TRANSAX INTERNATIONAL, LTD.
PLACEMENT AGENT AGREEMENT
Dated as of: May 17, 2005
Monitor Capital, Inc.
9171 Towne Centre Drive, Suite 465
San Diego, CA 92122
Ladies and Gentlemen:
The
undersigned, Transax International, Ltd., a Colorado corporation
(the
"Company"), hereby agrees with Monitor Capital, Inc. (the
"Placement Agent")
and Cornell Capital Partners, LP, a Delaware Limited Partnership (the
"Investor"), as follows:
1.Offering. The
Company hereby engages the Placement Agent to act as its
exclusive placement agent in connection
with the Standby Equity Distribution
Agreement dated the date hereof (the
"Standby Equity
Distribution Agreement"),
pursuant to which the Company shall issue
and sell to the
Investor, from
time
to time, and the Investor shall
purchase from the Company (the "Offering") up
to Five Million U.S. Dollars ($5,000,000) of
the Company's common stock (the
"Commitment Amount"), par value US$0.00001 per share
(the "Common Stock"), at
price per share equal to the Purchase Price, as that term is defined in the
Standby Equity Distribution Agreement.
The Placement
Agent services shall
consist of reviewing the terms of the
Standby Equity Distribution Agreement and
advising
the Company with respect to those terms.
All
capitalized terms used
herein and not otherwise defined herein shall
have the same meaning ascribed to them as in the Standby Equity
Distribution
Agreement. The Investor will be granted certain
registration
rights with
respect to the Common Stock as more fully set forth in the
Registration Rights
Agreement between the Company and
the Investor dated the date hereof (the
"Registration Rights Agreement"). The documents to be executed and
delivered
in connection with the Offering,
including,
but not limited, to
the Company's
latest Quarterly Report on Form 10-QSB as filed with the United States
Securities and Exchange Commission, this Agreement, the Standby Equity
Distribution Agreement, the Registration Rights Agreement, and the Escrow
Agreement dated the date hereof (the "Escrow
Agreement"), are
referred to
sometimes hereinafter collectively
as the "Offering
Materials." The
Company's
Common Stock purchased by the Investor
hereunder or to be
issued in connection
with the conversion of any debentures are
sometimes referred to
hereinafter as
the "Securities." The Placement Agent shall
not be obligated to sell any
Securities.
2.
Compensation.
A.No additional
compensation
is due to Placement Agent. The
Company has previously issued to the
Placement Agent or its designee shares of
the Company's Common Stock in an amount equal to Ten Thousand
U.S. Dollars
(US$10,000) (the "Placement Agent's
Shares"). The Placement Agent shall be
entitled to "piggy-back" registration rights, which shall
be triggered upon
registration of any shares of Common Stock by the Investor with
respect to the
Placement Agent's Shares pursuant
to the Registration Rights Agreement
dated
the date hereo
f.
3.Representations, Warranties and Covenants of the Placement
Agent.
A.The Placement
Agent represents, warrants and covenants as
follows:
(i)The Placement Agent has the necessary power to enter into
this Agreement and to consummate the
transactions contemplated hereby.
(ii)The execution and delivery by the Placement Agent of this
Agreement and the consummation of the
transactions contemplated herein will not
result in any violation of, or be in
conflict with, or constitute a default
under, any agreement or instrument to which the Placement
Agent is a party or
by which the Placement Agent or its properties are bound, or any judgment,
decree, order or, to the Placement Agent's
knowledge, any
statute, rule
or
regulation applicable to the Placement
Agent. This Agreement
when executed and
delivered by the Placement Agent, will constitute
the legal, valid and binding
obligations of the Placement Agent, enforceable in accordance with their
respective terms, except to the extent that (a) the
enforceability hereof or
thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights
of creditors
generally, (b) the enforceability
hereof or thereof is subject to general
principles of equity, or (c) the
indemnification provisions hereof or thereof
may be held to be in v iolation of public
policy.
(iii)Upon receipt
and execution of this Agreement, the
Placement Agent will promptly forward copies of
this Agreement to the Company
or its counsel and the Investor or its
counsel.
(iv)The Placement
Agent will not intentionally take any
action that it reasonably believes would cause the Offering to
violate the
provisions of the Securities Act of 1933,
as amended (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act"), the
respective rules
and
regulations promulgated thereunder
(the "Rules and
Regulations") or applicable
"Blue Sky" laws of any
state or jurisdiction.
(v)The Placement
Agent is a member of the National
Association of Securities Dealers, Inc.,
and is a broker-dealer
registered as
such under the 1934 Act and under the securities
laws of the states in which
the Securities will be offered or sold by the Placement Agent unless an
exemption for such state registration is
available to the Placement Agent. The
Placement Agent is in material compliance with the rules and regulations
applicable to the Placement Agent generally
and applicable to
the Placement
Agent's participation
in the Offering.
4.
Representations and Warranties of the Company.
A. The Company
represents and warrants as follows:
(i)The execution,
delivery and performance of each of
this
Agreement, the Standby Equity Distribution
Agreement, the Escrow Agreement, and
the Registration Rights Agreement has been or will be duly and validly
authorized by the Company and is, or with respect
to this Agreement, the
Standby Equity Distribution Agreement, the Escrow Agreement, and the
Registration Rights Agreement, will be a valid
and binding agreement
of the
Company, enforceable in accordance with its respective terms, except to
the
extent that (a) the enforceability hereof or
thereof may be limited by
bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to
time in effect and affecting
the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to
general principles of equity or
(c) the indemnification provisions hereof or thereof may be held to be in
violation of public policy. The Securities to be issued pursuant
to the
transactions contemplated by this Agreement
and the Standby Equity Distribution
Agreement have been duly authorized and,
when issued and paid for in accordance
with this Agreement, the Standby Equity Distribution Agreement and the
certificates/instruments representing such Securities, will be valid and
binding obligations of the Company, enforceable
in accordance with their
respective terms, except to the extent that (1) the
enforceability thereof may
be limited by bankruptcy, insolvency,
reorganization,
moratorium
or similar
laws from time to time in effect and affecting the rights of creditors
generally, and (2) the enforceability
thereof is subject to
general principles
of equity. All corporate action
required to be taken for the authorization,
issuance and sale of the Securities has been duly and validly taken by
the
Company.
(ii)The Company has a duly authorized, issued and outstanding
capitalization as set forth herein and in the
Standby Equity Distribution
Agreement. The Company is not a party to or
bound by any instrument, agreement
or other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities, except for this Agreement, the
agreements described herein and as
described in the Standby Equity Distribution
Agreement, dated the date hereof and the agreements
described therein.
All
issued and outstanding securities of the
Company, have been duly authorized and
validly issued and are fully paid
and non-assessable;
the holders thereof have
no rights of rescission or preemptive
rights with respect thereto and are
not
subject to personal liability solely by
reason of being
security holders;
and
none of such securities were issued in
violation of the preemptive rights of
any holders of any sec urity of
the Company.
(iii)The Common
Stock to be issued in accordance with
this
Agreement and the Standby Equity Distribution Agreement has been duly
authorized and, when issued and paid for in
accordance with this Agreement, the
Standby Equity Distribution Agreement and the Compensation Debenture, the
certificates/instruments representing such
Common Stock will be validly issued,
fully-paid and non-assessable; the holders
thereof will not be subject to
personal liability solely by reason of
being such holders; such Securities are
not and will not be subject to the preemptive rights of any holder of
any
security of the Company
.
(iv)The Company has good and marketable title to, or valid
and enforceable leasehold estates in,
all items of real and personal property
necessary to conduct its business (including,
without limitation, any real or
personal property stated in the Offering
Materials to be owned or leased by the
Company), free and clear of all liens,
encumbrances, claims, security interests
and defects of any material nature whatsoever, other than those set
forth in
the Offering Materials and liens for taxes
not yet due and payable.
(v)There is no litigation or governmental proceeding
pending
or, to the best of the Company's knowledge,
threatened against,
or involving
the properties or business of the
Company, except as set forth in the Offering
Materials.
(vi)The Company
has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of
Colorado. Except as set forth in the
Offering Materials,
the Company does not
own or control, directly or indirectly,
an interest in any other
corporation,
partnership, trust, joint venture or other
business entity.
The Company is
duly qualified or licensed and in good standing as a foreign
corporation in
each jurisdiction in which the character
of its operations requires such
qualification or licensing and where failure to so qualify would have a
material adverse effect on the Company. The Company has all requisite
corporate power and authority, and all material
and necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies (domestic and
foreign) to conduct
its businesses (and proposed business) as described in the
Offering Materials.
Any disclosures in the Offering
Materials concerning the effects of foreign,
federal, state and local regulation on the
Company's businesses
as currently
conducted and as contemplated are correct in all
material respects and do not
omit to state a material fact. The Company has all corporate power and
authority to enter into this Agreement, the Standby Equity Distribution
Agreement, the Registration Rights Agreement, and the Escrow
Agreement,
to
carry out the provisions and conditions
hereof and thereof, and all consents,
authorizations, approvals and orders required in connection herewith and
therewith have been obtained. No consent, authorization
or order of, and no
filing with, any court, government agency or other body is
required by the
Company for the issuance of the
Securities
or execution and delivery of the
Offering Materials except for applicable federal and state
securities laws.
The Company, since its inception,
has not incurred any
liability arising under
or as a result of the application of any of
the provisions of the 1933 Act, the
1934 Act or the Rules
and Regulations.
(vii)There has
been no material adverse change in the
condition or prospects of the Company,
financial or
otherwise, from the latest
dates as of which such condition or
prospects,
respectively, are set
forth in
the Offering Materials, and the outstanding
debt, the property and the business
of the Company conform in all material respects
to the descriptions
thereof
contained in the Offeri
ng Materials.
(viii)Except as
set forth in the Offering Materials, the
Company is not in breach of, or in default
under, any term or
provision of any
material indenture, mortgage, deed of trust, lease, note,
loan or Standby
Equity Distribution Agreement or any
other material agreement or instrument
evidencing an obligation for borrowed
money, or any other material agreement or
instrument to which it is a party or by which
it or any of its properties may
be bound or affected. The Company is not in
violation of any provision of its
charter or by-laws or in violation of any
franchise, license, permit, judgment,
decree or order, or in violation
of any material statute, rule or
regulation.
Neither the execution and delivery of the
Offering Materials nor the issuance
and sale or delivery of the
Securities, nor the consummation of any of the
transactions contemplated in the Offering Materials nor the
compliance by the
Company with the terms and provisions
hereof or thereof, has conflicted with or
will conflict with, or has resulted
in or will result in a breach of, any
of
the terms and provisions of, or has
constituted or
will constitute a default
under, or has resulted in or will result in
the creation or
imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or
pursuant to the terms of any indenture,
mortgage, deed of
trust, note, loan or
any other agreement or instrument
evidencing an obligation for borrowed money,
or any other agreement or instrument to
which the Company may
be bound or to
which any of the property or assets of
the Company is subject except (a) where
such default, lien, charge or encumbrance would not have a
material adverse
effect on the Company and (b) as described
in the Offering
Materials; nor will
such action result in any violation of the
provisions of the charter or the by-
laws of the Company or, assuming the due
performance by the
Placement Agent of
its obligations hereunder, any material
statute or any
material order, rule or
regulation applicable to the Company of any
court or of any
foreign, federal,
state or other regulatory authority or other government body having
jurisdiction over the Co
mpany.
(ix)Subsequent to the
dates as of which information is given
in the Offering Materials, and except as may otherwise be indicated or
contemplated herein or therein and the securities offered pursuant to the
Securities Purchase Agreement dated the
date hereof, the
Company has
not (a)
issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, or (b)
entered into any
transaction other than
in the ordinary course of business,
or (c) declared or paid any dividend or
made any other distribution on or in
respect of its capital stock. Except as
described in the Offering Materials, the
Company has no outstanding obligations
to any officer or dire ctor
of the Company.
(x)There are
no claims for services in the nature of a
finder's or origination fee with respect to
the sale of the Common Stock or any
other arrangements, agreements or
understandings that may affect the Placement
Agent's compensation, as determined by the
National Association of Securities
Dealers, Inc.
(xi)The Company
owns or possesses, free and clear of all
liens or encumbrances and rights thereto or therein by third
parties, the
requisite licenses or other rights
to use all trademarks, service marks,
copyrights, service names, trade names, patents, patent applications and
licenses necessary to conduct its business
(including, without limitation, any
such licenses or rights described in the
Offering Materials as being owned or
possessed by the Company) and, except as set forth in the
Offering Materials,
there is no claim or action by any person
pertaining to, or proceeding, pending
or threatened, which challenges
the exclusive rights of the Company with
respect to any trademarks, service marks, copyrights, service names,
trade
names, patents, patent applications and
licenses used
in the conduct of the
Company's businesses (including, without limitation, any such licenses or
rights described in the Offering Materials
as being owned or
possessed by the
Company) except any claim or action that would not have a
material adverse
effect on the Company; the Company's
current products, services or processes do
not infringe or will not infringe on
the patents currently held by any third
party.
(xii)Except as
described in the Offering Materials, the
Company is not under any obligation to pay
royalties or
fees of any kind
whatsoever to any third party with respect to any
trademarks, service marks,
copyrights, service names, trade
names, patents, patent
applications, licenses
or technology it has developed, uses,
employs or intends to use or employ,
other than to their res
pective licensors.
(xiii)Subject to the
performance by the Placement Agent of
its obligations hereunder the offer
and sale of the Securities complies,
and
will continue to comply, in all material
respects with the requirements of Rule
506 of Regulation D promulgated by the SEC
pursuant to
the 1933 Act and any
other applicable federal and state laws, rules, regulations and
executive
orders. Neither the Offering Materials nor
any amendment or supplement thereto
nor any documents prepared by the Company
in connection with the
Offering will
contain any untrue statement of a material
fact or omit to state
any material
fact required to be stated therein or
necessary to make the statements therein,
in light of the circumstances under which
they were made, not misleading. All
statements of material facts in the Offering
Materials are true and correct as
of the date of the Offer
ing Materials.
(xiv)All material
taxes which are due and payable from
the
Company have been paid in full or adequate
provision has
been made for such
taxes on the books of the Company, except for those
taxes disputed in good
faith by the Company
(xv)None of the
Company nor any of its
officers, directors,
employees or agents, nor any other person
acting on behalf of the Company, has,
directly or indirectly, given or agreed
to give any money, gift or similar
benefit (other than legal price concessions
to customers in the ordinary course
of business) to any customer, supplier, employee or
agent of a customer
or
supplier, or official or employee of any
governmental agency or instrumentality
of any government (domestic or foreign) or
any political party or candidate for
office (domestic or foreign) or other person who is or may be
in a position to
help or hinder the business of the Company
(or assist it in connection with any
actual or proposed transaction)
which (A) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation
or
proceeding, or (B) if not given in the past, might have
had a materially
adverse effect on the assets, business or operations of the Company as
reflected in any of the financial statements contained in the Offering
Materials, or (C) if not continued in the future, might
adversely affect the
assets, business, operations or prospects
of the Company in the future.
5.
Representations,
Warranties and Covenants of the Investor.
A.The Investor represents, warrants and covenants as follows:
(i)The Investor has
the necessary power to enter into
this
Agreement and to consummate the
transactions contemplated hereby.
(ii)The execution
and delivery
by the Investor of this
Agreement and the consummation of the
transactions contemplated herein will not
result in any violation of, or be in
conflict with,
or constitute
