SETTLEMENT AGREEMENT



       THIS  SETTLEMENT  AGREEMENT  is  entered  into  as  of  this 24th day of
January, 2005, to be effective as of December 31, 2004, by and between  Transax
International  Limited,  a Colorado corporation (the "Company") and Carlingford
Investments Limited ("Carlingford").



                                   RECITALS:

       WHEREAS,  the Company  has  incurred  substantial  monetary  obligations
concerning its business  operations  and  the  development and marketing of its
products;

       WHEREAS, Carlingford has made monetary advances  to  the  Company in the
aggregate amount of $245,000.00 in order to assist the Company in financing its
contractual  debts and ongoing business expenses, and the Company has  incurred
$8,036.20 to Carlingford  relating  to accrued interest on the $245,000.00 debt
for an aggregate amount of $253,036.20 due and owing  (the "Debt");

       WHEREAS,  the Company and Carlingford  have  settled  their  differences
regarding the Debt  and wish to set forth their settlement agreement;

         WHEREAS, the  Company  desires  to  settle  the  Debt  by  issuing  to
Carlingford  and/or  its  designates  1,686,908 shares of its restricted common
stock, par value $0.00001 at the rate of $0.15 per share, which amount is based
upon the average of the open and close  price  of $0.15 of the Company's shares
of Common Stock traded on the OTC Bulletin Board  between December 21, 2004 and
December 31, 2004 (the "Common Stock");

       WHEREAS, Carlingford desires to convert the Debt and accept the issuance
of  1,686,908  shares of restricted Common Stock of the  Company  as  full  and
complete satisfaction of the Debt; and

       WHEREAS,  the  Board  of  Directors  of the Company by unanimous written
consent  dated  January  24,  2005 has approved:  (i)  the  execution  of  this
Settlement  Agreement;  and (ii)  the  issuance  of  the  1,686,908  shares  of
restricted Common Stock to  Carlingford  as settlement of the Debt effective as
of December 31, 2004.

       NOW, THEREFORE, in consideration of  the  aforesaid  recitals and mutual
promises  contained  herein,  the  receipt and sufficiency of which  is  hereby
acknowledged, the parties agree as follows:






                                   AGREEMENT

       1.  The Company agrees to issue  to  Carlingford  and/or  its designates
1,686,908  shares  of  its restricted Common Stock, at $0.15 per share,  as  of
December 31, 2004, as full and complete satisfaction and payment of the Debt.

       2.  Carlingford agrees to accept the issuance of the 1,686,908 shares of
the restricted Common Stock  of  the  Company as full and complete satisfaction
and payment of the Debt.

       3. The Company and Carlingford shall  agree  to  release  each other and
forever discharge any and all claims, manner of actions, whether at  law  or in
equity  suits,  judgments, debts, liens, liabilities, demands, damages, losses,
sums of money, expenses  or  disputes,  known  or unknown, fixed or contingent,
which it now has or may have hereafter, directly or indirectly, individually or
in any capacity against each other, their successors  and  assigns,  as well as
its  present  or  former  owners, directors, officers, stockholders, employees,
agents,  heirs,  by reason of  any  act,  omission,  matter,  cause,  or  thing
whatsoever, from the  beginning  of  time  to,  and  including  the date of the
execution of this Agreement, relating to the aforesaid Debt.

       4.   Carlingford  acknowledges  that  the  issuance  of an aggregate  of
1,686,908 shares of restricted Common Stock: (i) have not been registered under
the Securities Act of 1933, as amended (the "1933 Securities  Act"); (ii) is in
reliance on the exemption provided by Section 4(2) and/or Regulation  S  of the
1933  Securities  Act;  (iii)  are  being acquired solely for Carlingford's own
account without any present intention  for  resale  or  distribution,  with the
exception  of  those shares of Common Stock to be transferred to designates  of
Carlingford  in  accordance  with  that  certain  Letter  of  Instruction  from
Carlingford; (iv)  will  not  be  resold  without  registration  under the 1933
Securities  Act or in compliance with an available exemption from registration,
unless the shares  of Common Stock are registered under the 1933 Securities Act
and  under any applicable  state  securities  law  or  an  opinion  of  counsel
satisfactory  to the Company is delivered to the Company to the effect that any
proposed distribution  of  the  shares  of  Common  Stock  will not violate the
registration requirements of the 1933 Securities Act and any  applicable  state
securities  laws; and (v) that Carlingford understands the economic risk of  an
investment in  the Common Stock and has had the opportunity to ask questions of
and receive answers  from  the  Company's  management  concerning  any  and all
matters related to the acquisition of the Common Stock.

       5.  This Settlement Agreement shall be effective as of December 31, 2004
and  shall be binding upon and insure to the benefit of the parties hereto  and
their respective successors.



                                        Transax International Limited



Date:_____________                      By:__________________________
                                        Stephen Walters, President and
                                        Chief Executive Officer



                                        Carlingford Investments Limited



Date:______________                     By: __________________________
                                        President