser may transfer its Shares to
any Affiliate of Purchaser without being required to provide the opinion of
counsel referred to in Section 4.2. For purposes of this Section 4, "Affiliate"
shall be defined to mean any other person or entity, directly or indirectly,
controlling or controlled by or under direct or indirect common control with
Purchaser.

      5. Closing Conditions

            5.1 Conditions to Purchaser's Obligations at Closing. The
obligations of Purchaser to purchase Shares at the Initial Closing or any
subsequent Closing are subject to the fulfillment, on or before such Closing, of
each of the following conditions, unless otherwise waived:

                  (a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects as of such Closing, except that any such representations
and warranties shall be true and correct in all respects where such
representation and warranty is qualified with respect to materiality in Section
2.

                  (b) Performance. The Company shall have performed and complied
with all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
such Closing.

                  (c) Compliance Certificate. The President of the Company shall
deliver to Purchaser at such Closing a certificate certifying that the
conditions specified in Sections 5.1(a) and 5.1(b) have been fulfilled.

                  (d) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Shares pursuant to this Agreement shall be obtained and effective as of
such Closing.

                  (e) Board of Directors. As of the Initial Closing, the
authorized size of the Board shall be nine (9) members and the Board shall be
comprised of Millner, Lawrence Stumbaugh, Donald Ratajczak, Quill O. Healey,
John E. Cay III and Sam Zamarripa and two vacancies. If and when an aggregate of
400,000 shares of Series A Preferred Stock are sold to Purchaser, then an
individual to be designated by Purchaser shall be added to the Board.

                  (f) Certificate of Designations. The Company shall have filed
the Certificate of Designations with the Secretary of State of Nevada on or
prior to the Closing, which shall continue to be in full force and effect as of
the Closing.

                  (g) Secretary's Certificate. The Secretary of the Company
shall have delivered to Purchaser at the Closing a certificate certifying (i)
the Bylaws of the Company, (ii) resolutions of the Board of Directors of the
Company approving this Agreement and the transactions contemplated under this
Agreement, and (iii) resolutions of the Board of Directors of the Company
approving the Certificate of Designations.

<PAGE>

                  (h) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser, and Purchaser (or its counsel) shall have received all
such counterpart original and certified or other copies of such documents as
reasonably requested. Such documents may include good standing certificates.

                  (i) Preemptive Rights. The Company shall have fully satisfied
(including with respect to rights of timely notification) or obtained
enforceable waivers in respect of any preemptive or similar rights directly or
indirectly affecting any of its securities.

                  (j) Completion of Due Diligence Examination. Purchaser shall
have completed to its satisfaction a due diligence examination of the Company.

            5.2 Conditions of the Company's Obligations at Closing. The
obligations of the Company to sell Shares to Purchaser at the Initial Closing or
any subsequent Closing are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:

                  (a) Representations and Warranties. The representations and
warranties of Purchaser contained in Section 3 shall be true and correct in all
material respects as of such Closing.

                  (b) Performance. Purchaser shall have performed and complied
with all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
such Closing.

                  (c) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Shares pursuant to this Agreement shall be obtained and effective as of
the Closing.

                  (d) General Partner's Certificate. The General Partner of
Purchaser shall deliver to the Company at such Closing a certificate certifying
(i) that the conditions specified in Sections 5.2(a) and 5.2(b) have been
fulfilled and (ii) the resolutions of the General Partner of Purchaser approving
this Agreement and the transactions contemplated under this Agreement.

      6. Certain Agreements of Millner.

            6.1 Right of Co-Sale. Millner agrees that he will not, prior to the
date specified in Section 6.2, sell, or agree to sell, for value any shares of
the Company's capital stock owned by him either jointly or individually to any
third party (except for sales of not more than 20% of the number of shares of
the Company's capital stock owned by Millner on the date of this Agreement, the
unused portion of which shall be usable in later periods, all such computations
to be on an as-converted to Common Stock basis) without first giving written
notice in reasonable detail to Purchaser at least 20 days prior to such sale or
agreement to sell and affording Purchaser the opportunity to elect, within 20
days of such notice, to participate in such sale, or agreement to sell, on a pro
rata basis and on the same terms and conditions as those applicable to Millner.
Notwithstanding anything to the contrary contained herein, prior to the date
specified in Section 6.2, once Millner has sold more than 20% of his shares in
the aggregate, Purchaser's co-sale rights shall apply to all future sales by
Millner.

<PAGE>

            For purposes of this Section 6.1, the term "pro rata basis" shall
mean that Purchaser shall be entitled to participate in such sale or agreement
to sell in the proportion that the number of the shares of Common Stock issued
or issuable upon conversion of the Shares, and any securities issued as a
dividend or other distribution with respect to, or in exchange or in replacement
thereof (the "Purchaser Shares") then held by Purchaser bears to the sum of such
number of the Purchaser Shares and the number of shares of Common Stock then
owned (either jointly or individually) by Millner, or issuable upon conversion
of other shares of the Company's capital stock so owned by Millner.
Notwithstanding anything herein to the contrary, the rights of Purchaser
provided for in this Section 6.1 shall not apply to sales, gifts or other
dispositions by Millner to (i) a member of Millner's immediate family, including
for this purpose his spouse, parents, parents-in-law, issue, nephews, nieces,
brothers, brothers-in-law, sisters, sisters-in-law, children-in-law and
grandchildren-in-law; (ii) a trust or partnership set up for the benefit of one
or more of the persons set forth in (i); (iii) an heir, legatee or legal
representative of Millner or (iv) any non-profit organization.

            6.2 Term. The provisions of this Section 6 shall continue in effect
until the earliest to occur of: (i) such time as Millner ceases to own any
capital stock of the Company, (ii) such time as Purchaser ceases to own any
Shares; (iii) the involuntary termination or termination without cause of the
employment of Millner with the Company; or (iv) the second anniversary of the
date hereof.

      7. Issuances of Stock. Subject to Section 7.4, each time the Company
proposes to offer any shares of, or securities convertible into or exercisable
for any shares of, any class of its capital stock ("Company Securities"), the
Company shall first offer such Company Securities to Purchaser in accordance
with the following provisions:

            7.1 The Company shall deliver a written notice (an "Issuance
Notice") to Purchaser stating (i) its bona fide intention to offer such Company
Securities, (ii) the number of such Company Securities to be offered, and (iii)
the price and terms, if any, upon which it proposes to offer such Company
Securities.

            7.2 By written notification received by the Company within 20 days
after receipt of the Issuance Notice, Purchaser may elect to purchase or obtain,
at the price and on the terms specified in the Issuance Notice, up to that
portion of such Company Securities which equals the proportion that the number
of shares of Common Stock then held by Purchaser, including the number of shares
of Common Stock into which Purchaser's Series A Preferred Stock could then be
converted ("Conversion Stock"), bears to the total number of shares of Common
Stock of the Company then outstanding (assuming full conversion and exercise of
all outstanding convertible or exercisable securities as of the date of the
Issuance Notice). Promptly following the completion of the foregoing process and
determination of the number of Company Securities elected to be obtained by
Purchaser, the Company and Purchaser shall consummate and close the purchase and
sale of the Company Securities.

            7.3 In the event that an offering of Company Securities is not fully
subscribed within ninety (90) days after the commencement of such offering,
Purchaser shall have the right to purchase any Company Securities not subscribed
for in such offering.

            7.4 The right to purchase Company Securities pursuant to this
Section 7 shall not be applicable to: (i) the issuance or sale of shares of
Common Stock (or options therefor) pursuant to an equity-based compensation plan
or similar arrangement approved by the Board of Directors, (ii) any issuance of
Company Securities to Purchaser pursuant to this Agreement; and (iii) any public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering

<PAGE>

any Company Securities with aggregate proceeds to the Company, at the public
offering price, of at least $20,000,000, before underwriting commissions and
expenses, and at a per share price of at least three times the then-current
conversion price of the Series A Preferred Stock (a "Qualified Offering").

            7.5 The covenants set forth in this Section 7 shall be terminated
and be of no force or effect upon the earlier of (i) the closing of a Qualified
Offering or (ii) the date Purchaser no longer owns the Shares or Common Stock
received by Purchaser upon the conversion of the Shares to Common Stock.

      8. Miscellaneous.

            8.1 Successors and Assigns. All covenants and agreements contained
in this Agreement made by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of such
parties, except as otherwise provided herein.

            8.2 Governing Law. The internal laws of the State of Georgia
(regardless of conflict of laws principles) shall govern all issues concerning
the construction, validity and interpretation of this Agreement. The parties
agree that any dispute or controversy arising out of or relating to this
Agreement shall be brought exclusively in the applicable federal or state courts
located in Atlanta, Georgia.

            8.3 Survival. Any and all representations and warranties of the
Company shall terminate and expire eighteen (18) months from the Effective Date
and thereafter no claim may be asserted on account of an alleged breach thereof.

            8.4 Entire Agreement; Amendment. This Agreement and the other
documents delivered pursuant hereto or contemplated hereby constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and supercedes any prior agreement between the
parties. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated except by a written instrument signed (a) in the case
of an amendment, waiver, discharge or termination (a "Modification") to Section
6, by Millner and Purchaser; and (b) in the case of a Modification to any other
provision of this Agreement, by the Company and Purchaser.

            8.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be made by hand delivery,
first-class mail (registered or certified, return receipt requested),
telecopier, or overnight air courier guaranteeing next day delivery, addressed
as follows: (a) if to Purchaser, at Heritage Assurance Partners, L.P., 3353
Peachtree Road, NE, Suite 1040, Atlanta, Georgia 30326, and (b) if to the
Company, at AssuranceAmerica Corporation, RiverEdge One, Suite 600, 5500
Interstate North Parkway, Atlanta, Georgia 30328, with a copy to G. Donald
Johnson, Esq., Womble Carlyle Sandridge & Rice, PLLC, One Atlantic Center, Suite
3500, 1201 West Peachtree Street, N.E., Atlanta, Georgia 30309, or to such other
address as the party receiving such notice shall have properly designated to the
other party hereto in writing. Each such notice shall be deemed given at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

            8.6 Expenses. At the Initial Closing, the Company shall pay the
reasonable fees and expenses of Kilpatrick Stockton LLP, not to exceed $10,000
(plus reasonable out of pocket expenses).

<PAGE>

            8.7 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of the Shares upon any breach or default
of the Company under this Agreement, shall impair any such right, power or
remedy of such holder, nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereunder occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. All remedies, either under this Agreement, or by law or
otherwise afforded to any holder, shall be cumulative and not alternative.

            8.8 Counterparts. This Agreement may be executed in any number of
counterparts, some of which may have signature pages differing as to form, each
of which shall be enforceable against the parties actually executing such
counterparts and all of which together shall constitute one instrument.

            8.9 Severability. If any provision of this Agreement, or its
application to any person or circumstances, is invalid or unenforceable, then
the remainder of this Agreement or the application of such provision to other
persons or circumstances, shall not be affected thereby.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

      The foregoing Agreement is hereby executed under seal as of the date first
above written.

                                        THE COMPANY:

                                        ASSURANCEAMERICA CORPORATION

                                        By: /s/ Lawrence Stumbaugh
                                            ------------------------------------
                                            Lawrence Stumbaugh, President and
                                            Chief Executive Officer

                                        MILLNER:

                                        /s/ Guy W. Millner
                                        ----------------------------------------
                                        GUY W. MILLNER

                                        PURCHASER:

                                        HERITAGE ASSURANCE PARTNERS, L.P.

                                            By: HERITAGE FUND ADVISORS, LLC,
                                                General Partner

                                            By: /s/ J. Wesley Grace
                                                --------------------------------
                                            Name: J. Wesley Grace
                                                 -------------------------------
                                            Its: Treasurer
                                                 -------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]