PROXY STATEMENT PURSUANT TO
              SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934


Filed by the Registrant [X]

Filed by a Party other than the Registrant Check the appropriate box:

   [ ]  Preliminary Proxy Statement
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        14a-6(e)(2)
   [X]  Definitive Proxy Statement
   [ ]  Definitive Additional Materials
   [ ]  Soliciting Material Pursuant to Section 240.14a-11(c) or
        Section 240.14a-12


                            VEGA-ATLANTIC CORPORATION
                ________________________________________________
                (Name of Registrant as Specified in its Charter)


________________________________________________________________________________
      (Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

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                                      -1-





                            VEGA-ATLANTIC CORPORATION
                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                            TO BE HELD AUGUST 8, 2003


     Notice is  hereby  given  that a special  meeting  (the  "Meeting")  of the
shareholders  (the  "Shareholders")  of  Vega-Atlantic  Corporation,  a Colorado
corporation (the  "Company") will be held at 2:00 p.m. on August 8, 2003, at 435
Martin Street,  Suite 2000,  Blaine,  Washington  98320, and any adjournments or
postponements thereof for the following purposes:

     1.   To approve a proposed amendment (the "Amendment") to the Company's
          Articles of Incorporation, as amended (the "Articles"), to effectuate
          a proposed change in name of the Company (the "Name Change") to such
          name as may be approved by the Board of Directors of the Company in
          its sole and absolute discretion;

     2.   To approve a proposed stock option plan for key personnel of the
          Company (the "Stock Option Plan");

     3.   To ratify the prior actions by shareholders of the Company taken
          pursuant to a written consent dated March 25, 2003 approving a reverse
          stock split of one-for-twenty of the Company's issued and outstanding
          shares of Common Stock effectuated approximately April 2, 2003 (the
          "Reverse Stock Split"); and

     4.   To consider and act upon such other business as may properly come
          before the Meeting or any adjournment thereof.

     Only Shareholders of record at the close of business on June 30, 2003 shall
be entitled to notice of and to vote at the Meeting or any adjournments thereof.
All Shareholders are cordially invited to attend the Meeting in person.


                                         By Order of the Board of Directors


                                         Grant Atkins, President


June 18, 2003
Blaine, Washington








IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. A RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES IS ENCLOSED FOR THAT PURPOSE.


                                      -2-





                            VEGA-ATLANTIC CORPORATION
                          435 Martin Street, Suite 2000
                            Blaine, Washington 98320

                                 PROXY STATEMENT
                                      DATED
                                  JUNE 18, 2003

                         SPECIAL MEETING OF SHAREHOLDERS
                            TO BE HELD AUGUST 8, 2003

                                     GENERAL

     This proxy statement (the "Proxy Statement") is being furnished to the
shareholders of Vega-Atlantic Corporation, a Colorado corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board of Directors") from holders (the
"Shareholders") of outstanding shares of common stock, $0.00001 par value, of
the Company (the "Common Stock"), for use at the special meeting of the
Shareholders to be held at 2:00 P.M. on August 8, 2003, at 435 Martin Street,
Suite 2000, Blaine, Washington 98320, and any adjournments or postponements
thereof (the "Meeting"). This Proxy Statement, Notice of Meeting of Shareholders
and the accompanying Proxy Card and Form 10-KSB Annual Report for the fiscal
year ended March 31, 2003, are first being mailed to Shareholders on or about
July 15, 2003.


                       VOTING SECURITIES AND VOTE REQUIRED

     Only Shareholders of record at the close of business on June 30, 2003 (the
"Record Date") are entitled to notice of and to vote the shares of Common Stock,
$0.00001 par value, of the Company held by them on such date at the Meeting or
any and all adjournments thereof. As of the Record Date an aggregate 1,106,778
shares of Common Stock were outstanding. There was no other class of voting
securities outstanding at that date.

     Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.

     The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Meeting. Assuming that a quorum is present, (i) the affirmative vote of the
holders of a majority of the shares of Common Stock outstanding will be required
to approve the proposed amendment (the "Amendment") to the Company's Articles of
Incorporation, as amended (the "Articles ) to effectuate the proposed change in
name of the Company (the "Name Change") to such name as may be approved by the
Board of Directors of the Company in its sole and absolute discretion; (ii) the
affirmative vote of the holders of a majority of the shares of Common Stock
outstanding will be required to approve the proposed stock option plan for the
Company (the "Stock Option Plan"); and (iii) the affirmative vote of the holders
of a majority of the shares of Common Stock outstanding will be required to
ratify the prior actions of the shareholders taken pursuant to a written consent
dated March 25, 2002 approving a reverse stock split of one-for-twenty of the
Company's issued and outstanding shares of Common Stock effectuated
approximately April 2, 2003 (the "Reverse Stock Split").

     Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will


                                      -3-





have the effect of a negative vote on the proposals being submitted at the
Meeting. Abstentions may be specified on all proposals. A broker "non-vote" will
have no effect on the outcome of any of the proposals.

     If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as
proxyholders in the accompanying Proxy will vote "FOR" approval of the proposed
Amendment to the Company's Articles to effectuate the proposed Name Change of
the Company, "FOR" approval of the proposed Stock Option Plan, and "FOR"
ratification of the prior actions of the shareholders pursuant to the written
conesent approving the Reverse Stock Split, and as recommended by the Board of
Directors with regard to any other matters or if no such recommendation is
given, in their own discretion. Each Proxy granted by a Shareholder may be
revoked by such Shareholder at any time thereafter by writing to the Secretary
of the Company prior to the Meeting, or by execution and delivery of a
subsequent Proxy or by attendance and voting in person at the Meeting, except as
to any matter or matters upon which, prior to such revocation, a vote shall be
been cast pursuant to the authority conferred by such Proxy.

     The cost of soliciting these Proxies, consisting of the printing, handling,
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.

     In order to assure that there is a quorum it may be necessary for certain
officers, directors, regular employees and other representatives of the Company
to solicit Proxies by telephone or telegraph or in person. These persons will
receive no extra compensation for their services.


                    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                               AND CONTROL PERSONS

CURRENT OFFICERS AND DIRECTORS

     As of the date of this Proxy Statement the directors and executive officers
of the Company are as follows:

    Name                    Age                 Position with the Company
____________                ___             ___________________________________

Grant Atkins                 42             Director, President/Chief Executive
                                            Officer, Secretary and Treasurer/
                                            Chief Financial Officer

     GRANT ATKINS has been the President/Chief Executive Officer, Secretary,
Treasurer/Chief Financial Officer and a director of the Company since October
15, 1998. For the past six years Mr. Atkins has been self-employed and has acted
as a financial and project coordination consultant to clients in government and
private industry. Mr. Atkins has extensive multi-industry experience in the
fields of finance, administration and business development. During 1998 and 1999
Mr. Atkins was a consultant through the private management consulting companies
of TriStar Financial Services Inc. and Investor Communications International,
Inc. Mr. Atkins is also a member of the Board of Directors of Intergold
Corporation, a publicly traded corporation formerly engaged in the exploration
of gold and silver, a member of the Board of Directors of Petrogen Corp., a
publicly traded corporation.


                                      -4-





AUDIT COMMITTEE

     As of the date of this Proxy Statement the Company has not appointed
members to an Audit Committee. As of the date of this Proxy Statement no Audit
Committee exists. Therefore, the role of an Audit Committee has been conducted
by the Board of Directors of the Company.

     The Company intends to establish an Audit Committee with additional
appointments to the Board of Directors of the Company, as the case may be. When
established, the Audit Committee will be comprised of at least two disinterested
members of the Board of Directors of the Company. When established, the Audit
Committee's primary function will be to provide advice with respect to the
Company's financial matters and to assist the Board of Directors in fulfilling
its oversight responsibilities regarding finance, accounting, tax and legal
compliance. The Audit Committee's primary duties and responsibilities will be:
(i) to serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system; (ii) to review and
appraise the audit efforts of the Company's independent accountants; (iii) to
evaluate the Company's quarterly financial performance as well as its compliance
with laws and regulations; (iv) to oversee management's establishment and
enforcement of financial policies and business practices; and (v) to provide an
open avenue of communication among the independent accountants, management and
the Board of Directors.

     The Board of Directors of the Company has considered whether the provision
of such non-audit services would be compatible with maintaining its principal
independent accountant's independence. The Board of Directors considered whether
the Company's principal independent accountant was independent, and concluded
that its principal independent accountant for the previous fiscal years ended
March 31, 2002 and March 31, 2003, was independent.

AUDIT FEES

     During the fiscal year ended March 31, 2003, the Company incurred
approximately $13,000 in fees to its principal independent accountant for
professional services rendered in connection with preparation and audit of the
Company's financial statements for fiscal year ended March 31, 2003 and for the
review of the Company's financial statements for the quarters ended June 30,
2002, September 30, 2002 and December 31, 2002.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

     During the fiscal year ended March 31, 2003, the Company did not incur any
fees for professional services rendered by its principal independent accountant
for certain information technology services which may have included, but were
not limited to, operating or supervising or managing the Company's information
or local area network or designing or implementing a hardware or software system
that aggregate source data underlying the financial statements.

ALL OTHER FEES

     During the fiscal year ended March 31, 2003, the Company did not incur any
other fees for professional services rendered by its principal independent
accountant for all other non-audit services which have included, but were not


                                      -5-





limited to, tax-related services, actuarial services or valuation services.


                    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

     The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the Company's
executive officers, directors and key employees; and (iii) all executive
officers and directors as a group. Common Stock not outstanding but deemed
beneficially owned by virtue of the right of an individual to acquire shares
within 60 days is treated as outstanding only when determining the amount and
percentage of Common Stock owned by such individual. Except as noted, each
person or entity has sole voting and sole investment power with respect to the
shares of Common Stock shown.



NAME                             POSITION      AMOUNT AND NATURE OF   PERCENT OF
                                               BENEFICIAL OWNERSHIP   OWNERSHIP
________________________________________________________________________________
                                                          (1)(2)
Alexander W. Cox                Shareholder          216,165           19.19%
428-755 Burrard St.
Vancouver, British Columbia
V6Z 1X6 Canada

                                                          (2)(3)
Pacific Rim Financial Inc.      Shareholder           56,665            5.03%
60 Market Square
P.O. Box 364
Belize City, Belize

                                                          (1)(2)(4)
Investor Communications         Shareholder          303,562           26.94%
 International, Inc.
435 Martin Street, Suite 2000
Blaine, Washington 98320

                                                          (1)(2)
TriStar Financial               Shareholder           60,811           5.40%
Services Inc.
435 Martin Street, Suite 2000
Blaine, Washington 98230

                                                          (2)(5)
Brent Pierce                    Shareholder           70,312            6.24%
16377 Lincoln Woods Court
Surrey, British Columbia
Canada V3S 0J8

                                                          (1)(2)
All officers and directors      Shareholder              250           .0002%
 as a group (1 person)

________________________________
(1)  These are restricted shares of Common Stock.


                                      -6-





(2)  Shares held of record have been adjusted to take into account the Reverse
     Stock Split effected approximately April 2, 2003.
(3)  Of the 56,665 shares of Common Stock held of record by Pacific Rim
     Financial Inc., approximately 15,000 are free trading.
(4)  The Company and Investor Communications International, Inc. ("ICI") entered
     into a two-year consulting services and management agreement dated April 1,
     1999 and renewed on April 1, 2001 for an additional two-year period (the
     "Consulting Agreement"), pursuant to which ICI performs a wide range of
     management, administrative, financial, marketing and public company
     services for the Company.
(5)  Of the 70,312 shares of Common Stock held of record by Brent Pierce,
     approximately 14,512 are free trading.


                             EXECUTIVE COMPENSATION

     As of the date of this Proxy Statement, none of the officers or directors
of the Company are compensated for their roles as directors or executive
officers of the Company as the Company is only in the development stage and has
not yet realized substantial revenues from business operations. Officers and
directors of the Company, however, are reimbursed for any out-of-pocket expenses
incurred by them on behalf of the Company. None of the Company's directors or
executive officers are party to employment agreements with the Company. The
Company presently has no pension, health, annuity, insurance, stock options,
profit sharing or similar benefit plans.

     Grant Atkins, the current President, Secretary, Treasurer and director of
the Company, derives remuneration from the Company indirectly through ICI, which
provides a wide range of financial, consulting, administrative and management
services to the Company on a month-to-month basis as needed.

     During the fiscal year ended March 31, 2003, the Company incurred
approximately (i) $375,250 for amounts due and owing for managerial,
administrative, financial and consulting services rendered by ICI; (ii) $27,483
as accrued interest; and (iii) $19,957 as advances payable. During the fiscal
year ended March 31, 2003, the Company repaid $133,200 to ICI. Furthermore, the
Company and ICI entered into a settlement agreement dated August 22, 2002 (the
"Settlement Agreement") pursuant to which: (i) the Company agreed to settle an
aggregate debt of $140,887.31 due and owing to ICI as of August 22, 2002,
including accrued interest, by the issuance of 4,696,244 pre-Reverse Stock Split
shares of its restricted Common Stock at the rate of $0.03 per share (which was
the average of the opening and the closing price of the Company's Common Stock
trading on the OTC Bulletin Board from July 1, 2002 through August 22, 2002,
discounted by 25%); and (ii) ICI agreed to accept the issuance of 4,696,244
pre-Reverse Stock Split shares of restricted Common Stock as settlement and full
satisfaction of the aggregate debt due and owing it.

     During the fiscal year ended March 31, 2003, Grant Atkins received an
aggregate of $17,325 from ICI for services provided to the Company.


                              CERTAIN TRANSACTIONS

     With the exception of the current contractual relations between the Company
and ICI, as of the date of this Proxy Statement the Company has not entered
into any other contractual arrangements with related parties. There is not any


                                      -7-





other currently proposed transaction, or series of the same, to which the
Company is a party, in which the amount involved exceeds $60,000 and in which,
to the knowledge of the Company, any director, executive officer, nominee, 5%
Shareholder or any member of the immediate family of the foregoing persons, have
or will have a direct or indirect material interest.

     The officers and directors of the Company are engaged in other businesses,
either individually or through partnerships and corporations, in which they may
have an interest, hold an office or serve on the Boards of Directors. The
directors of the Company may have other business interests to which they may
devote a major or significant portion of their time. Certain conflicts of
interest, therefore, may arise between the Company and its directors and
officers. Such conflicts are intended to be resolved through the exercise by the
directors and officers of judgment consistent with their fiduciary duties to the
Company. The officers and directors of the Company intend to resolve such
conflicts in the best interests of the Company. The officers and directors will
devote their time to the affairs of the Company as necessary.


                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section 16(a) of the United States Securities and Exchange Act (the
"Exchange Act") requires the Company's directors and officers, and the persons
who beneficially own more than 10% of the Common Stock of the Company, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of all filed reports are required to be furnished to the
Company pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely
on the reports received by the Company and on the representations of the
reporting persons, the Company believes that these persons have complied with
all applicable filing requirements during the fiscal year ended March 31, 2003.


                 INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO
                            MATTERS TO BE ACTED UPON

     With the exception of the current director of the Company, and as of the
date of this Proxy Statement, there are no persons identified by management of
the Company who have an interest in the matters to be acted upon nor who are in
opposition to the matters to be acted upon.

     As of the date of this Proxy Statement there are no persons who have been
a director or officer of the Company since the beginning of the last fiscal
year, or are currently a director or officer of the Company, that oppose any
action to be taken by the Company.



                                   PROPOSAL 1

                       APPROVAL OF AN AMENDMENT TO THE
                ARTICLES OF INCORPORATION TO EFFECTUATE A CHANGE
                           IN NAME OF THE COMPANY


AMENDMENT TO ARTICLES AND NAME CHANGE

     In accordance with any decision in the future by the Board of Directors of
the Company to effectuate any change in the nature of the Company's business
operations, the Board of Directors has determined at this time that it may be in
the best interests of the Company and its Shareholders to seek approval for a
potential Name Change of the Company, and corresponding Amendment to the
Articles of the Company, to such resulting name as the Board of Directors of the
Company may finally determine, in its sole and absolute discretion, and in the
best interests of the Company.


                                      -8-





     The objective of the proposed change in corporate name of the Company, or
ability of the Board of Directors to change the corporate name to such other
resulting name is deemed necessary to more accurately reflect the proposed
business activities of the Company in its name. The Company believes that a name
change will better communicate to the public the Company's proposed and future
nature of business operations.

     The Board of Directors approved a resolution on June 16, 2003 to amend its
Articles in accordance with its proposed Name Change, or to such other name as
the Board of Directors of the Company may determine, from time to time, in its
sole and absolute discretion, subject to Shareholder approval. By approving this
proposal the Shareholders will authorize the Board of Directors to amend the
Company's Articles name as the Board of Directors may determine, attached as
Exhibit A hereto. The amendment presently embodies Article First changing the
text to:

     "The name of the corporation is."

     After any Name Change, it is anticipated that the Company's trading symbol
for the OTC Bulletin Board and BBX will be changed from "VGAC". After any Name
Change it is also anticipated that the Company's trading symbol for the
Frankfurt Stock Exchange will be changed from "VGA" (WKN: 936302).

     Management expects formal implementation of the proposed Name Change with
the Colorado Secretary of State to be completed as soon as practicable after the
effective date of the approval by the Shareholders and the corresponding
decision by the Board of Directors of the Company to effectuate any such Name
Change.

DESCRIPTION OF BUSINESS

     Vega-Atlantic Corporation, a Colorado corporation (the "Company") The
Company, currently trades on the OTC Bulletin Board under the symbol "VGAC" and
the Frankfurt Stock Exchange under the symbol "VGA" (WKN: 936302). The Company
has previously sought to develop a diversified international resources
exploration, development and production program, and was previously engaged in
the business of minerals exploration, acquisition and development within the
United States and worldwide. Management of the Company currently has an
investment opportunity and business acquisition under review and the Company
may, subject to due diligence, consummate the transaction. Depending on the
outcome of the investment opportunity and acquisition under review, the Company
may continue to assess, or proceed into business opportunities outside the
resource sector.

CURRENT BUSINESS OPERATIONS

Potential Acquisition Of Transax Limited

         The Board of Directors of the Company recently approved the
execution of an Agreement in Principle dated June 19, 2003 (the "Agreement"), as
entered into among the Company, Transax Limited, a Colorado corporation
("Transax"), and certain shareholders of Transax. The Agreement, which is
presently subject to standard conditions precedent including, without
limitation, prior Board of Directors' and shareholders' ratification, due
diligence and the negotiation and execution of a formal agreement evidencing the
same, among others, is expected to be formalized and consummated before the end
of August of 2003.

         In accordance with the terms and conditions of the proposed Agreement,
and again subject to numerous conditions precedent: (i) Transax is expected to
become a wholly-owned subsidiary of the Company through the merger of Transax
with a wholly-owned subsidiary of the Company; (ii) the Company is expected to
change its name and, as a result, its trading symbol, to reflect the business
concerns of Transax; and (iii) the Company is expected to adopt and implement a
new stock option plan for key personnel of the Company. In conjunction with the
terms and conditions of the proposed Agreement, the Company's resulting
business, upon consummation of the Agreement, will be comprised of Transax's
business assets at that time, which shall include all of the then business
assets of Transax's wholly-owned subsidiaries.

     As of the date of this Proxy Statement, the Company is undergoing due
diligence and final negotiations regarding execution of a formal agreement.


TRANSAX LIMITED CORPORATE PROFILE

     Transax Limited ("Transax") is a company  incorporated in the United States
of America and is the holding company of TDS Telecommunication Data Systems Ltda
("TDS").  TDS (being renamed "Transax Brasil Ltda") is a solutions  provider and
through a licensing  agreement  from Transax is using the  proprietary  software
trademarked MedLink currently  operating in Brazil,  employing some 40 staff and
contract personnel.

     The MedLink Solution has been specifically  designed for the healthcare and
health insurance industry to allow insurance  companies to connect to healthcare
providers and  electronically  undertake  authorization of health claims in real
time. A transaction fee is charged to the insurer for use of the MedLink system.
MedLink has been developed as a "Total  Connectivity"  solution where Transax is
able to provide an insurer with the ability to cost  effectively  process all of
the transactions generated regardless of location or method of generation.

     An in house authorisation system for 1300 healthcare provider locations was
developed by MedLink's  software  development team and sold to Sul America/Aetna
Life.

     Sul  America/Aetna  Life is the second  largest  private  health  insurance
company in Brazil.  This  stand-alone  system is currently in use and  processes
some 350,000 claims monthly.

     The  strategic  focus  of  Transax  is to  become a  premier  international
provider of  information  network  solutions  for the  healthcare  providers and
health insurance companies, enabling the real time automation of routine patient
eligibility,  verifications,   authorizations,  claims  processing  and  payment
functions that are currently performed manually.

PRIOR OPERATIONAL HISTORY

Tun Resources, Ltd.

     On May 2, 2000, the Company entered into a share purchase and sale
agreement with Golden Thunder Resources Ltd. ("Golden Thunder") to purchase from
Golden Thunder approximately 80% of the issued and outstanding shares of common
stock of Tun Resources Ltd., a Canadian corporation ("Tun Resources"), with an
option to purchase the remaining 20% of the issued and outstanding shares of Tun
Resources (the "Acquisition Agreement"). Pursuant to the terms of the
Acquisition Agreement, and extensions thereto, the Company issued 1,600,000
(400,000 pursuant to a reverse stock split of one-for-four unrelated to the
Reverse Stock Split discussed herein) shares of its restricted Common Stock to
Golden Thunder and provided approximately $604,500 of funds to Tun Resources.

     During the prior fiscal year and in accordance with the terms of the
Acquisition Agreement the Company was unable to timely provide the required
aggregate amount of $1,180,000 by February 15, 2001. On February 9, 2001, the
Company provided an amended letter of offer to Golden Thunder that outlined an
offer to: (i) purchase the remaining 20% of Tun Resources; (ii) repurchase all
of the Company's 1,600,000 shares of Common Stock from Golden


                                      -9-





Thunder; and (iii) request an extension to the funding commitment requirement
outlined in the Acquisition Agreement until such time as the shareholders of
Golden Thunder voted to accept or reject the offer (the "Letter Offer"). The
Letter Offer was presented to the shareholders of Golden Thunder for their
approval and such approval was not received.

     Tun Resources Litigation

     On July 8, 2001, the Company filed a Statement of Claim in the Supreme
Court of British Columbia naming Golden Thunder and Tun Resources as defendants
("Action No. 5013872"). The Company alleged in its Statement of Claim that
certain representations were made by such defendants to the Company under the
Acquisition Agreement and otherwise as follows: (i) Tun Resources had good and
marketable title to its assets; (ii) the consideration paid by the Company was
good and valuable consideration for the acquisition of the shares in Tun
Resources; (iii) the intercorporate loan financing, which was to be provided by
financing arranged by private investments and, therefore, the joint ventures,
were marketable; and (iv) the control of Tun Resources would be transferred to
the Company upon closing of the Acquisition Agreement. The Company alleged in
its Statement of Claim that such representations were false and untrue and that
the defendants made the representations fraudulently or negligently knowing them
to be untrue, or recklessly without caring whether they were true or false, and
that: (i) the title Tun Resources had to the assets was not good and marketable
and was considerably lower in value than represented to the Company; (ii) the
consideration paid by the Company to acquire the shares of Tun Resources was
excessive and not good and valuable consideration; (iii) the intercorporate loan
financing could not be raised in the manner agreed upon by the Company and the
defendants; and (iv) the Boards of Directors of Golden Thunder and Tun Resources
refused or neglected to replace the Board of Directors of Tun Resources with the
board of directors of Golden Thunder. The Company further alleged in its
Statement of Claim that: (i) the defendants made such representations to the
Company in order to induce the Company to enter into the Acquisition Agreement;
(ii) the Company reasonably relied upon the representations made to it by the
Defendants; and (iii) such misrepresentations were breaches of material terms of
the Acquisition Agreement and have caused the Company loss and damages. The
Company sought general and special damages in excess of $800,000.00.

     On August 2, 2001, Tun Resources and Golden Thunder filed their Statement
of Defense in which they alleged that the Company breached the Acquisition
Agreement by its failure to provide funding in the amount of $1,180,000 and that
such failure to provide the required funding adversely affected the value of
assets to be purchased by the Company.

     On November 1, 2002, the Company, Tun Resources and Golden Thunder entered
into a settlement agreement and release of all claims (the "Settlement
Agreement"). Pursuant to the terms of the Settlement Agreement: (i) Tun
Resources and Golden Thunder paid to the Company $150,000.00; (ii) the Company
released Tun Resources and Golden Thunder from any and all claims arising
directly or indirectly from Action No. 5013872; and (iii) Golden Thunder
returned to the Company its stock certificate evidencing the 1,600,000 (400,000
pursuant to a reverse stock split of one-for-four unrelated to the Reverse Stock
Split discussed herein) shares of restricted Common Stock, which were cancelled.

The Ailaoshan/Xiaoshuijing Gold Project

     On May 4, 2000, the Company entered into a letter agreement with the No. 1
Geological Brigade of the Yunnan Bureau of Geology and Mineral Resources of


                                      -10-





Qujing City, Yunnan Province, China (the "Letter Agreement"), whereby the
Company acquired the right to acquire an approximate 70% interest in the
Ailaoshang gold concession and prospect with claims that include the
Xiaoshuijing gold resource located in the Chuxion Prefecture, Yunnan Province,
China. Management plans to conduct future due diligence on the gold prospect in
order to provide the basis for negotiation of the final terms of a proposed
joint venture agreement; should the due diligence warrant continuing such
negotiations. According to the terms of the Letter Agreement the Company must
contribute and invest up to $2,500,000 to expand the gold prospect and increase
mine production.

     As of the date of this Proxy Statement management of the Company does not
believe that a definitive agreement will be consummated nor that any other nor
that any other China-based venues will be pursued.

BOARD RECOMMENDATION

     Based upon review of a wide variety of factors considered in connection
with its evaluation of the proposed change in corporate name, the Board of
Directors of the Company believes that it would be in the best interests of the
Company and its Shareholders to effectuate a proposed Name Change to such
resulting name as the Board of Directors of the Company may determine, in its
sole and absolute discretion, and in the best interests of the Company. Approval
of the proposed Amendment to the Articles of the Company requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to notice of, and to vote at, the Meeting.

     The Board of Directors recommends a vote "FOR" the approval of the proposed
Amendment to the Articles to effectuate a proposed Name Change of the Company.


                                   PROPOSAL II

                      APPROVAL OF THE STOCK OPTION PLAN FOR
                          KEY PERSONNEL OF THE COMPANY

STOCK OPTION PLAN

     On June 16, 2003, the Board of Directors of the Company unanimously
approved and adopted a Stock Option Plan, a copy of which is attached hereto as
Exhibit B. The purpose of the proposed Stock Option Plan is to advance the
interests of the Company and its Shareholders by affording key personnel of the
Company an opportunity for investment in the Company and the incentive
advantages inherent in stock ownership in the Company. Pursuant to the
provisions of the Stock Option Plan stock options (the "Stock Options") will be
granted only to key personnel of the Company; generally defined as a person
designated by the Board of Directors upon whose judgment, initiative and efforts
the Company may rely including any director, officer, employee or consultant of
the Company.

     The Stock Option Plan is to be administered by the Board of Directors of
the Company, which shall determine: (i) the persons to be granted Stock Options
under the Stock Option Plan; (ii) the number of shares subject to each Stock
Option and the exercise price of each Stock Option; and (iii) whether the Stock
Option shall be exercisable at any time during the option period of up to ten


                                      -11-





years or whether the Stock Option shall be exercisable in installments or by
vesting only. The Stock Option Plan provides authorization to the Board of
Directors to grant Stock Options to purchase a total number of shares of Common
Stock of the Company, not to presently exceed 4,500,000 shares (post-Reverse
Stock Split), as at the date of adoption by the Board of Directors of the Stock
Option Plan. At the time a Stock Option is granted under the Stock Option Plan
the Board of Directors shall fix and determine the exercise price at which
shares of Common Stock of the Company may be acquired; provided, however, that
any such exercise price shall not be less than that permitted under the rules
and policies of any stock exchange or over-the-counter market which is
applicable to the Company at that time.

     In the event that an optionee who is a director or officer of the Company,
ceases to serve in that position, any Stock Option held by such optionee
generally may be exercisable within up to 90 calendar days after the effective
date that such position ceases, and after such 90-day period any unexercised
Stock Option shall expire. In the event that an optionee, who is an employee or
consultant of the Company, ceases to be employed by the Company, any Stock
Option held by such optionee generally may be exercisable within up to 60
calendar days (or up to 30 calendar days where the optionee provided only
investor relations services to the Company) after the effective date that such
employment ceases, and after such 60- or 30-day period any unexercised Stock
Option shall expire.

     No Stock Options granted under the Stock Option Plan will be transferable
by an optionee, and each Stock Option will be exercisable during the lifetime of
the optionee subject to the option period of up to 10 years and the limitations
described above. Any Stock Option held by an optionee at the time of his death
may be exercised by his estate within 1 year of his death or such longer period
as the Board of Directors may determine.

     The exercise price of a Stock Option granted pursuant to the Stock Option
Plan shall be paid in cash or certified funds upon exercise of the Stock Option.

Incentive Stock Options

     The Stock Option Plan further provides that, subject to the provisions of
the Stock Option Plan and prior Shareholder approval, the Board of Directors may
grant to any key personnel of the Company who is an employee eligible to receive
Stock Options one or more incentive Stock Options to purchase the number of
shares of Common Stock allotted by the Board of Directors (the "Incentive Stock
Options"). The option price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall be not less than fair market value
of a share of Common Stock on the date of grant of the Incentive Stock Option.
In accordance with the terms of the proposed Stock Option Plan, "fair market
value" of an Incentive Stock Option as of any date shall not be less than the
closing price for the shares of Common Stock on the last trading day preceding
the date of grant. The option term of each Incentive Stock Option shall be
determined by the Board of Directors, which shall not commence sooner than from
the date of grant and shall terminate no later than up to 10 years from the date
of grant of the Incentive Stock Option, subject to possible earlier termination
as described above.

     As of the date of this Proxy Statement no Stock Options nor Incentive
Stock Options under the Stock Option Plan have been granted (which does not
include those stock options previously granted). See " - Non-Qualified Stock


                                      -12-





Option Plan" below. In accordance with the Company's proposed Stock Option Plan,
and subject to approval by the Shareholders, the Company anticipates filing with
the Commission registration statements on "Form S-8 - For Registration Under the
Securities Act of 1933 of Securities to Be Offered to Employees Pursuant to
Employee Benefit Plans" (each an "S-8") registering Stock Options and Incentive
Stock Options under its proposed Stock Option Plan in the amount of up to
4,500,000 post-Reverse Stock Split shares at various exercise prices. Upon
approval by the Shareholders of the proposed Stock Option Plan the Board of
Directors will be authorized, without further Shareholder approval, to grant
such Stock Options from time to time to acquire up to an aggregate of up to
4,500,000 shares of the Company's restricted Common Stock.

NON-QUALIFIED STOCK OPTION PLAN

     On May 1, 2000, the then Board of Directors of the Company adopted a
Non-Qualified Stock Option Plan (the "Non-Qualified SOP"), which provided for
the grant of 500,000 options to purchase an aggregate of 500,000 shares of
restricted Common Stock at $1.00 per share.

     During the prior fiscal years 2001 and 2002, the then Board of Directors
granted 487,500 stock options pursuant to the Non-Qualified SOP to acquire up to
an aggregate of 487,500 shares of restricted Common Stock at $1.00 per share. No
stock options as granted under the Non-Qualified SOP were exercised by the
grantees.

     Subsequent to December 31, 2002, and as of the date of this Proxy
Statement, the Board of Directors of the Company voted to terminate the
Non-Qualified SOP and to unilaterally cancel the 487,5000 stock options as
granted. The Board of Directors based its decision regarding cancellation of the
stock options on the fact that the Non-Qualified SOP and subsequent grants of
stock options were done at a time when management anticipated that the Company
would have a viable and ongoing business development venture relating to certain
mining claims. The grantees did not perform the services intended as the gold
mining claims did not contain any gold and associated business operations
failed. The business venture was subject to litigation (as described above) and
is no longer being pursued by the Company.

BOARD RECOMMENDATION

     Based upon review of a wide variety of factors considered in connection
with its evaluation of the provisions and terms of the proposed Stock Option
Plan, the Board of Directors of the Company believes that it would be in the
best interests of the Company and its Shareholders to adopt the proposed Stock
Option Plan. Approval of the Stock Option Plan requires the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock entitled to
notice of, and to vote at, the Meeting.

     The Board of Directors recommends a vote "FOR" the approval of the proposed
Stock Option Plan for key personnel of the Company.


                                  PROPOSAL III

              RATIFICATION OF THE PRIOR ACTIONS BY SHAREHOLDERS OF
                THE COMPANY PURSUANT TO WRITTEN CONSENT APPROVING
                     A REVERSE STOCK SPLIT OF ONE-FOR-TWENTY
                     OF THE COMPANY'S ISSUED AND OUTSTANDING
                             SHARES OF COMMON STOCK


PRIOR SHAREHOLDER APPROVAL OF THE REVERSE STOCK SPLIT

     The Board of Directors of the Company, at a previous meeting, authorized
and approved, subject to Shareholder approval, a Reverse Stock Split of up to
one-for-twenty of the Company's issued and outstanding shares of Common Stock.
Therefore, an Information Statement pursuant to Section 14(c) of the Exchange
Act (the "Information Statement") was prepared and filed with the Securities and
Exchange Commission on October 17, 2002 and amended December 16, 2002.


                                      -13-





     The Information Statement was circulated to the Shareholders of the Company
in connection with the taking of corporate action without a meeting upon the
written consent of 10 or less shareholders then holding of record a majority of
the outstanding shares of the Company's Common Stock (the "Written Consent"). As
of November 30, 2002 (the "Record Date"), there were 22,532,110 shares of the
Company's Common Stock issued and outstanding. The names of the shareholders who
signed the Written Consent and their respective equity ownership of the Company
were as follows: (i) TriStar Financial Services, Inc., holding of record
1,216,214 shares of Common Stock (5.40%); (ii) Investor Communications
International, Inc., holding of record 6,071,244 shares of Common Stock
(26.94%); (iii) Alexander W. Cox, holding of record 4,323,300 shares of Common
Stock (19.19%); and (iv) Brent Pierce, holding of record 1,406,247 shares of
Common
Stock (6.24%).

     The matters upon which action was taken pursuant to the Written Consent by
the shareholders dated March 25, 2003 included the approval and authorization
for the Board of Directors to effect the Reverse Stock Split of one-for-twenty
of the Company's outstanding Common Stock, which was effected by NASDAQ on
approximately April 2, 2003.

     Subsequent to the effectuation of the Reverse Stock Split, the Company
deteremined that applicable Colorado law requires the written consent of all
shareholders in the event that written consents are utilized to obtain
shareholder approval in lieu of a shereholder meeting. Therefore, the Board of
Directors has decided that it would be prudent to have the Shareholders of the
Company ratify the prior actions of the Shareholders taken pursuant to the
Written Consent approving the Reverse Stock split and, as a result, has directed
the filing of the Proxy Statement and the Meeting of the Shareholders.

PURPOSES AND EFFECTS OF THE REVERSE STOCK SPLIT

     The Board of Directors approved the Reverse Stock Split based upon its
judgment that the Reverse Stock Split was in the best interests of the Company
and its Shareholders, and that the Reverse Stock Split would result in the
greatest marketability and liquidity of the Company's Common Stock. Effectuation
of the Reverse Stock Split reduced the number of issued and outstanding shares
of Common Stock from an aggregate of 22,532,110 shares to approximately
1,126,606 shares of Common Stock. The Common Stock is currently listed for
trading on the OTC Bulletin Board under the symbol "VGAC" and on the Frankfurt
Stock Exchange under the symbol "VGA".

     On the Record Date for the Written Consent, the reported closing price of
the Common Stock on the OTC Bulletin Board was $0.14 per share. The Board of
Directors of the Company has determined to use its best efforts in the future to
cause the Company's shares of Common Stock to be approved for trading on the
NASDAQ SmallCap Market (the "SmallCap Market") or on another more senior
exchange. The Company currently does not qualify for admission to the SmallCap
Market because its per-share price of $0.14 is below the present $3.00 level
required


                                      -14-





for admission to the SmallCap Market. Furthermore, the Company's net present
tangible assets and shareholders' equity are below the minimum requirements of
$4,000,000 and $2,000,000, respectively, for inclusion on the SmallCap Market.
Management believes that, based on future generation of revenues and offerings
of Common Stock, the Company may eventually meet the net tangible assets and
shareholder equity requirements imposed by the SmallCap Market. Management
intended to effectuate the Reverse Stock Split at a level of one-to-twenty which
it believed would be sufficient to enable the Company in the future to meet such
requirements for admission for trading on the SmallCap Market or on another more
senior exchange. The Board of Directors further believed that the Reverse Stock
Split would help result in attaining both of its goals of achieving a per-share
price in excess of $3.00 and increasing the marketability and liquidity of the
Company's Common Stock.

     Additionally, the Board of Directors believed that the then per-share
price of the Common Stock had limited the effective marketability of the Common
Stock because of the reluctance of many brokerage firms and institutional
investors to recommend lower-priced stocks to their clients or to hold them in
their own portfolios. Certain policies and practices of the securities industry
may tend to discourage individual brokers within those firms from dealing in
lower-priced stocks. Some of those policies and practices involve time-consuming
procedures that make the handling of lower priced stocks economically
unattractive. The brokerage commission on a sale of lower-priced stock may also
represent a higher percentage of the sale price than the brokerage commission on
a higher priced issue. Any reduction in brokerage commissions resulting from the
Reverse Stock Split may be offset, however, in whole or in part, by increased
brokerage commissions required to be paid by stockholders selling "odd lots"
created by such Reverse Stock Split.

     The Board of Directors believed that the Reverse Stock Split did not and
will not result in a significant reduction in the number of holders of the
Company's Common Stock, and did not intend to effect any Reverse Stock Split
that would result in a reduction in the number of holders large enough to
jeopardize listing of the Common Stock on the SmallCap Market or the Company
remianing subject to the periodic reporting requirements of the Securities and
Exchange Commission. In the event the Company achieves a per-share price in
excess of $3.00 thus allowing the possibility of listing on the Small Cap
Market, the Company would continue as a "penny stock" and subject to the penny
stock rules and regulations as well as the concerns discussed above.

     The Reverse Stock Split had the following effects upon the number of shares
of Common Stock issued and outstanding (22,532,110 shares as of the Record Date)
and had no effect upon the number of authorized shares of Common Stock. The
Common Stock continues to be $0.00001 par value Common Stock following the
Reverse Stock Split, and the number of shares of Common Stock outstanding has
been be reduced. The following example is intended for illustrative purposes.




     Reverse Stock               Common Stock             Authorized                  Unissued Stock
         Split                   Outstanding             Common Stock             Before          After
     _____________               ____________            ____________          __________________________
                                                                                 

        1 for 20                  1,126,606               100,000,000          77,467,890      98,873,394




     At the effective date of the Reverse Stock Split each share of the Common
Stock issued and outstanding immediately prior thereto (the "Old Common Stock")
was reclassified as and changed into the appropriate fraction of a share of the
Company's Common Stock, $0.00001 par value per share (the "New Common Stock"),
subject to the treatment of fractional share interests as described below.
Shortly after the effective date of the Reverse Stock Split the Company sent
transmittal forms to the holders of the Old Common Stock to be used in
forwarding their certificates


                                      -15-





formerly representing shares of Old Common Stock for surrender and exchange for
certificates representing whole shares of New Common Stock. No certificates
representing fractional share interests in the New Common Stock were issued, and
no such fractional share interest entitled the holder thereof to vote or to any
rights of a shareholder of the Company. In lieu of any such fractional share
interest (irrespective of the amount of such fractional share interest), all
holders of Old Common Stock who would otherwise be entitled to receive a
fractional share of New Common Stock received in lieu one full share upon
surrender of certificates formerly representing Old Common Stock held by such
holder. As of the date of this Statement, the Company has issued an aggregate of
95 voting common shares in connection therewith.

 Federal Income Tax Consequences of the Reverse Stock Split

     The following is a summary of the material federal income tax consequences
of the previous Reverse Stock Split. This summary does not purport to be
complete and does not address the tax consequences to holders that are subject
to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
and proposed regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are subject
to change, possibly with retroactive effect, and assumes that the New Common
Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock were advised to
consult their own tax advisers regarding the federal income tax consequences of
the Reverse Stock Split in light of their personal circumstances and the
consequences under state, local and foreign tax laws applicable to them.

     1.   the Reverse Stock Split qualifies as a recapitalization described
          in Section 368(a)(1)(E) of the Code;

     2.   no gain or loss will be recognized by the Company in connection with
          the Reverse Stock Split;

     3.   no gain or loss will be recognized by a shareholder who exchanged all
          of his shares of Old Common Stock solely for shares of New Common
          Stock;

     4.   the aggregate basis of the shares of New Common Stock received in the
          Reverse Stock Split (including any whole shares received in lieu of
          fractional shares) is the same as the aggregate basis of the shares of
          Old Common Stock surrendered in exchange therefore; and

     5.   the hold period of the shares of New Common Stock received in the
          Reverse Stock Split (including any whole shares received in lieu of
          fractional shares) includes the hold period of the shares of Old
          Common Stock surrendered in exchange therefore.

THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY,
EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OWN TAX
ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT,
INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL,
FOREIGN OR OTHER TAXING JURISDICTION APPLICABLE TO THEM.


                                      -16-





BOARD RECOMMENDATION

     Based upon review of a wide variety of factors considered in connection
with its evaluation of the Reverse Stock Split, the Board of Directors of the
Company believes that it would be in the best interests of the Company and its
shareholders that the prior actions by Shareholders pursuant to the Written
Consent approving the Reverse Stock Split be ratified. Ratification of the prior
actions by Shareholders pursuant to the Written Consent approving the Reverse
Stock Split requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to notice of, and to vote at, the
Meeting.

     The Board of Directors recommends a vote "FOR" the ratification of the
prior actions by Shareholders pursuant to the Written Consent approving the
Reverse Stock Split.


                                     GENERAL

OTHER MATTERS

     The Board of Directors does not know of any matters that are to be
presented at the Meeting of the Shareholders other than those stated in the
Notice of Meeting and referred to in this Proxy Statement. If any other matters
should properly come before the Meeting, it is intended that the Proxies in the
accompanying form will be voted as the persons named therein may determine in
their discretion.

SHAREHOLDER PROPOSALS

     If any shareholder of the Company intends to present a proposal for
consideration at the Meeting of Shareholders and desires to have such proposal
included in the Proxy Statement and forms of Proxy distributed by the Board of
Directors with respect to such Meeting, such proposal must be received at the
Company's offices, 435 Martin Street, Suite 2000, Blaine, Washington 98320,
Attention: Secretary, not later than July 30, 2003.

                                          By Order of the Board of Directors


                                          Grant Atkins


                                      -17-





                                    EXHIBIT A

             ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION

                                       OF

                            VEGA-ATLANTIC CORPORATION

     FIRST: The name of the Corporation is Vega-Atlantic Corporation.

     SECOND: Immediately upon the effectiveness of this amendment to the
Corporation's Articles of Incorporation pursuant to the Colorado Business
Corporation Act (the "Effective Time"), the name of the Corporation shall be
changed to ".".

     This Amendment shall be effectuated by striking in its entirety Article
First by substituting in lieu thereof the following:

     "FIRST: The name of the Corporation is .".

     THIRD: By special meeting held by the Board of Directors of the Corporation
on June 16, 2003, pursuant to and in accordance with Sections 7-108-202 and
7-110-103 of the Colorado Business Corporation Act, the Board of Directors of
the Corporation duly adopted and recommended the amendment described above to
the Corporation's Shareholders for their approval.

     FOURTH: Notice having been properly given to the Shareholders in accordance
with Sections 7-107-105 and 7-110-103, at a meeting of Shareholders held on
August 8, 2003, the number of votes cast for the amendment by the each voting
group entitled to vote on the amendment was sufficient for approval by that
voting group.

     IN WITNESS WHEREOF, Vega-Atlantic Corporation has caused these presents to
be signed in its name and on its behalf by Grant Atkins, its President, and its
corporate seal to be hereunder affixed on this __ day of August, 2003, and its
President acknowledges that these Articles of Amendment are the act and deed of
Vega-Atlantic Corporation and, under the penalties of perjury, that the matters
and facts set forth herein with respect to authorization and approval are true
in all material respects to the best of his knowledge, information and belief.


                                         VEGA-ATLANTIC CORPORATION


                                         By:____________________________
                                              Grant Atkins, President


                                      -1-





                                    EXHIBIT B
                                STOCK OPTION PLAN
                          OF VEGA-ATLANTIC CORPORATION



                                ________________



                               STOCK OPTION PLAN


                                      For:




                           VEGA-ATLANTIC CORPORATION
                           _________________________





                           VEGA-ATLANTIC CORPORATION
                         435 Martin Street, Suite 2000
                       Blaine, Washington, U.S.A., 98230

                                ________________






                            VEGA-ATLANTIC CORPORATION
                            _________________________

                                STOCK OPTION PLAN
                                =================



     This stock option plan (the "PLAN") is adopted in consideration of services
rendered and to be rendered by key personnel to Vega-Atlantic Corporation, its
subsidiaries and affiliates.


1.        DEFINITIONS.


     The terms used in this Plan shall, unless otherwise indicated or required
by the particular context, have the following meanings:


     BOARD:              The Board of Directors of Vega-Atlantic Corporation.



     COMMON STOCK:       The U.S. $0.001 par value common stock of
                         Vega-Atlantic Corporation.



     COMPANY:            Vega-Atlantic Corporation, a corporation incorporated
                         under the laws of the State of Colorado, U.S.A., and
                         any successors in interest by merger, operation of law,
                         assignment or purchase of all or substantially all of
                         the property, assets or business of the Company.


     DATE OF GRANT:      The date on which an Option (see hereinbelow) is
                         granted under the Plan.



     FAIR MARKET VALUE:  The Fair Market Value of the Option Shares. Such Fair
                         Market Value as of any date shall be reasonably
                         determined by the Board; provided, however, that if
                         there is a public market for the Common Stock, the Fair
                         Market Value of the Option Shares as of any date shall
                         not be less than the closing price for the Common Stock
                         on the last trading day preceding the date of grant;
                         provided, further, that if the Company's shares are not
                         listed on any exchange the Fair Market Value of such
                         shares shall not be less than the average of the means
                         between the bid and asked prices quoted on each such
                         date by any two independent persons or entities making
                         a market for the Common Stock, such persons or entities
                         to be selected by the Board. Fair Market Value shall be





                                      -2-


                         determined without regard to any restriction other than
                         a restriction which, by its terms, will never lapse.


     INCENTIVE STOCK
     OPTION:             An Option as described in Section 9  hereinbelow
                         intended to qualify under section 422 of the United
                         States INTERNAL REVENUE CODE OF 1986, as amended.


     KEY PERSON:         A person designated by the Board upon whose judgment,
                         initiative and efforts the Company or a Related Company
                         may rely, who shall include any Director, Officer,
                         employee or consultant of the Company. A Key Person may
                         include a corporation that is wholly-owned and
                         controlled by a Key Person who is eligible for an
                         Option grant, but in no other case may the Company
                         grant an option to a legal entity other than an
                         individual.


     OPTION:             The rights granted to a Key Person to purchase Common
                         Stock pursuant to the terms and conditions of an Option
                         Agreement (see hereinbelow).


     OPTION AGREEMENT:   The written agreement (and any amendment or supplement
                         thereto) between the Company and a Key Person
                         designating the terms and conditions of an Option.


     OPTION SHARES:      The shares of Common Stock underlying an Option granted
                         to a Key Person.



     OPTIONEE:           A Key Person who has been granted an Option.



     RELATED COMPANY:    Any subsidiary or affiliate of the Company or of any
                         subsidiary of the Company. The determination of whether
                         a corporation is a Related Company shall be made
                         without regard to whether the entity or the
                         relationship between the entity and the Company now
                         exists or comes into existence hereafter.


2.        PURPOSE AND SCOPE.


          (a)       The purpose of the Plan is to advance the interests of the
                    Company and its stockholders by affording Key Persons, upon
                    whose judgment, initiative and efforts the Company may rely
                    for the successful conduct of their businesses an



                                      -3-


                    opportunity for investment in the Company and the incentive
                    advantages inherent in stock ownership in the Company.


          (b)       This Plan authorizes the Board to grant Options to purchase
                    shares of Common Stock to Key Persons selected by the Board
                    while considering criteria such as employment position or
                    other relationship with the Company, duties and
                    responsibilities, ability, productivity, length of service
                    or association, morale, interest in the Company,
                    recommendations by supervisors and other matters.


3.        ADMINISTRATION OF THE PLAN.


     The Plan shall be administered by the Board. The Board shall have the
authority granted to it under this section and under each other section of the
Plan.


     In accordance with and subject to the provisions of the Plan, the Board is
hereby authorized to provide for the granting, vesting, exercise and method of
exercise of any Options all on such terms (which may vary between Options and
Optionees granted from time to time) as the Board shall determine. In addition,
and without limiting the generality of the foregoing, the Board shall select the
Optionees and shall determine: (i) the number of shares of Common Stock to be
subject to each Option, however, in no event may the maximum number of shares
reserved for any one individual exceed 15% of the issued and outstanding share
capital of the Company; (ii) the time at which each Option is to be granted;
(iii) the purchase price for the Option Shares; (iv) the Option period; and (v)
the manner in which the Option becomes exercisable or terminated. In addition,
the Board shall fix such other terms of each Option as it may deem necessary or
desirable. The Board may determine the form of Option Agreement to evidence each
Option.


     The Board from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company subject to the rules and policies of any exchange or
over-the-counter market which is applicable to the Company.


     The Board may from time to time make such changes in and additions to the
Plan as it may deem proper, subject to the prior approval of any exchange or
over-the-counter market which is applicable to the Company, and in the best
interests of the Company; provided, however, that no such change or addition
shall impair any Option previously granted under the Plan. If the shares are not
listed on any exchange, then such approval is not necessary.


     Each determination, interpretation or other action made or taken by the
Board shall be final, conclusive and binding on all persons, including without



                                      -4-


limitation, the Company, the stockholders, directors, officers and employees of
the Company and the Related Companies, and the Optionees and their respective
successors in interest.


4.        THE COMMON STOCK.


     Save and except as may be determined by the Board at a duly constituted
meeting of the Board as set forth hereinbelow, the Board is presently authorized
to appropriate, grant Options, issue and sell for the purposes of the Plan, a
total number of shares of the Company's Common Stock not to exceed 4,500,000, or
the number and kind of shares of Common Stock or other securities which in
accordance with Section 10 shall be substituted for the shares or into which
such shares shall be adjusted. Save and except as may otherwise be determined by
the disinterested approval of the shareholders of the Company at any duly called
meeting of the shareholders of the Company, at any duly constituted Board
meeting the Board may determine that the total number of shares of the Company's
Common Stock which may be reserved for issuance for Options granted and to be
granted under this Plan, from time to time, may be to the maximum extent of up
to 100% of the Company's issued and outstanding Common Stock as at the date of
any such meeting of the Board. In this regard, and subject to the prior
disinterested approval of the shareholders of the Company at any duly called
meeting of the shareholders of the Company, the total number of shares of the
Company's Common Stock which may be reserved for issuance for Options granted
and to be granted under this Plan, from time to time, may be increased to
greater than 100% of the Company's issued and outstanding Common Stock as at the
date of notice of any such meeting of the shareholders of the Company whereat
such disinterested shareholders' approval is sought and obtained by the Company.
All or any unissued shares subject to an Option that for any reason expires or
otherwise terminates may again be made subject to Options under the Plan.


5.        ELIGIBILITY.


     Options will be granted only to Key Persons. Key Persons may hold more than
one Option under the Plan and may hold Options under the Plan and options
granted pursuant to other plans or otherwise.


6.        OPTION PRICE AND NUMBER OF OPTION SHARES.


     The Board shall, at the time an Option is granted under this Plan, fix and
determine the exercise price at which Option Shares may be acquired upon the
exercise of such Option; provided, however, that any such exercise price shall
not be less than that, from time to time, permitted under the rules and policies
of any exchange or over-the-counter market which is applicable to the Company.


     The number of Option Shares that may be acquired under an Option granted to
an Optionee under this Plan shall be determined by the Board as at the time the



                                      -5-


Option is granted; provided, however, that the aggregate number of Option Shares
reserved for issuance to any one Optionee under this Plan, or any other plan of
the Company, shall not exceed 15% of the total number of issued and outstanding
Common Stock of the Company.


7.        DURATION, VESTING AND EXERCISE OF OPTIONS.


          (a)       The option period shall commence on the Date of Grant and
                    shall be up to 10 years in length subject to the limitations
                    in this Section 7 and the Option Agreement.


          (b)       During the lifetime of the Optionee the Option shall be
                    exercisable only by the Optionee. Subject to the limitations
                    in paragraph (a) hereinabove, any Option held by an Optionee
                    at the time of his death may be exercised by his estate
                    within one year of his death or such longer period as the
                    Board may determine.


          (c)       The Board may determine whether an Option shall be
                    exercisable at any time during the option period as provided
                    in paragraph (a) of this Section 7 or whether the Option
                    shall be exercisable in installments or by vesting only. If
                    the Board determines the latter it shall determine the
                    number of installments or vesting provisions and the
                    percentage of the Option exercisable at each installment or
                    vesting date. In addition, all such installments or vesting
                    shall be cumulative. In this regard the Company will be
                    subject, at all times, to any rules and policies of any
                    exchange or over-the-counter market which is applicable to
                    the Company and respecting any such required installment or
                    vesting provisions for certain or all Optionees.


          (d)       In the case of an Optionee who is a director or officer of
                    the Company or a Related Company, if, for any reason (other
                    than death or removal by the Company or a Related Company),
                    the Optionee ceases to serve in that position for either the
                    Company or a Related Company, any option held by the
                    Optionee at the time such position ceases or terminates may,
                    at the sole discretion of the Board, be exercised within up
                    to 90 calendar days after the effective date that his
                    position ceases or terminates (subject to the limitations at
                    paragraph (a) hereinabove), but only to the extent that the
                    option was exercisable according to its terms on the date
                    the Optionee's position ceased or terminated. After such
                    90-day period any unexercised portion of an Option shall
                    expire.


          (e)       In the case of an Optionee who is an employee or consultant
                    of the Company or a Related Company, if, for any reason
                    (other than death or termination for cause by the Company or
                    a Related Company), the Optionee ceases to be employed by
                    either the Company or a Related Company, any option held by



                                      -6-


                    the Optionee at the time his employment ceases or terminates
                    may, at the sole discretion of the Board, be exercised
                    within up to 60 calendar days (or up to 30 calendar days
                    where the Optionee provided only investor relations services
                    to the Company or a Related Company) after the effective
                    date that his employment ceased or terminated (that being up
                    to 60 calendar days (or up to 30 calendar days) from the
                    date that, having previously provided to or received from
                    the Company a notice of such cessation or termination, as
                    the case may be, the cessation or termination becomes
                    effective; and subject to the limitations at paragraph (a)
                    hereinabove), but only to the extent that the option was
                    exercisable according to its terms on the date the
                    Optionee's employment ceased or terminated. After such
                    60-day (or 30-day) period any unexercised portion of an
                    Option shall expire.


          (f)       In the case of an Optionee who is an employee or consultant
                    of the Company or a Related Company, if the Optionee's
                    employment by the Company or a Related Company ceases due to
                    the Company's termination of such Optionee's employment for
                    cause, any unexercised portion of any Option held by the
                    Optionee shall immediately expire. For this purpose "cause"
                    shall mean conviction of a felony or continued failure,
                    after notice, by the Optionee to perform fully and
                    adequately the Optionee's duties.


          (g)       Neither the selection of any Key Person as an Optionee nor
                    the granting of an Option to any Optionee under this Plan
                    shall confer upon the Optionee any right to continue as a
                    director, officer, employee or consultant of the Company or
                    a Related Company, as the case may be, or be construed as a
                    guarantee that the Optionee will continue as a director,
                    officer, employee or consultant of the Company or a Related
                    Company, as the case may be.


          (h)       Each Option shall be exercised in whole or in part by
                    delivering to the office of the Treasurer of the Company
                    written notice of the number of shares with respect to which
                    the Option is to be exercised and by paying in full the
                    purchase price for the Option Shares purchased as set forth
                    in Section 8.


8.        PAYMENT FOR OPTION SHARES.


     In the case of all Option exercises, the purchase price shall be paid in
cash or certified funds upon exercise of the Option.




                                      -7-


9.        INCENTIVE STOCK OPTIONS.


          (a)       The Board may, from time to time, and subject to the
                    provisions of this Plan and such other terms and conditions
                    as the Board may prescribe, grant to any Key Person who is
                    an employee eligible to receive Options one or more
                    Incentive Stock Options to purchase the number of shares of
                    Common Stock allotted by the Board.


          (b)       The Option price per share of Common Stock deliverable upon
                    the exercise of an Incentive Stock Option shall be no less
                    than the Fair Market Value of a share of Common Stock on the
                    Date of Grant of the Incentive Stock Option.


          (c)       The Option term of each Incentive Stock Option shall be
                    determined by the Board and shall be set forth in the Option
                    Agreement, provided that the Option term shall commence no
                    sooner than from the Date of Grant and shall terminate no
                    later than 10 years from the Date of Grant and shall be
                    subject to possible early termination as set forth in
                    Section 7 hereinabove.


10.       CHANGES IN COMMON STOCK, ADJUSTMENTS, ETC.


     In the event that each of the outstanding shares of Common Stock (other
than shares held by dissenting stockholders which are not changed or exchanged)
should be changed into, or exchanged for, a different number or kind of shares
of stock or other securities of the Company, or, if further changes or exchanges
of any stock or other securities into which the Common Stock shall have been
changed, or for which it shall have been exchanged, shall be made (whether by
reason of merger, consolidation, reorganization, recapitalization, stock
dividends, reclassification, split-up, combination of shares or otherwise), then
there shall be substituted for each share of Common Stock that is subject to the
Plan, the number and kind of shares of stock or other securities into which each
outstanding share of Common Stock (other than shares held by dissenting
stockholders which are not changed or exchanged) shall be so changed or for
which each outstanding share of Common Stock (other than shares held by
dissenting stockholders) shall be so changed or for which each such share shall
be exchanged. Any securities so substituted shall be subject to similar
successive adjustments.


     In the event of any such changes or exchanges, the Board shall determine
whether, in order to prevent dilution or enlargement of rights, an adjustment
should be made in the number, kind, or option price of the shares or other
securities then subject to an Option or Options granted pursuant to the Plan and
the Board shall make any such adjustment, and such adjustments shall be made and
shall be effective and binding for all purposes of the Plan.




                                      -8-


11.       RELATIONSHIP OF EMPLOYMENT.


     Nothing contained in the Plan, or in any Option granted pursuant to the
Plan, shall confer upon any Optionee any right with respect to employment by the
Company, or interfere in any way with the right of the Company to terminate the
Optionee's employment or services at any time.


12.       NON-TRANSFERABILITY OF OPTION.


     No Option granted under the Plan shall be transferable by the Optionee,
either voluntarily or involuntarily, except by will or the laws of descent and
distribution, and any attempt to do so shall be null and void.


13.       RIGHTS AS A STOCKHOLDER.


     No person shall have any rights as a stockholder with respect to any share
covered by an Option until that person shall become the holder of record of such
share and, except as provided in Section 10, no adjustments shall be made for
dividends or other distributions or other rights as to which there is an earlier
record date.


14.       SECURITIES LAWS REQUIREMENTS.


     No Option Shares shall be issued unless and until, in the opinion of the
Company, any applicable registration requirements of the United States
SECURITIES ACT OF 1933, as amended, any applicable listing requirements of any
securities exchange on which stock of the same class is then listed, and any
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery, have been fully complied with. Each Option and each
Option Share certificate may be imprinted with legends reflecting federal and
state securities laws restrictions and conditions, and the Company may comply
therewith and issue "stop transfer" instructions to its transfer agent and
registrar in good faith without liability.


15.       DISPOSITION OF OPTION SHARES.


     Each Optionee, as a condition of exercise, shall represent, warrant and
agree, in a form of written certificate approved by the Company, as follows: (i)
that all Option Shares are being acquired solely for his own account and not on
behalf of any other person or entity; (ii) that no Option Shares will be sold or
otherwise distributed in violation of the United States SECURITIES ACT OF 1933,
as amended, or any other applicable federal or state securities laws; (iii) that
if he is subject to reporting requirements under Section 16(a) of the United
States SECURITIES EXCHANGE ACT OF 1934, as amended, he will (a) furnish the
Company with a copy of each Form 4 filed by him and (b) timely file all reports



                                      -9-


required under the federal securities laws; and (iv) that he will report all
sales of Option Shares to the Company in writing on a form prescribed by the
Company.


16.       EFFECTIVE DATE OF PLAN; TERMINATION DATE OF PLAN.


     The Plan shall be deemed effective as of June 19, 2003. The Plan shall
terminate at midnight on June 19, 2013 except as to Options previously granted
and outstanding under the Plan at the time. No Options shall be granted after
the date on which the Plan terminates. The Plan may be abandoned or terminated
at any earlier time by the Board, except with respect to any Options then
outstanding under the Plan.


17.       OTHER PROVISIONS.


     The following provisions are also in effect under the Plan:


          (a)       the use of a masculine gender in the Plan shall also include
                    within its meaning the feminine, and the singular may
                    include the plural, and the plural may include the singular,
                    unless the context clearly indicates to the contrary;


          (b)       any expenses of administering the Plan shall be borne by the
                    Company;


          (c)       this Plan shall be construed to be in addition to any and
                    all other compensation plans or programs. The adoption of
                    the Plan by the Board shall not be construed as creating any
                    limitations on the power or authority of the Board to adopt
                    such other additional incentive or other compensation
                    arrangements as the Board may deem necessary or desirable;
                    and


          (d)       the validity, construction, interpretation, administration
                    and effect of the Plan and of its rules and regulations, and
                    the rights of any and all personnel having or claiming to
                    have an interest therein or thereunder shall be governed by
                    and determined exclusively and solely in accordance with the
                    laws of the State of Colorado, U.S.A.


     This Plan is dated and made effective on this 8th day of August, 2003.





                                      -10-


                      BY ORDER OF THE BOARD OF DIRECTORS OF
                            VEGA-ATLANTIC CORPORATION
                                      Per:

                                 "GRANT ATKINS"

                                  Grant Atkins
                                  ____________
                                   A Director




                                   EXHIBIT C
                             AGREEMENT IN PRINCIPLE



                            VEGA-ATLANTIC CORPORATION
                            =========================

                          435 Martin Street, Suite 2000
                        Blaine, Washington, U.S.A., 98230
                        _________________________________

June 19, 2003

To:
TRANSAX LIMITED
Irvine Spectrum Center
Suite 200, 7545 Irvine Center Drive
Irvine, California, U.S.A., 92618

Dear Sirs\Mesdames:

Re:
      OFFER TO PURCHASE, BY WAY OF MERGER, ALL OF THE SHARES OF TRANSAX LIMITED
                                 (THE "COMPANY")
          FROM ALL OF THE SHAREHOLDERS OF THE COMPANY (EACH A "VENDOR")
                 BY VEGA-ATLANTIC CORPORATION (THE "PURCHASER")
      (THE COMPANY, THE VENDORS AND THE PURCHASER BEING, COLLECTIVELY, THE
                                   "PARTIES")

                             AGREEMENT IN PRINCIPLE
                             ======================

         This letter will confirm our recent  discussions  and the  intention of
each of Parties hereto to enter into the basic terms of an agreement (herein the
"AGREEMENT") for the acquisition by the above-referenced  Purchaser from each of
the  above-referenced  Vendors of all of issued and  outstanding  shares (each a
"PURCHASED SHARE") of the above-referenced  Company by way of merger and/or plan
of  arrangement  (collectively,  the  "MERGER",  as the final  structure of this
purchase and sale is to be determined).

         We  understand  and  confirm  that  the  Company  is a  body  corporate
subsisting  under and registered  pursuant to the laws of the State of Colorado,
U.S.A.,   that   the   Company,   together   with   its   subsidiaries,   TDS  -
Telecommunications  Data Systems Ltda.,  Transax Australia Pty. Ltd. and Medlink
Technologies Inc.  (collectively,  the "COMPANY'S  SUBSIDIARIES"),  is presently
engaged  in  the  business  of  providing   information  network  solutions  for
healthcare  providers and insurance  companies and that the Company now requires
additional  external capital in order to fully develop and realize the potential
of its existing business (collectively, the "COMPANY'S BUSINESS").

         We also  understand and confirm that, by entering into this  Agreement,
the undersigned  authorized  signatories for each of the Purchaser,  the Company
and the  Vendors  intend to move  forward  toward  entering  into a more  formal
agreement (the "FORMAL  AGREEMENT")  pursuant to which the Vendors will agree to
sell and the Purchaser  will agree to purchase all of the Purchased  Shares from
the  Vendors  pursuant  to the Merger and upon terms and  conditions  similar to
those as set forth hereinbelow.  AT ALL TIMES THE UNDERSIGNED HERETO ACKNOWLEDGE
AND AGREE THAT THE COMPLETION OF ANY SUCH FORMAL AGREEMENT AND MERGER IS SUBJECT
TO THE PRIOR  RATIFICATION  AND APPROVAL OF THE TERMS AND CONDITIONS OF ANY SUCH
FORMAL  AGREEMENT  AND  MERGER BY THE BOARD OF  DIRECTORS  AND,  IF  APPLICABLE,
SHAREHOLDERS  OF THE PURCHASER,  EACH OF THE VENDORS,  THE BOARD OF DIRECTORS OF
THE COMPANY AND SUCH SECURITIES REGULATORY  AUTHORITIES AS MAY HAVE JURISDICTION
OVER THE PURCHASER,  THE COMPANY AND THE VENDORS (collectively,  the "REGULATORY
AUTHORITIES").

         In connection with the foregoing,  therefore,  the  undersigned  hereby
acknowledge  and agree that the  following  will  represent the basic terms of a
Formal  Agreement for the  acquisition  by the Purchaser of all of the Purchased
Shares from the Vendor by way of Merger; the preliminary  details and time frame
for which having been  originally  set forth in the term sheet which is attached
hereto.

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -2-


                                    ARTICLE 1
              PURCHASE AND SALE OF THE ALL OF THE PURCHASED SHARES
              ====================================================

1.1      PURCHASE AND SALE BY WAY OF MERGER AND AGREEMENT OF MAJORITY VENDOR.
Subject to the terms and  conditions  hereof and based upon the  representations
and warranties contained in Articles "2" and "3" hereinbelow, together with such
other terms and conditions and representations and warranties as are standard in
similar share purchase  transactions of this type and as may be evidenced by the
final form of Formal  Agreement  which  replaces this  Agreement,  and the prior
satisfaction  of the  conditions  precedent  which are set forth in Article  "4"
hereinbelow,  the Vendors agree to assign, sell and transfer by way of Merger at
the closing date (the "CLOSING DATE") all of their respective right, entitlement
and interest in and to the  Purchased  Shares to the Purchaser and the Purchaser
agrees to purchase all of the Purchased Shares from the Vendors on the terms and
subject to the conditions contained in this Agreement.

         In this regard, and should the final terms and conditions of any Formal
Agreement  respecting the proposed  Merger not be approved by the Vendors of the
Company  at any duly  constituted  meeting  respecting  the same,  or should any
Formal Agreement not be consummated by the Parties hereto in the manner which is
contemplated herein for any reason whatsoever and including, without limitation,
the  implementation  of any  dissenters'  rights which are not acceptable to the
Purchaser  resulting  from the same, it is hereby  acknowledged  and  understood
that,  notwithstanding  the  prior  failure  of the  proposed  Merger,  each  of
Carlingford Investments Limited and Stephen Walters, together with each of their
respective and associated and affiliated  Vendors of the Company as the case may
be (collectively,  the "MAJORITY  VENDOR"),  hereby irrevocably agree to assign,
sell and transfer all of their respective right, entitlement and interest in and
to their  respective  Purchased  Shares to the Purchaser upon and subject to the
specific  terms and  conditions  contemplated  by this  Agreement  on a pro rata
basis.

1.2      PURCHASE PRICE.  The total purchase price (the "PURCHASE  PRICE") for
all of the  Purchased  Shares  will  be  paid by the  Purchaser's  issuance  and
delivery to the Vendors,  in accordance  with section "1.3"  hereinbelow,  of an
aggregate of 11,066,207  restricted  common shares in the capital of the Company
(each a "SHARE"), at a deemed issuance price of U.S. $0.50 per Share, within ten
business  days of the  Closing  (as  hereinafter  determined)  of the  terms and
conditions of the Formal Agreement.

1.3      PRO-RATA  ENTITLEMENT AND PRIOR CONSOLIDATION BY THE COMPANY.  The
Purchaser  will issue the Shares to the Vendors pro rata in accordance  with the
each Vendor's respective  Purchased Share shareholding in and to the Company and
outstanding as at the Closing Date (assuming the prior completion by the Company
of a one new for two old share capital consolidation (the "CONSOLIDATION") prior
to Closing);  with all fractions greater than or equal to one-half being rounded
up and all fractions less than one-half being rounded down.

1.4      RESALE RESTRICTIONS AND LEGENDING OF SHARE CERTIFICATES.  The Vendors
hereby   initially   acknowledge   and  agree  that  the   Purchaser   makes  no
representations  as to any resale or other restriction  affecting the Shares and
that  it is  presently  contemplated  that  the  Shares  will be  issued  by the
Purchaser  to the  Vendors in  reliance  upon the  registration  and  prospectus
exemptions  contained in certain sections of the United States SECURITIES ACT OF
1933 (the "SECURITIES  ACT") or "REGULATION S" promulgated  under the Securities
Act which will impose a trading  restriction  in the United States on the Shares
for a period of at least 12 months  from the  Closing  Date.  In  addition,  the
Vendors  hereby also  acknowledge  and agree that the within  obligation  of the
Purchaser  to issue the Shares  pursuant to section  "1.2"  hereinabove  will be
subject to the  Purchaser  being  satisfied  that an exemption  from  applicable
registration  and prospectus  requirements is available under the Securities Act
and all applicable  securities laws, in respect of each particular  Vendor,  the
Purchased  Shares and the  Shares,  and the  Purchaser  shall be relieved of any
obligation  whatsoever to purchase any Purchased Shares of a Vendor and to issue
Shares in respect of that Vendor where the Purchaser reasonably  determines that
a suitable exemption is not available to it.

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -3-

         The Vendors hereby also  acknowledge  and  understand  that neither the
sale of the  Shares  which  the  Vendors  are  acquiring  nor any of the  Shares
themselves have been registered under the Securities Act or any state securities
laws,  and,  furthermore,  that  the  Shares  must be held  indefinitely  unless
subsequently  registered  under the  Securities  Act or an  exemption  from such
registration is available.  The Vendors also acknowledge and understand that the
certificates  representing  the Shares will be stamped with the following legend
(or substantially  equivalent  language)  restricting  transfer in the following
manner:

     "The  transfer  of  the  securities  represented  by  this  certificate  is
     prohibited  except  in  accordance  with the  provisions  of  Regulation  S
     promulgated under the United States Securities Act of 1933, as amended (the
     "Act"),  pursuant to registration under the Act or pursuant to an available
     exemption from registration.  In addition,  hedging transactions  involving
     such securities may not be conducted unless in compliance with the Act.".
                                       or
     "The securities  represented by this  certificate  have not been registered
     under the United States Securities Act of 1933, as amended,  or the laws of
     any state, and have been issued pursuant to an exemption from  registration
     pertaining  to such  securities  and  pursuant to a  representation  by the
     security  holder named hereon that said  securities  have been acquired for
     purposes  of  investment  and  not  for  purposes  of  distribution.  These
     securities may not be offered, sold,  transferred,  pledged or hypothecated
     in the absence of  registration,  or the  availability of an exemption from
     such  registration.  Furthermore,  no  offer,  sale,  transfer,  pledge  or
     hypothecation  is to take  place  without  the prior  written  approval  of
     counsel  to the  company  being  affixed  to this  certificate.  The  stock
     transfer agent has been ordered to effectuate  transfers only in accordance
     with the above instructions.";

and the Vendors  hereby  consent to the Company making a notation on its records
or giving  instructions  to any transfer  agent of the Purchaser  (the "TRANSFER
AGENT")  in order to  implement  the  restrictions  on  transfer  set  forth and
described hereinabove.

         The Vendors also acknowledge and understand that:

     (a) the Shares are restricted  securities  within the meaning of "RULE 144"
         promulgated under the Securities Act;

     (b) the exemption from registration under Rule 144 will not be available in
         any event for at least one year from the date of issuance of the Shares
         to the Vendors, and even then will not be available unless (i) a public
         trading  market then exists for the common stock of the  Company,  (ii)
         adequate  information  concerning  the Company is then available to the
         public and (iii) other terms and  conditions  of Rule 144 are  complied
         with; and

     (c) any  sale of the  Shares  may be made by the  Vendors  only in  limited
         amounts in accordance with such terms and conditions.

         The Vendors finally  acknowledge and understand that, without in anyway
limiting the acknowledgements  and understandings as set forth hereinabove,  the
Vendors agree that the Vendors shall in no event make any  disposition of all or
any portion of the Shares which the Vendors are acquiring  hereunder  unless and
until:

     (a) there is then in effect a "REGISTRATION STATEMENT" under the Securities
         Act covering such proposed  disposition and such disposition is made in
         accordance with said Registration Statement; or

     (b) (i) the  Vendors  shall  have  notified  the  Company  of the  proposed
         disposition  and shall  have  furnished  the  Company  with a  detailed
         statement of the  circumstances  surrounding the proposed  disposition,
         (ii) the Vendors  shall have  furnished  the Company with an opinion of
         the Vendors' own counsel to the effect that such  disposition  will not

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -4-

         require  registration  of any such Shares under the  Securities Act and
         (iii) such opinion of the Vendors' counsel shall have been concurred in
         by counsel  for the  Company  and the  Company  shall have  advised the
         Vendors of such concurrence.

1.5      INTERIM SECURED LOAN FROM THE PURCHASER TO THE COMPANY.  In conjunction
with and as a condition  to the entering  into of this  Agreement by the Parties
hereto,  together with the within  agreement by the Parties hereto to heretofore
use their best efforts to enter into a Formal Agreement  incorporating the terms
and conditions hereof as soon as conveniently possible hereafter,  the Purchaser
has agreed to use its commercially  reasonable  efforts to hereby advance by way
of a loan or loans to the  Company  (collectively,  the  "LOAN")  the  aggregate
principal sum of up to U.S.  $250,000.00  (collectively,  the  "PRINCIPAL  SUM")
within five business  days of the due and complete  closing of a minimum of U.S.
$250,000.00  of  the  proposed   Funding  and/or  Private   Placement  (each  as
hereinafter  determined)  financing  as set  forth  hereinbelow,  together  with
interest  accruing on any Principal Sum Loan amount hereunder at the rate of ten
percent  (10%) per  annum,  compounded  semi-annually  and not in  advance  (the
"INTEREST") prior to maturity. In this regard the Parties hereby acknowledge and
agree   that  any   such   Principal   Sum  and   Interest   will  be   secured,
contemporaneously  with the advancement of any funds under any such Loan, by way
of a fixed and floating  charge on all of the assets of the Company then ranking
PARI PASSU with all existing  liabilities in and to the Company at that time. In
this regard it is hereby also  acknowledged and agreed that, upon the completion
of the within  purchase  and sale,  it is intended,  subject to the  Purchaser's
prior receipt of  appropriate  accounting  and legal advice,  that the Loan will
simply be forgiven,  or become an  inter-company  account as the  situation  may
require.  The Parties hereby acknowledge and agree that if either this Agreement
or any Formal  Agreement is  terminated  for any reason  whatsoever,  and should
there be subsequent to 90 calendar days from any such termination any portion of
any Principal Sum, Interest or any other sum outstanding under any Loan from the
Purchaser to the Company as contemplated herein (collectively,  the "OUTSTANDING
INDEBTEDNESS"),  then the Purchaser will have the exclusive right and option, in
its sole and absolute  discretion and for a period of 30 calendar days after the
initial  90  calendar  days from any such  termination,  to elect to either  (a)
demand repayment of such Outstanding  Indebtedness on a 30-calendar  days' basis
and, thereupon and if required,  realize upon any of the security of the Company
granted  to the  Purchaser  under  such  Loan,  or  (b)  have  such  Outstanding
Indebtedness  converted to such pro rata,  participating  and voting interest in
and to the  Company  which  is then  equivalent  to  that  percentage  which  is
equivalent  to five percent (5%)  multiplied  by the fraction  which has, as its
numerator, the Outstanding Indebtedness, and which has, as its denominator, U.S.
$250,000.00,  of the resulting issued and outstanding  participating  and voting
common shares of the Company.  In this regard, and should the Purchaser elect to
convert  the  Outstanding  Indebtedness  into an equity  position  in and to the
Company as set forth  hereinabove,  then it is also acknowledged and agreed that
the Purchaser will, at all times, have a standard right of first refusal,  on at
least  60  calendar  days'  prior  written  notice  from  the  Company  and upon
cash-equivalent  terms only, to maintain such percentage  ownership  position of
the Purchaser in and to the Company unless otherwise  consented to in writing by
the  Purchaser;  a copy of the form of  which  proposed  Loan  and the  security
therefore being provided with this Agreement and forming a material part hereof.

1.6      COSTS. It is hereby further acknowledged and agreed by the Parties
hereto that while any portion of any  Outstanding  Indebtedness  is  outstanding
hereunder, and should this Agreement or any Formal Agreement have terminated due
solely to either the  breach,  default or failure to perform  thereunder  by the
Company,  the Company  will remain  responsible  for all fees and  expenses  and
including,  without limitation, all legal, accounting,  sponsorship,  regulatory
and filing fees and expenses, and otherwise,  in connection with the preparation
and execution of this Agreement, any Formal Agreement, all sponsorship materials
in  conjunction  with any Formal  Agreement,  all  filings  with any  regulatory
authority as may have  jurisdiction  over either the Company or the Purchaser in
conjunction  with the completion of any Formal  Agreement and all  documentation
necessarily  incidental  thereto;  and which fees and expenses shall be added to
and form part of the Outstanding Indebtedness hereunder.

1.7      STANDSTILL PROVISIONS.  In consideration of the Parties' within
agreement to purchase and sell the Purchased  Shares and to enter into the terms
and  conditions  of this  Agreement,  each of the Parties  hereby  undertake for
themselves, and for each of their respective agents and advisors, that they will

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -5-

not until the earlier of the Closing Date or the  termination  of this Agreement
approach or consider any other potential purchasers,  or make, invite, entertain
or accept any offer or proposal for the proposed  sale of any interest in and to
any of the Purchased Shares or the assets or the respective  business  interests
of the  Company  or the  Purchaser,  as the case may be,  or,  for that  matter,
disclose any of the terms of this Agreement,  without the Parties' prior written
consent.  In this  regard  each of the  Parties  hereby  acknowledges  that  the
foregoing restrictions are important to the respective businesses of the Parties
and that a breach  by  either  of the  Parties  of any of the  covenants  herein
contained  would  result  in  irreparable  harm and  significant  damage to each
affected Party that would not be adequately  compensated  for by monetary award.
Accordingly,  the Parties hereby agree that, in the event of any such breach, in
addition to being entitled as a matter of right to apply to a Court of competent
equitable  jurisdiction  for  relief by way of  restraining  order,  injunction,
decree  or  otherwise  as may be  appropriate  to  ensure  compliance  with  the
provisions hereof,  any such Party will also be liable to the other Parties,  as
liquidated  damages,  for an amount  equal to the amount  received and earned by
such  Party as a result of and with  respect  to any such  breach.  The  Parties
hereby also  acknowledge  and agree that if any of the  aforesaid  restrictions,
activities,  obligations  or  periods  are  considered  by a Court of  competent
jurisdiction  as being  unreasonable,  they  agree  that said  Court  shall have
authority to limit such restrictions, activities or periods as the Court deems
proper in the circumstances.

                                    ARTICLE 2
    WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE COMPANY AND THE VENDORS

2.1      WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE COMPANY AND THE
VENDORS.  In order to induce  the  Purchaser  to enter into this  Agreement  and
consummate any Formal Agreement, the Company hereby, and each of the Company and
the  Vendors  by virtue of any Formal  Agreement  will,  respectively,  thereby,
warrant to, represent to and covenant with the Purchaser in this Agreement,  and
in any  Formal  Agreement  as at the  Closing  Date,  that,  to the  best of the
knowledge,  information and belief of the Company herein, and to the best of the
knowledge,  information  and  belief  of each of the  Company  and the  Vendors,
respectively,  in any  Formal  Agreement,  after  making due  inquiry  and where
appropriate and applicable:

     (a) the Company and each of the Company's Subsidiaries is duly incorporated
         under the laws of its  respective  jurisdiction  of  incorporation,  is
         validly  existing and is in good standing with respect to all statutory
         filings required by the applicable corporate laws;

     (b) the Company and each of the  Company's  Subsidiaries  has the requisite
         power,  authority  and  capacity  to own and use all of its  respective
         business  assets and to carry on the  Company's  Business as  presently
         conducted by it;

     (c) save and  except  as will be set  forth in any  Formal  Agreement,  the
         Company and each of the Company's  Subsidiaries  owns and possesses and
         has  good  and  marketable  title  to  and  possession  of  all  of its
         respective  business  assets free and clear of all actual or threatened
         liens,  charges,  options,  encumbrances,   voting  agreements,  voting
         trusts, demands, limitations and restrictions of any nature whatsoever;

     (d) save and  except  as will be set  forth in any  Formal  Agreement,  the
         Company and each of the Company's  Subsidiaries  holds all licenses and
         permits  required  for  the  conduct  in  the  ordinary  course  of the
         operations  of the  Company's  Business  and for the uses to which  its
         respective business assets have been put and are in good standing,  and
         such conduct and uses are in compliance with all laws, zoning and other
         by-laws,  building  and  other  restrictions,  rules,  regulations  and
         ordinances  applicable  to  the  Company  and  each  of  the  Company's
         Subsidiaries  and its  respective  business  assets,  and  neither  the
         execution  and delivery of this  Agreement  nor the  completion  of the
         transactions  contemplated  hereby  will give any  person  the right to
         terminate  or  cancel  any  said  license  or  permit  or  affect  such
         compliance;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -6-

     (e) the  Company's  Business at Closing  will be comprised of a one hundred
         percent (100%) registered and beneficial working interest in and to all
         of the  Company's  business  assets at that time which,  subject to the
         following  and  without  limitation,  shall  include  all of  the  then
         business assets of the Company's Subsidiaries,  which shall all be free
         and  clear  of  all  actual  or  threatened  liens,  charges,  options,
         encumbrances,  voting agreements,  voting trusts, demands,  limitations
         and restrictions of any nature whatsoever;

     (f) the Company's will use its commercially  reasonable  efforts both prior
         to and/or  commensurate  with the Closing  hereunder to accelerate  its
         current  Company's  Business  model in order to  initiate  a real  time
         payment option for its existing and proposed  healthcare  providers and
         insurers;

     (g) there are and will be no other shares in the capital of the Company and
         each of the Company's  Subsidiaries  issued or allotted or agreed to be
         issued or allotted to any person;

     (h) the  Vendors  have good and  marketable  title to and are the legal and
         beneficial owners of all of the Purchased Shares;

     (i) the Purchased  Shares are validly issued and outstanding and fully paid
         and  non-assessable  in the capital of the Company and, save and except
         as will be set forth in any Formal Agreement,  the Purchased Shares are
         free and clear of all actual or  threatened  liens,  charges,  options,
         encumbrances,  voting agreements,  voting trusts, demands,  limitations
         and restrictions of any nature whatsoever;

     (j) there are no claims of any nature  whatsoever  affecting  the rights of
         the Vendors to transfer  the  Purchased  Shares to the  Purchaser  and,
         without  limiting the generality of the foregoing,  there are no claims
         or potential claims under any relevant family relations  legislation or
         other equivalent legislation affecting the Purchased Shares;

     (k) the  Vendors  have the power and  capacity  to own and  dispose  of the
         Purchased Shares;

     (l) this Agreement and any Formal Agreement will constitute a legal,  valid
         and  binding  obligation  of  each  of the  Company  and  the  Vendors,
         enforceable  against each of the Company and the Vendors in  accordance
         with its respective terms, except as enforcement may be limited by laws
         of general application affecting the rights of creditors;

     (m) as at the execution  date of any Formal  Agreement,  and except for the
         prior  completion  of the  proposed  Consolidation  and  as  set  forth
         hereinbelow,  the Company and each of the Company's  Subsidiaries  will
         not have  committed  itself to provide any person,  firm or corporation
         with any  agreement,  option or right,  consensual  or  arising by law,
         present or future,  contingent  or absolute,  or capable of becoming an
         agreement, option or right:

         (i)   to require it to issue any  further or other  shares in its share
               capital,  or any other security  convertible or exchangeable into
               shares  in its share  capital,  or to  convert  or  exchange  any
               securities into or for shares in its share capital;

         (ii)  for the issue and allotment of any of the authorized but unissued
               shares in its share capital;

         (iii) to require it to purchase, redeem or otherwise acquire any of the
               issued and outstanding shares in its share capital; or

         (iv)  to purchase or otherwise acquire any shares in its share capital;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -7-

     (n) no other person, firm or corporation has any agreement, option or right
         capable  of  becoming  an  agreement  for  the  purchase  of any of the
         Purchased  Shares or any of the  unissued  shares in the capital of the
         Company,  and at Closing it is presently  contemplated that each of the
         presently   issued   and   outstanding   9,000,000   (4,500,000   on  a
         post-Consolidation    basis)   incentive   stock   option    securities
         (collectively,  the "COMPANY'S  OPTIONS") and 8,200,000 (4,100,000 on a
         post-Consolidation    basis)   share   purchase   warrant    securities
         (collectively,  the  "COMPANY'S  WARRANTS")  outstanding  in and to the
         Company will be  exchanged,  on the same exercise and pricing terms and
         conditions,   for  an  equal   number  of   incentive   stock   options
         (collectively,  the "PURCHASER'S  OPTIONS") and share purchase warrants
         (collectively,  the  "PURCHASER'S  WARRANTS")  in and to the  resulting
         Purchaser on a post-Consolidation  basis in consideration,  in part, of
         the ongoing  involvement of the existing Company's  optionholders (each
         an "OPTIONHOLDER")  and warrantholders  (each a "WARRANTHOLDER") in and
         to the resulting  Purchaser company and in exchange for the agreed upon
         cancellation by said Company's  Optionholders and Warrantholders of all
         of the then issued and  outstanding  Company's  Options  and  Company's
         Warrants as a consequence thereof;

     (o) save and except as may be set forth in any Formal Agreement,  there are
         no material liabilities,  contingent or otherwise, existing on the date
         hereof  in  respect  of which  the  Company  and each of the  Company's
         Subsidiaries   may  be  liable  on  or  after  the  completion  of  the
         transactions contemplated by this Agreement other than:

         (i)   liabilities disclosed or referred to in this Agreement; and

         (ii)  liabilities  incurred  in the  ordinary  course of the  Company's
               Business,  none of which are materially  adverse to the business,
               operations,  affairs or financial  conditions  of the Company and
               each of the Company's Subsidiaries;

     (p) no dividend or other distribution by the Company will be declared, paid
         or authorized up to and including the Closing Date, and the Company has
         not and has not  committed  itself to confer upon,  or pay to or to the
         benefit of, any entity, any benefit having monetary value, any bonus or
         any salary increases except in the normal course of its business;

     (q) save and except as will be set forth in any Formal Agreement,  there is
         no basis for and there are no actions, suits, judgments, investigations
         or proceedings outstanding or pending or, to the best of the knowledge,
         information  and belief of each of the Company and the  Vendors,  after
         making due inquiry,  threatened  against or  affecting  the Company and
         each of the Company's  Subsidiaries at law or in equity or before or by
         any  federal,  state,  municipal  or  other  governmental   department,
         commission, board, bureau or agency;

     (r) the Company and each of the Company's  Subsidiaries is not in breach of
         any laws, ordinances, statutes, regulations, by-laws, orders or decrees
         to which it is subject or which apply to it;

     (s) save and  except  as will be set  forth in any  Formal  Agreement,  the
         Company and each of the Company's Subsidiaries has not experienced, nor
         are the Company and the Vendors aware of, any occurrence or event which
         has had, or might reasonably be expected to have, a materially  adverse
         affect on the Company's Business or on the results of its operations;

     (t) save and  except  as will be set  forth in any  Formal  Agreement,  the
         Company and each of the Company's  Subsidiaries is not, nor until or at
         the Closing  Date will it be, in breach of any  provision  or condition
         of,  nor has it done or omitted  anything  that,  with or  without  the
         giving  of notice or lapse or both,  would  constitute  a breach of any
         provision  or  condition  of, or give rise to any right to terminate or
         cancel or  accelerate  the maturity of any payment  under,  any deed of

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -8-

         trust,  contract,  certificate,   consent,  permit,  license  or  other
         instrument  to which it is a party,  by which it is bound or from which
         it derives benefit, any judgment,  decree, order, rule or regulation of
         any court or  governmental  authority  to which it is  subject,  or any
         statute  or  regulation  applicable  to it, to an extent  that,  in the
         aggregate, has a material adverse affect on it;

     (u) the Company and each of the Company's Subsidiaries has not committed to
         making and until the Closing Date will not make or commit itself to:

         (i)  guarantee,  or  agree  to  guarantee,  any  indebtedness  or other
              obligation of any person or corporation; or

         (ii) waive or surrender any right of material value;

     (v) until  the  Closing  Date  the  Company  and  each  of  the   Company's
         Subsidiaries will:

         (i)  maintain its assets in a manner  consistent with and in compliance
              with applicable law; and

         (ii) not enter  into any  material  transaction  or assume or incur any
              material  liability  outside  the  normal  course of its  business
              without the prior written consent of the Purchaser;

     (w) the Vendors  acknowledge  that the Shares will be issued under  certain
         exemptions from the  registration  and prospectus  filing  requirements
         otherwise  applicable  under the  Securities Act and that, as a result,
         the  Vendors may be  restricted  from using most of the  remedies  that
         would  otherwise be available to them and will not receive  information
         that would  otherwise  be  required  to be  provided  to them,  and the
         Purchaser is relieved  from certain  obligations  that would  otherwise
         apply to it, in either case, under applicable securities legislation;

     (x) the  Vendors  acknowledge  and agree that the Shares  have not been and
         will not be  qualified  or  registered  under the any  federal or state
         securities  laws of the United States and, as such,  the Vendors may be
         restricted  from selling or transferring  such Shares under  applicable
         law;

     (y) the Vendors  realize that the sale of the Purchased  Shares in exchange
         for the Shares  will be a highly  speculative  investment  and that the
         Vendors are able, without impairing that Vendors' financial  condition,
         to hold the  Shares  for an  indefinite  period of time and to suffer a
         complete loss on the Vendors' investment. In addition, the Vendors have
         such  knowledge and  experience in financial and business  matters that
         the  Vendors  are  capable  of  evaluating  the merits and risks of the
         prospective investment, and the Vendors have not received, nor have the
         Vendors  requested or do the Vendors  require to receive,  any offering
         memorandum or a similar document describing the business and affairs of
         the  Purchaser  in order to assist the  Vendors in  entering  into this
         Agreement and in consummating the transactions contemplated herein;

     (z) the  Company  has,  and  shall  have  until  repayment  in  full of any
         Principal Sum and any Interest accrued thereon under the within interim
         Loan,  all  requisite  power  and  authority  to  enter  into  the Loan
         arrangement  and to grant the security and supporting  documents  which
         may be required by the  Purchaser as a condition  of the Loan,  and the
         Loan and the security and supporting documents will be duly and validly
         authorized,  executed  and  delivered  by the Company to the  Purchaser
         immediately  upon the  execution  of this  Agreement  and will be valid
         obligations  of and  legally  binding  on the  Company  enforceable  in
         accordance with each of their respective terms;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -9-


     (aa) the making  of this  Agreement,  the  completion  of the  transactions
          contemplated   hereby  pursuant  to  any  Formal   Agreement  and  the
          performance of and compliance  with the terms hereof does not and will
          not:

          (i)  conflict  with or  result in a breach  of or  violate  any of the
               terms,  conditions or provisions of the  constating  documents of
               the Company and each of the Company's Subsidiaries;

          (ii) conflict  with or  result in a breach  of or  violate  any of the
               terms,  conditions  or provisions  of any law,  judgment,  order,
               injunction,   decree,  regulation  or  ruling  of  any  court  or
               governmental authority,  domestic or foreign, to which either the
               Company, the Company's Subsidiaries or the Vendors is subject, or
               constitute or result in a default under any  agreement,  contract
               or  commitment  to  which  either  the  Company,   the  Company's
               Subsidiaries or the Vendors is a party;

          (iii)give to any  party  the  right of  termination,  cancellation  or
               acceleration  in or with  respect to any  agreement,  contract or
               commitment   to  which  the  Company  or  any  of  the  Company's
               Subsidiaries is a party;

          (iv) give  to  any  government  or  governmental   authority,  or  any
               municipality   or  any   subdivision   thereof,   including   any
               governmental   department,    commission,    bureau,   board   or
               administration agency, any right of termination,  cancellation or
               suspension  of, or  constitute a breach of or result in a default
               under,  any permit,  license,  control or authority issued to the
               Company or any of the Company's  Subsidiaries  which is necessary
               or desirable in connection with the conduct and operations of the
               Company's  Business and the  ownership or leasing of its business
               assets; or

          (v)  constitute  a  default  by the  Company  or any of the  Company's
               Subsidiaries,  or any event  which,  with the giving of notice or
               lapse  of time or both,  might  constitute  an event of  default,
               under any  agreement,  contract,  indenture  or other  instrument
               relating  to  any  indebtedness  of  the  Company  or  any of the
               Company's  Subsidiaries  which  would  give  any  party  to  that
               agreement,  contract,  indenture or other instrument the right to
               accelerate  the  maturity  for the payment of any amount  payable
               under that agreement,  contract,  indenture or other  instrument;
               and

     (ab) it is not  aware  of any  fact or  circumstance  which  has  not  been
          disclosed  to the  Purchaser  which  should be  disclosed  in order to
          prevent the  representations,  warranties  and covenants  contained in
          this section from being  misleading  or which would likely  affect the
          decision of the  Purchaser to enter into this  Agreement or any Formal
          Agreement.

                                    ARTICLE 3
           WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER
           ==========================================================

3.1      WARRANTIES,  REPRESENTATIONS  AND COVENANTS BY THE PURCHASER.  In order
to induce each of the Company and the Vendors to enter into this  Agreement  and
consummate any Formal Agreement, the Purchaser hereby, and thereby will, warrant
to,  represent to and covenant with each of the Company and the Vendors that, to
the best of the knowledge,  information  and belief of the Purchaser  herein and
therein,  after  making  due  inquiry  (and for the  purposes  of the  following
warranties,  representations and covenants  "Purchaser" shall mean the Purchaser
and any subsidiary of the Purchaser as the context so requires):

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -10-

     (a)  the Purchaser is duly incorporated  under the laws of its jurisdiction
          of  incorporation,  is validly  existing and is in good  standing with
          respect to all statutory filings required by the applicable  corporate
          laws;

     (b)  the Purchaser has the requisite  power,  authority and capacity to own
          and use all of its  business  assets and to carry on its  business  as
          presently conducted by it;

     (c)  the Purchaser owns and possesses and has good and marketable  title to
          and  possession  of all of its  business  assets free and clear of all
          actual or threatened liens,  charges,  options,  encumbrances,  voting
          agreements,  voting trusts,  demands,  limitations and restrictions of
          any nature whatsoever;

     (d)  the Purchaser holds all licenses and permits  required for the conduct
          in the ordinary  course of the  operations of its business and for the
          uses to  which  its  business  assets  have  been  put and are in good
          standing,  and such conduct and uses are in compliance  with all laws,
          zoning and other  by-laws,  building  and other  restrictions,  rules,
          regulations  and ordinances  applicable to the Purchaser,  and neither
          the execution and delivery of this Agreement nor the completion of the
          transactions  contemplated  hereby  will give any  person the right to
          terminate  or  cancel  any said  license  or  permit  or  affect  such
          compliance;

     (e)  this Agreement and any Formal Agreement will constitute a legal, valid
          and  binding  obligation  of the  Purchaser,  enforceable  against the
          Purchaser  in  accordance  with  its  respective   terms,   except  as
          enforcement  may be limited by laws of general  application  affecting
          the rights of creditors;

     (f)  the authorized capital of the Purchaser consists of 100,000,000 common
          shares  without  par value of which,  according  to the records of the
          Purchaser,  an aggregate of 1,106,700  common  shares of the Purchaser
          are issued and outstanding as fully paid and non-assessable;

     (g)  all of the issued and  outstanding  shares of the Purchaser are listed
          and posted for  trading on the NASD  Over-the-Counter  Bulletin  Board
          (the "OTCBB"),  and the Purchaser is not in material default of any of
          its listing  requirements of the OTCBB or any rules or policies of the
          United States Securities and Exchange Commission (the "COMMISSION");

     (h)  all registration statements, reports and proxy statements filed by the
          Purchaser  with  the  Commission,  and  all  registration  statements,
          reports and proxy  statements  required  to be filed by the  Purchaser
          with the Commission, have been filed by the Purchaser under the United
          States  SECURITIES  ACT of 1934 (the  "1934  ACT"),  were filed in all
          material  respects in accordance with the requirements of the 1934 Act
          and the  rules and  regulations  thereunder  and no such  registration
          statements, reports or proxy statements contained any untrue statement
          of a material  fact or omitted to state any material  fact required to
          be  stated  therein  or  necessary  in order  to make  the  statements
          therein, in light of the circumstances under which they were made, not
          misleading;

     (i)  the  Purchaser  will allot and issue the Shares on the Closing Date in
          accordance with sections "1.2" and "1.3" hereinabove as fully paid and
          non-assessable  in the capital of the Purchaser  free and clear of all
          actual or threatened liens,  charges,  options,  encumbrances,  voting
          agreements,  voting trusts,  demands,  limitations and restrictions of
          any nature  whatsoever,  other than hold periods or other restrictions
          imposed under applicable securities legislation;

     (j)  up to and  including  the Closing Date the  Purchaser  will not commit
          itself to:

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -11-


          (i)  redeem or acquire any shares in its share capital;

          (ii) declare or pay any dividend;

          (iii)make any  reduction in or  otherwise  make any payment on account
               of its paid-up capital; or

          (iv) effect any subdivision,  consolidation (except as required by the
               terms of this Agreement) or  reclassification of any of its share
               capital;

     (k)  up to and  including  the Closing Date the  Purchaser  will not commit
          itself to:

          (i)  acquire  or  have  the  use  of  any  property   from  a  person,
               corporation  or entity with whom it was not dealing with at arm's
               length; or

          (ii) dispose of anything to a person,  corporation or entity with whom
               it was not dealing with at arm's  length for  proceeds  less than
               the fair market value thereof;

     (l)  save and  except as will be set forth in any Formal  Agreement,  up to
          and including the Closing Date the Purchaser will not commit itself to
          provide any person, firm or corporation with any agreement,  option or
          right, consensual or arising by law, present or future,  contingent or
          absolute, or capable of becoming an agreement, option or right:

          (i)  to require it to issue any  further or other  shares in its share
               capital,  or any other security  convertible or exchangeable into
               shares  in its share  capital,  or to  convert  or  exchange  any
               securities into or for shares in its share capital;

          (ii) for the issue and allotment of any of the authorized but unissued
               shares in its share capital;

          (iii)to require it to  purchase,  redeem or  otherwise  acquire any of
               the issued and outstanding shares in its share capital; or

          (iv) to purchase or otherwise acquire any shares in its share capital;

     (m)  save and  except as will be set forth in any Formal  Agreement,  there
          are no material liabilities,  contingent or otherwise, existing on the
          date  hereof in  respect  of which the  Purchaser  may be liable on or
          after  the  completion  of  the  transactions   contemplated  by  this
          Agreement other than:

          (i)  liabilities disclosed or referred to in this Agreement; and

          (ii) liabilities incurred in the ordinary course of business,  none of
               which are materially adverse to the business, operations, affairs
               or financial conditions of the Purchaser;

     (n)  no  dividend or other  distribution  by the  Purchaser  has been made,
          declared  or  authorized  since  its  incorporation,  nor  will any be
          declared, paid or authorized up to and including the Closing Date, and
          the  Purchaser  will not commit itself to confer upon, or pay to or to
          the benefit of, any entity,  any benefit having  monetary  value,  any
          bonus or any  salary  increases  except  in the  normal  course of its
          business;

     (o)  there is no basis  for and  there are no  actions,  suits,  judgments,
          investigations  or proceedings  outstanding or pending or, to the best
          of the  knowledge,  information  and  belief of the  Purchaser,  after
          making due inquiry,  threatened  against or affecting the Purchaser at

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -12-


          law or in  equity or before or by any  federal,  state,  municipal  or
          other governmental department, commission, board, bureau or agency;

     (p)  the  Purchaser  is not in breach of any  laws,  ordinances,  statutes,
          regulations,  by-laws,  orders or  decrees  to which it is  subject or
          which apply to it;

     (q)  the Purchaser has not experienced,  nor is the Purchaser aware of, any
          occurrence or event which has had, or might  reasonably be expected to
          have, a materially  adverse affect on the  Purchaser's  business or on
          the results of its operations;

     (r)  up to and  including  the  Closing  Date  there  has  been and will be
          prepared and filed on a timely basis all federal and provincial income
          tax returns,  elections and designations,  and all other  governmental
          returns,  notices  and  reports  of which the  Purchaser  had or ought
          reasonably to have had knowledge, required to be or reasonably capable
          of being filed up to the Closing Date,  with respect to the operations
          of  the  Purchaser,  and no  such  returns,  elections,  designations,
          notices or  reports  contain  any  material  misstatement  or omit any
          material  statement  that  should  have been  included,  and each such
          return,   election,   designation,   notice   or   report,   including
          accompanying  schedules and statements,  is true, correct and complete
          in all material respects;

     (s)  the  Purchaser is not, nor until or at the Closing Date will it be, in
          breach of any  provision or  condition  of, nor has it done or omitted
          anything that,  with or without the giving of notice or lapse or both,
          would  constitute a breach of any  provision or condition  of, or give
          rise to any right to terminate or cancel or accelerate the maturity of
          any payment under, any deed of trust, contract, certificate,  consent,
          permit,  license or other  instrument to which it is a party, by which
          it is bound or from which it derives  benefit,  any judgment,  decree,
          order,  rule or regulation of any court or  governmental  authority to
          which it is subject, or any statute or regulation applicable to it, to
          an extent that, in the aggregate, has a material adverse affect on it;

     (t)  no payments of any kind have been made or  authorized  by or on behalf
          of the Purchaser to or on behalf of directors, officers,  shareholders
          or employees of the Purchaser or under any management  agreements with
          the Purchaser other than in the ordinary course of business;

     (u)  the Purchaser does not have any contracts, agreements, undertakings or
          arrangements,  whether  oral,  written  or  implied,  with  employees,
          lessees,  licensees,   managers,   accountants,   suppliers,   agents,
          distributors,  directors,  officers, lawyers or others which cannot be
          terminated, without penalty, on no more than three month's notice;

     (v)  none of  directors,  officers or  employees of the  Purchaser  are now
          indebted  or  under   obligation  to  the  Purchaser  on  any  account
          whatsoever, other than in the ordinary course of business;

     (w)  the  Purchaser  has not committed to making and until the Closing Date
          will not make or commit itself to:

          (i)  guarantee,  or  agree to  guarantee,  any  indebtedness  or other
               obligation of any person or corporation; or

          (ii) waive or surrender any right of material value;

     (x)  until the Closing Date the Purchaser will:

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -13-


          (i)  maintain its assets in a manner consistent with and in compliance
               with applicable law; and

          (ii) not enter into any  material  transaction  or assume or incur any
               material  liability  outside  the normal  course of its  business
               (except as required by the terms of this Agreement);

     (y)  the  shares in the  capital  of the  Purchaser  are not  subject to or
          affected by any actual or, to the best of the  knowledge,  information
          and belief of the  Purchaser,  after  making due  inquiry,  pending or
          threatened  cease  trading,  compliance or denial of use of exemptions
          orders of, or action,  investigation  or proceeding by or before,  any
          securities regulatory authority, court, administrative agency or other
          tribunal;

     (z)  the  making of this  Agreement,  the  completion  of the  transactions
          contemplated   hereby  pursuant  to  any  Formal   Agreement  and  the
          performance of and compliance  with the terms hereof does not and will
          not:

          (i)  conflict  with or  result in a breach  of or  violate  any of the
               terms,  conditions or provisions of the  constating  documents of
               the Purchaser;

          (ii) conflict  with or  result in a breach  of or  violate  any of the
               terms,  conditions  or provisions  of any law,  judgment,  order,
               injunction,   decree,  regulation  or  ruling  of  any  court  or
               governmental  authority,   domestic  or  foreign,  to  which  the
               Purchaser is subject,  or constitute or result in a default under
               any agreement, contract or commitment to which the Purchaser is a
               party;

          (iii)give to any  party  the  right of  termination,  cancellation  or
               acceleration  in or with  respect to any  agreement,  contract or
               commitment to which the Purchaser is a party;

          (iv) give  to  any  government  or  governmental   authority,  or  any
               municipality   or  any   subdivision   thereof,   including   any
               governmental   department,    commission,    bureau,   board   or
               administration agency, any right of termination,  cancellation or
               suspension  of, or  constitute a breach of or result in a default
               under,  any permit,  license,  control or authority issued to the
               Purchaser  which is necessary or desirable in connection with the
               conduct and  operations  of its  business  and the  ownership  or
               leasing of its business assets; or

          (v)  constitute a default by the  Purchaser  or any event which,  with
               the giving of notice or lapse of time or both,  might  constitute
               an event of default, under any agreement,  contract, indenture or
               other  instrument  relating to any  indebtedness of the Purchaser
               which would give any party to that agreement, contract, indenture
               or other  instrument the right to accelerate the maturity for the
               payment of any amount  payable  under that  agreement,  contract,
               indenture or other instrument;

     (aa) save and  except for the  proposed  issuance  of up to 300,000  common
          shares  of the  Company  as a  finder's  fee in  conjunction  with the
          successful  completion  of the  within  Merger,  and  except  for  any
          finder's fees or  commissions  which may be payable or issuable by the
          Purchaser in conjunction  with the completion of its proposed  Private
          Placement (as hereinafter  determined) as set forth  hereinbelow,  the
          Purchaser and each of the Purchaser's  subsidiaries,  if any, have not
          retained,  employed or introduced  any other  broker,  finder or other
          person who would be entitled to a brokerage commission or finder's fee
          arising out of the transactions contemplated hereby;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -14-

     (ab) the  Purchaser  will appoint the directors of the Company as directors
          of the Purchaser and the incumbent directors shall resign as directors
          of the Purchaser, together with the appointment of not less than three
          nominees of the Company as  Executive  Officers of the  Purchaser,  at
          Closing (as hereinafter determined); such appointees or nominees to be
          determined  prior to Closing,  and in the Company's  sole and absolute
          discretion;

     (ac) the  Purchaser's  present  accounts  payable,  which are  estimated at
          approximately  U.S.  $45,274.25 as at June 12, 2003,  will not, except
          for any costs  incurred  by the  Purchaser  in  completing  the within
          purchase  and sale,  increase  by more than ten  percent  (10%) by the
          Closing  Date,  and the  Purchaser  may make  payments to decrease the
          accounts payable before the Closing Date;

     (ad) the  Purchaser  has been  provided  with  certain  advances by parties
          associated with the Purchaser,  approximating  U.S.  $540,290.16 as at
          June 12,  2003,  to which the  Purchaser  has  agreed  to repay  those
          advances and accrued interest by way of the issuance of certain common
          shares of the  Purchaser  immediately  prior to or  subsequent  to the
          Closing  Date;  and except for  certain  further  advances  by parties
          associated  with the Purchaser for costs  incurred by the Purchaser in
          the normal  course of business and in completing  the within  purchase
          and sale,  there will not be any further  advances  outstanding at the
          Closing Date;

     (ae) the Purchaser will use its  commercially  reasonable  efforts prior to
          and/or commensurate with Closing to arrange and advance by way of loan
          (each being a  "FUNDING")  or raise an initial  common  share  private
          placement   funding  (each  being  a  "PRIVATE   PLACEMENT")  for  the
          Purchaser,  under "RULE 506" or  "REGULATION  S" under the  Securities
          Act,  of a minimum  of U.S.  $500,000.00  and a maximum  of up to U.S.
          $1,000,000.00,  and at a Private Placement  subscription  price of not
          less  than  U.S.   $1.00  per   restricted   common  share,   with  an
          understanding to utilize its commercially  reasonable efforts to raise
          not less than U.S. $250,000.00 of the Funding and/or Private Placement
          within 60 calendar days from the acceptance  date of this Agreement by
          the  Company  and the  Vendors  and with a  further  understanding  to
          utilize its commercially  reasonable efforts to raise not less than an
          initial  U.S.  $125,000.00  of the Funding  and/or  Private  Placement
          within 30 calendar days from the acceptance  date of this Agreement by
          the Company and the Vendors;

     (af) the  Purchaser  will  file,  with the  prior  written  consent  of the
          Company,  a "FORM S-8" registration  statement for a stock option plan
          in the  estimated  amount  of up to  4,500,000  common  shares  of the
          Purchaser, at an exercise price of not less than U.S. $0.50 per common
          share (collectively, the "OPTIONS"); and in such amounts and with such
          optionees as may be determined by management for the Purchaser and the
          Company,  acting reasonably,  prior to the Closing Date, and as may be
          acceptable  with  the  appropriate  Regulatory  Authorities;  it being
          acknowledged  and agreed  that,  at present,  all such Options will be
          exchanged as  Purchaser's  Options for the Company's  Options,  on the
          same exercise and pricing terms and conditions, for an equal number of
          incentive  stock  options  in  and  to the  resulting  Purchaser  on a
          post-Consolidation  basis, in consideration of the ongoing involvement
          of the  existing  Company's  Optionholders  in  and  to the  resulting
          Purchaser  company and in exchange for the agreed upon cancellation by
          said Company's Optionholders of all of the then issued and outstanding
          Company's  Options  as a  consequence  thereof;  and it being  further
          acknowledged and agreed that,  subject to applicable  securities laws,
          any  common  shares  which may  arise  from the  exercise  of any such
          Purchaser's  Options  subsequent  to the Closing  Date will be held in
          pool and either (i) sold  jointly  and pro rata with any other  Option
          common shares deposited  therein or (ii) restricted as to sale in such
          maximum daily amounts as may be determined in accordance with the sole
          and absolute  discretion  and direction of such nominee or nominees as
          may be mutually agreed upon in writing,  from time to time, by each of
          the Purchaser and the Company at or subsequent to the Closing Date;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -15-


     (ag) the  Purchaser  will exchange all existing  8,200,000  (4,100,000 on a
          post-Consolidation basis) Company's Warrants, on the same exercise and
          pricing  terms and  conditions,  for an equal  number  of  Purchaser's
          Warrants in and to the  resulting  Purchaser  on a  post-Consolidation
          basis in  consideration,  in part, of the ongoing  involvement  of the
          existing  Company's  Warrantholders in and to the resulting  Purchaser
          company  and in  exchange  for the agreed  upon  cancellation  by said
          Company's  Warrantholders  of all of the then  issued and  outstanding
          Company's Warrants as a consequence thereof;

     (ah) the Purchaser will use its  commercially  reasonable  efforts prior to
          and/or  commensurate  with  the  Closing  to  enter  into  a  proposed
          "CONSULTING   SERVICES   AGREEMENT"   with   Investor   Communications
          International,  Inc.  ("ICI");  a copy of the form of  which  proposed
          Consulting  Services  Agreement being provided with this Agreement and
          forming a material part hereof;

     (ai) the  Purchaser  will  have  acquired  the  necessary  approval  of its
          shareholders,  if  required,  to change the name of the  Purchaser  to
          "Transax  Corp.",  or to such  other  name as the  Company's  Board of
          Directors  may  determine  at  Closing  (as  hereinafter  determined),
          together with the appointment of the existing directors of the Company
          to  the  resulting  Board  of  Directors  of  the  Purchaser  and  the
          appointment  of up to  three  nominees  of the  Company  as  Executive
          Officers of the Purchaser at Closing;  such  appointees or nominees to
          be determined prior to Closing, and in the Company's sole and absolute
          discretion;  and at Closing the  Purchaser  shall be in the process of
          preparing or filing the necessary  documentation  with all  Regulatory
          Authorities  to  effect  the same and  which  shall  include,  without
          limitation,  obtaining a new trading  symbol and CUSIP  number for the
          resulting Purchaser; and

     (aj) it is not  aware  of any  fact or  circumstance  which  has  not  been
          disclosed to the Company and the Vendors  which should be disclosed in
          order  to  prevent  the  representations,   warranties  and  covenants
          contained in this section from being  misleading or which would likely
          affect the  decision of the Company and the Vendors to enter into this
          Agreement or any Formal Agreement.

                                    ARTICLE 4
                         CONDITIONS PRECEDENT TO CLOSING
                         ===============================

4.1       PURCHASER'S  CONDITIONS  PRECEDENT.  All of the obligations of the
Purchaser  under this  Agreement  are, and under any Formal  Agreement  will be,
further subject to at least the following  conditions for the exclusive  benefit
of the Purchaser  fulfilled in all material aspects in the reasonable opinion of
the Purchaser or to be waived by the  Purchaser as soon as possible but,  unless
specifically  indicated as  otherwise,  not later than 10 calendar days prior to
the Closing Date:

     (a)  the Company and the Vendors shall have  complied with all  warranties,
          representations,  covenants and agreements herein and under any Formal
          Agreement  agreed to be  performed  or caused to be  performed  by the
          Company and the Vendors on or before the Closing Date;

     (b)  the Company  shall have  obtained all  authorizations,  approvals  and
          other  actions  by, and have made all  filings  with,  any  securities
          regulatory  authority  from whom any such  authorization,  approval or
          other  action is required  to be obtained or to be made in  connection
          with   the   transactions    contemplated   herein,   and   all   such
          authorizations,  approvals  and other  actions  are in full  force and
          effect and all such filings  have been  accepted and the Company is in
          compliance  with,  and has not committed any breach of, any securities
          laws,  regulations or policies of any securities  regulatory authority
          to which the Company may be subject;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -16-


     (c)  all matters which,  in the opinion of counsel for the  Purchaser,  are
          material in  connection  with the  transactions  contemplated  by this
          Agreement  and  by  any  Formal  Agreement  shall  be  subject  to the
          favourable  opinion of such  counsel,  and all  relevant  records  and
          information shall be supplied to such counsel for that purpose;

     (d)  no material loss or  destruction  of or damage to the Company,  any of
          its assets,  any of the  Company's  Business or the  Purchased  Shares
          shall have occurred;

     (e)  no  action  or  proceeding  at law or in equity  shall be  pending  or
          threatened  by any  person,  company,  firm,  governmental  authority,
          regulatory body or agency to enjoin or prohibit:

          (i)  the  purchase  or  transfer  of  any  of  the  Purchased   Shares
               contemplated by this Agreement and by any Formal Agreement or the
               right of the  Company  or the  Vendors  to  dispose of any of the
               Purchased Shares; or

          (ii) the right of the Company to conduct its  operations and carry on,
               in the normal  course,  its  business  and  operations  as it has
               carried on in the past;

     (f)  delivery  to the  Purchaser  by the  Company  and  the  Vendors,  on a
          confidential basis, of the following documentation and information:

          (i)  a  copy  of  all  material  contracts,  agreements,  reports  and
               information of any nature respecting the Company,  its assets and
               the Company's Business; and

          (ii) details of any lawsuits,  claims or potential  claims relating to
               either the Company,  its assets,  the  Company's  Business or the
               Purchased  Shares of which  either the  Company or the Vendors is
               aware and the Purchaser is unaware;

     (g)  delivery  to the  Purchaser  by  the  Company  of  such  security  and
          supporting  documentation  and instruments  respecting the granting by
          the  Purchaser  to the  Company  of the  within  interim  Loan  as the
          Purchaser's solicitors may reasonably require;

     (h)  the Company and the Vendors will cause the Company, for a period of at
          least five  calendar  days prior to the Closing  Date,  during  normal
          business hours, to:

          (i)  make  available for  inspection by the  solicitors,  auditors and
               representatives  of  the  Purchaser,   at  such  location  as  is
               appropriate, the Company's books, records, contracts,  documents,
               correspondence  and other  written  materials,  and  afford  such
               persons every  reasonable  opportunity to make copies thereof and
               take  extracts  therefrom  at the  sole  cost  of the  Purchaser,
               provided such persons do not unduly  interfere in the  operations
               of the Company;

          (ii) authorize  and permit such  persons at the risk and the sole cost
               of the  Purchaser,  and  only  if  such  persons  do  not  unduly
               interfere in the  operations of the Company,  to attend at all of
               its places of business and  operations  to observe the conduct of
               its business and operations, inspect its assets and make physical
               counts of its inventories, shipments and deliveries; and

          (iii)require  the  Company's  management  personnel  to respond to all
               reasonable  inquiries  concerning  the  Company's  Business,  its
               assets or the conduct of its business relating to its liabilities
               and obligations;

     (i)  the delivery by the Company and Vendors to the Purchaser of an opinion
          of the  solicitors  for the  Company,  in a form  satisfactory  to the
          Purchaser's  solicitors,  dated  as at the  date of  delivery,  to the
          effect that:

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -17-


          (i)  the Company is a corporation duly incorporated  under the laws of
               its respective jurisdiction of incorporation, is validly existing
               and is in good  standing  with respect to all  statutory  filings
               required by the applicable corporate laws;

          (ii) the Company has the  requisite  power,  authority and capacity to
               own and use all of its  assets  and to carry on its  business  as
               presently conducted by it;

          (iii)the  Company,  as the  legal and  beneficial  owner of all of its
               assets,  holds all of the  assets  free and  clear of all  liens,
               charges and claims of others;

          (iv) the number of  authorized  and issued shares in the share capital
               of the Company are as  warranted  by the Company and the Vendors,
               and all of such issued shares are duly authorized, validly issued
               and outstanding as fully paid and non-assessable;

          (v)  all necessary steps and corporate  proceedings have been taken by
               the Company and the Vendors to permit the Purchased  Shares to be
               duly and validly transferred to and registered in the name of the
               Purchaser as at the Closing Date;

          (vi) based on actual knowledge and belief,  such solicitors know of no
               claims,  judgments,  actions, suits,  litigation,  proceedings or
               investigations, actual, pending or threatened, against either the
               Company or the Vendors which might  materially  affect either the
               Company,  its assets or the  Company's  Business  or which  could
               result in any material  liability  to either of the Company,  its
               assets or the Company's Business; and

          (vii)as to all other legal matters of a like nature  pertaining to the
               Vendors,  the Company,  its assets, the Company's Business and to
               the  transactions  contemplated  hereby as the  Purchaser  or the
               Purchaser's solicitors may reasonably require; and

     (j)  completion  by  the  Purchaser  and by  the  Purchaser's  professional
          advisors of a thorough due diligence and operations review of both the
          business   and   operations   of  the   Company   together   with  the
          transferability  of the  Purchased  Shares  as  contemplated  by  this
          Agreement and by any Formal Agreement.

4.2       COMPANY'S AND VENDORS' CONDITIONS PRECEDENT. All of the obligations of
the Company  and the  Vendors  under this  Agreement  are,  and under any Formal
Agreement will be, further subject to at least the following  conditions for the
exclusive  benefit of the  Company  and the Vendors  fulfilled  in all  material
aspects in the reasonable opinion of the Company and the Vendors or to be waived
by the  Company and the Vendors as soon as  possible  but,  unless  specifically
indicated  as  otherwise,  not later than 10 calendar  days prior to the Closing
Date:

     (a)  the   Purchaser    shall   have   complied   with   all    warranties,
          representations,  covenants and agreements herein and under any Formal
          Agreement  agreed to be  performed  or caused to be  performed  by the
          Purchaser on or before the Closing Date;

     (b)  all matters  which,  in the opinion of counsel for the Company and the
          Vendors, are material in connection with the transactions contemplated
          by this Agreement and by any Formal  Agreement shall be subject to the
          favourable  opinion of such  counsel,  and all  relevant  records  and
          information shall be supplied to such counsel for that purpose;

     (c)  no material loss or  destruction  of or damage to the Purchaser  shall
          have occurred;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -18-


     (d)  delivery  to the  Company  and  the  Vendors  by the  Purchaser,  on a
          confidential basis, of the following documentation and information:

          (i)  a copy of all material contracts,  agreements,  reports and title
               information of any nature respecting the Purchaser; and

          (ii) details of any lawsuits,  claims or potential  claims relating to
               the Purchaser of which the Purchaser is aware and the Company and
               the Vendors are unaware;

     (e)  the Purchaser  will, for a period of at least five calendar days prior
          to the Closing Date, during normal business hours:

          (i)  make  available for  inspection by the  solicitors,  auditors and
               representatives of the Company and the Vendors,  at such location
               as  is  appropriate,  all  of  the  Purchaser's  books,  records,
               contracts, documents, correspondence and other written materials,
               and afford such  persons  every  reasonable  opportunity  to make
               copies  thereof and take  extracts  therefrom at the sole cost of
               the Company and the Vendors,  provided such persons do not unduly
               interfere in the operations of the Purchaser;

          (ii) authorize  and permit such  persons at the risk and the sole cost
               of the Company and the  Vendors,  and only if such persons do not
               unduly interfere in the operations of the Purchaser, to attend at
               all of its places of  business  and  operations  to  observe  the
               conduct of its business and  operations,  inspect its  properties
               and assets and make physical counts of its inventories, shipments
               and deliveries; and

          (iii)require the  Purchaser's  management  personnel to respond to all
               reasonable  inquiries  concerning the Purchaser's business assets
               or the conduct of its business  relating to its  liabilities  and
               obligations; and

     (f)  completion  by the Company and the Vendors,  and by the  Company's and
          the Vendors'  professional  advisors,  of a thorough due diligence and
          operations   review  of  both  the  business  and  operations  of  the
          Purchaser.

4.3       PARTIES' CONDITIONS PRECEDENT. The closing of any Formal Agreement and
the rights,  obligations and duties of the Parties arising upon and prior to the
Closing Date shall also be conditional upon and subject to:

     (a)  the  specific  ratification  of  the  terms  and  conditions  of  this
          Agreement by each of the Board of Directors of the  Purchaser  and the
          Company within three  business days of the due and complete  execution
          of this  Agreement by each of the Parties  hereto  (collectively,  the
          "RATIFICATION");

     (b)  the  completion by each of the Purchaser and the Company of an initial
          due diligence and  operations  review of the other Party's  respective
          businesses  and  operations  within  five  business  days of the prior
          satisfaction  of the  Ratification  (collectively,  the  "INITIAL  DUE
          DILIGENCE");

     (c)  the  execution  of a Formal  Agreement  as between  the  Company,  the
          Vendors and the Purchaser  incorporating  terms and conditions similar
          to those contained in this Agreement on or before June 30, 2003;

     (d)  if required,  on or before July 31, 2003 shareholders of the Purchaser
          passing  an  ordinary   resolution  or,  where  required,   a  special
          resolution,  approving the terms and  conditions of this Agreement and
          all of the transactions contemplated hereby, and the Purchaser sending

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -19-


          all required  notice to the  Purchaser's  shareholders  in  connection
          therewith,  or, in the alternative and if allowable in accordance with
          applicable   corporate  and  securities  laws,   shareholders  of  the
          Purchaser  holding one hundred  percent (100%) of the issued shares of
          the Purchaser providing written consent  resolutions  evidencing their
          approval to the terms and  conditions of this Agreement and all of the
          transactions  contemplated  hereby together with  certification of any
          required  notice to all  shareholders of the Purchaser of such written
          consent resolutions;

     (e)  the receipt of all necessary  approvals from any Regulatory  Authority
          having  jurisdiction  over  the  transactions   contemplated  by  this
          Agreement and by any Formal Agreement on or before August 5, 2003; and

     (f)  on or before August 5, 2003 the directors of the Purchaser  and/or the
          shareholders  of the Purchaser,  if required,  approving of the within
          issuance by the  Purchaser to the order and direction of the Vendor of
          all of the  referenced  Shares in accordance  with sections  "1.2" and
          "1.3" hereinabove and, in addition,  the directors and/or shareholders
          of the Purchaser,  if required,  having also approved and received any
          required notice of:

          (i)  the change of name of the  Purchaser  to "Transax  Corp.",  or to
               such  other  name  as may be  determined  by  management  for the
               Company,  in its  sole  and  absolute  discretion,  prior  to the
               Closing  Date,  and as may be  acceptable  with  the  appropriate
               Regulatory Authorities;

          (ii) the  appointment of the existing  directors of the Company to the
               resulting Board of Directors of the Purchaser,  together with the
               appointment  of not less than three  nominees  of the  Company as
               Executive Officers of the Purchaser,  at Closing; such appointees
               or  nominees  to be  determined  prior  to  Closing,  and  in the
               Company's sole and absolute discretion;

          (iii)a Funding(s) and/or Private  Placement(s) in and to the Purchaser
               in the aggregate amount of not less than U.S.  $500,000.00 and up
               to U.S.  $1,000,000.00,  with any such Private  Placement funding
               being comprised of restricted common shares of the Purchaser at a
               subscription  price of not less than U.S. $1.00 per common share;
               and  in  such  amounts  and  with  such  subscribers  as  may  be
               determined  by  management  for the  Purchaser  and the  Company,
               acting  reasonably,  prior to the Closing Date. In this regard it
               is  hereby  also  acknowledged  and  agreed  that at  least  U.S.
               $250,000.00  of the initial U.S.  $500,000.00  raised in any such
               Funding and/or Private Placement may take the form of the secured
               Loan  from  the   Purchaser   to  the  Company  as   contemplated
               hereinabove;

          (iv) the filing by the  Purchaser,  with the prior written  consent of
               the Company,  of a Form S-8  registration  statement  for a stock
               option plan in the  estimated  amount of up to  4,500,000  common
               shares of the  Purchaser,  at an exercise  price of not less than
               U.S.  $0.50 per common  share;  and in such amounts and with such
               optionees as may be determined  by  management  for the Purchaser
               and the Company,  acting  reasonably,  prior to the Closing Date,
               and  as  may  be  acceptable  with  the  appropriate   Regulatory
               Authorities;  it being  acknowledged and agreed that, at present,
               all such Options will be exchanged as Purchaser's Options for the
               Company's  Options,  on the same  exercise and pricing  terms and
               conditions, for an equal number of incentive stock options in and
               to the  resulting  Purchaser on a  post-Consolidation  basis,  in
               consideration   of  the  ongoing   involvement  of  the  existing
               Company's Optionholders in and to the resulting Purchaser company
               and  in  exchange  for  the  agreed  upon  cancellation  by  said
               Company's Optionholders of all of the then issued and outstanding
               Company's Options as a consequence  thereof; and it being further
               acknowledged  and agreed that,  subject to applicable  securities

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -20-

               laws,  any common shares which may arise from the exercise of any
               such Purchaser's  Options  subsequent to the Closing Date will be
               held in pool and  either (i) sold  jointly  and pro rata with any
               other Option common shares  deposited  therein or (ii) restricted
               as to sale in such maximum  daily amounts as may be determined in
               accordance with the sole and absolute discretion and direction of
               such  nominee  or  nominees  as may be  mutually  agreed  upon in
               writing,  from  time to time,  by each of the  Purchaser  and the
               Company at or subsequent to the Closing Date;

          (v)  the Purchaser's  exchange of all existing 8,200,000 (4,100,000 on
               a  post-Consolidation  basis)  Company's  Warrants,  on the  same
               exercise and pricing terms and conditions, for an equal number of
               Purchaser's  Warrants  in  and to the  resulting  Purchaser  on a
               post-Consolidation  basis  in  consideration,  in  part,  of  the
               ongoing  involvement of the existing Company's  Warrantholders in
               and to the  resulting  Purchaser  company and in exchange for the
               agreed upon cancellation by said Company's  Warrantholders of all
               of the  then  issued  and  outstanding  Company's  Warrants  as a
               consequence thereof;

          (vi) the entering into by the Purchaser  prior to and/or  commensurate
               with the Closing  hereunder of the proposed  Consulting  Services
               Agreement  with  ICI;  a  copy  of the  form  of  which  proposed
               Consulting  Services Agreement being provided with this Agreement
               and forming a material part hereof; and

          (vii)such other  matters as may be agreed to as  between  the  Parties
               hereto prior the completion of the  transactions  contemplated by
               this Agreement.

4.4       COMPANY'S AND VENDORS' ADDITIONAL DOCUMENT COVENANTS.  The Company and
the Vendors will also deliver,  or caused to be delivered to the Purchaser prior
to the  Closing  Date,  an  independent  assessment  report  and  business  plan
respecting  the Company's  Business and assets  together with such corporate and
asset status  reports  and/or  opinions  respecting  the Company's  Business and
assets, as may be required by either the Purchaser or any Regulatory  Authority,
prepared,  at a minimum,  in accordance with the applicable  rules and reporting
guidelines of the Commission.

                                    ARTICLE 5
                          CLOSING AND EVENTS OF CLOSING
                          =============================

5.1       CLOSING AND CLOSING DATE. The closing of the within purchase and
delivery of the Purchased  Shares,  in  conjunction  with any formal  Agreement,
together with all of the transactions  contemplated by this Agreement and by any
Formal  Agreement,  shall occur on the day which is five calendar days following
the satisfaction of all of the conditions precedent which are set out in Article
"4" hereinabove, or on such earlier or later Closing Date as may be agreed to in
advance and in writing by each of the Parties hereto,  and will be closed at the
offices of solicitors for the Company, Devlin Jensen, Barristers and Solicitors,
located at Suite 2550, 555 West Hastings Street,  Vancouver,  British  Columbia,
V6B 4N5, at 2:00 p.m. (Vancouver time) on the Closing Date.

5.2       LATEST CLOSING DATE. If the Closing Date has not occurred by August
31, 2003 this Agreement will be terminated and unenforceable  unless the Parties
hereto agree in writing to grant an extension of the Closing Date.

5.3       DOCUMENTS  TO BE DELIVERED BY THE COMPANY AND THE VENDORS PRIOR TO THE
CLOSING DATE. Not later than two calendar days prior to the Closing Date, and in
addition to the documentation which is required by the agreements and conditions
precedent  which are set forth  hereinabove,  the Company and the Vendors  shall
also  execute and  deliver or cause to be  delivered  all such other  documents,
resolutions and  instruments as may be necessary,  in the opinion of counsel for

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -21-


the Purchaser, acting reasonably, to transfer all of the Purchased Shares to the
Purchaser  free  and  clear  of all  liens,  charges  and  encumbrances,  and in
particular including, but not being limited to:

     (a)  all  documentation  as may be necessary  and as may be required by the
          solicitors for the Purchaser, acting reasonably, to ensure that all of
          the  Purchased  Shares  have  been   transferred,   assigned  and  are
          registerable in the name of and for the benefit of the Purchaser under
          all applicable corporate and securities laws;

     (b)  if required, certificates representing the Purchased Shares registered
          in  the  name  of the  Vendors,  duly  endorsed  for  transfer  to the
          Purchaser or  irrevocable  stock  powers  transferring  the  Purchased
          Shares to the  Purchaser  or, in the  alternative  and if  applicable,
          confirmation  that the Purchased Shares will have been acquired by the
          Purchaser through the operation of the proposed Closing of the Merger;

     (c)  if  required,   a  certificate   representing   the  Purchased  Shares
          registered in the name of the Purchaser;

     (d)  a  certified  copy of the  resolutions  of the  directors  (and of the
          Vendors and shareholders, if necessary) of the Company authorizing the
          Merger  and/or the  transfer  by the Vendors to the  Purchaser  of the
          Purchased Shares;

     (e)  a copy of all  corporate  records  and books of account of the Company
          and including,  without  limiting the  generality of the foregoing,  a
          copy of all minute books,  share  register  books,  share  certificate
          books and annual reports of the Company;

     (f)  all necessary  consents and approvals in writing to the  completion of
          the transactions contemplated herein;

     (g)  a  certificate  of an officer of the Company,  dated as of the Closing
          Date,  acceptable in form to the solicitors for the Purchaser,  acting
          reasonably, certifying that the warranties, representations, covenants
          and   agreements  of  the  Company  and  the  Vendors   contained  in,
          respectively,  this Agreement and in any Formal Agreement are true and
          correct in all respects and will be true and correct as of the Closing
          Date as if made by the Company and the Vendors on the Closing Date;

     (h)  an opinion of counsel to the Company and the Vendors,  dated as at the
          Closing Date, and addressed to the Purchaser and its counsel,  in form
          and  substance   satisfactory  to  the  Purchaser's  counsel,   acting
          reasonably, and including the following:

          (i)  the due incorporation,  existence and standing of the Company and
               its qualification to carry on business;

          (ii) the authorized and issued capital of the Company;

          (iii)that all Purchased  Shares have been duly  authorized  and issued
               and are fully paid and non-assessable;

          (iv) all necessary steps and proceedings have been taken in connection
               with the execution,  delivery and  performance of this Agreement,
               any Formal Agreement and the transactions contemplated herein and
               therein, respectively; and

          (v)  that the Purchased Shares have been duly issued to and registered
               in the name of the  Purchaser in compliance  with all  applicable
               corporate and securities laws;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -22-

     (i)  consents to act or other  documents  as may be required in  connection
          with the appointment of any nominee or nominees of the Company and the
          Vendors to the Board of Directors of the Purchaser; and

     (j)  all such other documents and instruments as the Purchaser's solicitors
          may reasonably require.

5.4       DOCUMENTS TO BE DELIVERED BY THE PURCHASER  PRIOR TO THE CLOSING DATE.
Not later than two calendar days prior to the Closing  Date,  and in addition to
the documentation  which is required by the agreements and conditions  precedent
which are set forth hereinabove, the Purchaser shall also execute and deliver or
cause to be delivered all such  documents,  resolutions  and  instruments as are
necessary,  in the opinion of counsel for the  Company and the  Vendors,  acting
reasonably,  to  effectively  accept the transfer to the Purchaser of all right,
entitlement  and interest in and to the  Purchased  Shares free and clear of all
liens,  charges and  encumbrances,  and in particular  including,  but not being
limited to:

     (a)  if  required,  a  certified  copy  of an  ordinary  resolution  of the
          shareholders  of the Purchaser  approving the terms and  conditions of
          this Agreement, any Formal Agreement and the transactions contemplated
          hereby  and  thereby  or,  in  the  alternative,  shareholders  of the
          Purchaser  holding one hundred  percent (100%) of the issued shares of
          the Purchaser providing written consent  resolutions  evidencing their
          approval to the terms and  conditions of this Agreement and any Formal
          Agreement;

     (b)  a certified copy of the  resolutions of the directors of the Purchaser
          providing  for the  approval of all of the  transactions  contemplated
          hereby and including, without limitation, each of the matters provided
          for in paragraph "4.3(f)" hereinabove;

     (c)  an executed  treasury order of the Purchaser  providing for all of the
          Purchase  Price Shares in the names of the Vendors in accordance  with
          sections "1.2" and "1.3" hereinabove;

     (d)  all necessary  consents and approvals in writing to the  completion of
          the transactions contemplated herein;

     (e)  a certificate of an officer of the Purchaser,  dated as of the Closing
          Date,  acceptable  in form to the  solicitors  for the Company and the
          Vendors,   acting   reasonably,   certifying   that  the   warranties,
          representations,  covenants and agreements of the Purchaser  contained
          in, respectively,  this Agreement and in any Formal Agreement are true
          and correct and will be true and correct as of the Closing  Date as if
          made by the Purchaser on the Closing Date;

     (f)  the  resignations  in writing of such of the  existing  directors  and
          officers of the  Purchaser as may be requested by  management  for the
          Company;

     (g)  a certified copy of the  resolutions of the directors of the Purchaser
          accepting  the  resignations  of such of the  existing  directors  and
          officers of the  Purchaser as may be requested by  management  for the
          Company  and, in  addition,  appointing  such  persons as officers and
          members of the Board of  Directors  of the  Company as the Company and
          the Vendors may so determine in writing,  from time to time,  in their
          sole and absolute discretion, prior to the Closing Date;

     (h)  an opinion of counsel to the Purchaser,  dated as at the Closing Date,
          and  addressed  to the  Company,  the  Vendors  and  their  respective
          counsel,  in form and substance  satisfactory to the Company's and the
          Vendors'  respective  counsel,  acting  reasonably,  and including the
          following:

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -23-

          (i)  the due  incorporation,  existence  and standing of the Purchaser
               and its qualification to carry on business;

          (ii) the authorized and issued capital of the Purchaser  (relying on a
               certificate  of the registrar and transfer agent of the Purchaser
               as to the number of securities issued);

          (iii)all  necessary   steps  and   proceedings   have  been  taken  in
               connection  with the execution,  delivery and performance of this
               Agreement, any Formal Agreement and the transactions contemplated
               herein and therein, respectively; and

          (iv) the due  issuance of the Shares as fully paid and  non-assessable
               and  having  been  issued  in   accordance   with  an  applicable
               registration  and  prospectus   exemption   available  under  the
               Securities Act; and

     (i)  all such other  documents  and  instruments  as the  Company's and the
          Vendors' respective solicitors may reasonably require.

                                    ARTICLE 6
                        DUE DILIGENCE AND NON-DISCLOSURE
                        ================================

6.1       DUE  DILIGENCE.  Each of the Parties  shall  forthwith  conduct such
further due diligence examination of the other Parties as it deems appropriate.

6.2       CONFIDENTIALITY.  Each  Party  may in a  reasonable  manner  carry out
such  investigations  and due  diligence as to the other  Parties,  at all times
subject to the  confidentiality  provisions  hereinbelow,  as each  Party  deems
necessary.  In that  regard  the  Parties  agree  that each  shall have full and
complete access to the other Parties' books,  records,  financial statements and
other  documents,  articles  of  incorporation,  by-laws,  minutes  of  Board of
Directors'  meetings  and  its  committees,   investment  agreements,   material
contracts and as well such other  documents  and  materials as the Vendors,  the
Company or the Purchaser,  or their respective  solicitors,  may deem reasonable
and necessary to conduct an adequate due diligence  investigation of each Party,
its respective operations and financial condition prior to the Closing Date.

6.3       NON-DISCLOSURE.  Subject to the provisions  hereinbelow,  the Parties,
for themselves, their officers, directors, shareholders,  consultants, employees
and agents agree that they each will not  disseminate or disclose,  or knowingly
allow,  permit or cause others to  disseminate  or disclose to third parties who
are not subject to express or implied covenants of confidentiality,  without the
other Parties'  express written  consent,  either:  (i) the fact or existence of
this Agreement or discussions and/or negotiations between them involving,  INTER
ALIA, possible business transactions;  (ii) the possible substance or content of
those  discussions;  (iii) the  possible  terms and  conditions  of any proposed
transaction;  (iv) any statements or representations (whether verbal or written)
made by either Party in the course of or in connection  with those  discussions;
or (v) any  written  material  generated  by or on  behalf of any Party and such
contacts,  other  than  such  disclosure  as may be  required  under  applicable
securities legislation or regulations, pursuant to any order of a court or on a
"need to know" basis to each of the Parties respective professional advisors.

6.4       PUBLIC ANNOUNCEMENTS.  Notwithstanding the provisions of this Article,
the Parties agree to make such public  announcements of this Agreement  promptly
upon its execution in accordance with the requirements of applicable  securities
legislation and regulations.


                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -24-

                                    ARTICLE 7
                            ASSIGNMENT AND AMENDMENT
                            ========================

7.1       ASSIGNMENT.  Save and except as provided herein, no Party may sell,
assign, pledge or mortgage or otherwise encumber all or any part of its interest
herein without the prior written consent of all of the other Parties hereto.

7.2       AMENDMENT.  This Agreement and any provision  thereof may only be
amended  in  writing  and  only by duly  authorized  signatories  of each of the
respective Parties hereto.

                                    ARTICLE 8
                                  FORCE MAJEURE
                                  =============

8.1       EVENTS. If any Party hereto is at any time prevented or delayed in
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour  shortages,  power  shortages,  fires,  wars,  acts of God,  earthquakes,
storms,   floods,   explosions,   accidents,   protests  or   demonstrations  by
environmental  lobbyists  or native  rights  groups,  delays in  transportation,
breakdown  of  machinery,  inability to obtain  necessary  materials in the open
market, unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that  Party,  then the time  limited  for the  performance  by that Party of its
respective  obligations hereunder shall be extended by a period of time equal in
length to the period of each such prevention or delay.

8.2       NOTICE. A Party shall,  within seven calendar days, give notice to the
other Parties of each event of FORCE  MAJEURE  under section "8.1"  hereinabove,
and upon  cessation of such event shall furnish the other Parties with notice of
that  event  together  with  particulars  of the  number  of days by  which  the
obligations  of that Party  hereunder have been extended by virtue of such event
of FORCE MAJEURE and all preceding events of FORCE MAJEURE.

                                    ARTICLE 9
                                   ARBITRATION
                                   ===========

9.1       MATTERS FOR ARBITRATION.  The Parties agree that all questions or
matters  in  dispute  with  respect  to this  Agreement  shall be  submitted  to
arbitration pursuant to the terms hereof.

9.2       NOTICE.  It shall be a  condition  precedent to the right of any Party
to submit any matter to arbitration  pursuant to the provisions  hereof that any
Party  intending  to refer any matter to  arbitration  shall have given not less
than two calendar  days' prior  written  notice of its intention to do so to the
other  Parties  together  with  particulars  of the  matter in  dispute.  On the
expiration  of such two calendar days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "9.3" hereinbelow.

9.3       APPOINTMENTS.  The Party desiring  arbitration shall appoint one
arbitrator,  and shall  notify the other  Parties of such  appointment,  and the
other  Parties  shall,  within two calendar  days after  receiving  such notice,
appoint an arbitrator,  and the two arbitrators so named,  before  proceeding to
act,  shall,  within five calendar days of the appointment of the last appointed
arbitrator,  unanimously agree on the appointment of a third arbitrator,  to act
with them and be  chairperson  of the  arbitration  herein  provided for. If the
other Parties shall fail to appoint an arbitrator within two calendar days after
receiving  notice of the  appointment  of the first  arbitrator,  and if the two
arbitrators appointed by the Parties shall be unable to agree on the appointment
of the chairperson,  the chairperson  shall be appointed under the provisions of
the  COMMERCIAL  ARBITRATION  ACT (British  Columbia) (the  "ARBITRATION  ACT").
Except as  specifically  otherwise  provided in this  section,  the  arbitration
herein provided for shall be conducted in accordance with such  Arbitration Act.
The  chairperson,  or in the case where only one  arbitrator is  appointed,  the
single  arbitrator,  shall fix a time and place in Vancouver,  British Columbia,
for the purpose of hearing the evidence and representations of the Parties,  and

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --


TRANSAX LIMITED
June 19, 2003

                                      -25-

he shall preside over the  arbitration  and determine all questions of procedure
not provided for under such  Arbitration Act or this section.  After hearing any
evidence and representations that the Parties may submit, the single arbitrator,
or the arbitrators,  as the case may be, shall make an award and reduce the same
to writing,  and deliver one copy thereof to each of the Parties. The expense of
the arbitration shall be paid as specified in the award.

9.4       AWARD. The Parties agree that the award of a majority of the
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.

                                   ARTICLE 10
                                   TERMINATION
                                   ===========

10.1      DEFAULT.  The Parties  hereto agree that if any Party hereto is in
default with respect to any of the provisions of this  Agreement  (herein called
the  "DEFAULTING   PARTY"),   the   non-defaulting   Party  (herein  called  the
"NON-DEFAULTING  PARTY") shall give notice to the Defaulting  Party  designating
such default,  and within 14 calendar days after its receipt of such notice, the
Defaulting Party shall either:

     (a)  cure such default,  or commence  proceedings  to cure such default and
          prosecute the same to completion without undue delay; or

     (b)  give the Non-Defaulting  Party notice that it denies that such default
          has occurred and that it is submitting  the question to arbitration as
          herein provided.

10.2      ARBITRATION.  If arbitration is sought, a Party shall not be deemed in
default  until the matter  shall  have been  determined  finally by  appropriate
arbitration under the provisions of Article "9" hereinabove.

10.3      CURING THE DEFAULT.   If:

     (a)  the default is not so cured or the Defaulting  Party does not commence
          or diligently proceed to cure the default; or

     (b)  arbitration is not so sought; or

     (c)  the  Defaulting  Party is found in  arbitration  proceedings  to be in
          default,  and fails to cure it within  five  calendar  days  after the
          rendering of the arbitration award,

the Non-Defaulting  Parties may, by written notice given to the Defaulting Party
at  any  time  while  the  default  continues,  terminate  the  interest  of the
Defaulting Party in and to this Agreement.

10.4      TERMINATION.  In addition to the foregoing it is hereby  acknowledged
and agreed by the Parties  hereto that this  Agreement will be terminated in the
event that:

     (a)  the entire  Ratification is not received within three business days of
          the due  and  complete  execution  of  this  Agreement  by each of the
          Parties hereto;

     (b)  each of the Purchaser and the Company fails to complete an Initial Due
          Diligence  review  of  the  other  Party's  respective   business  and
          operations within five business days of the prior  satisfaction of the
          Ratification;

     (c)  a Formal  Agreement  as  between  the  Company,  the  Vendors  and the
          Purchaser   incorporating   terms  and  conditions  similar  to  those
          contained in this  Agreement is not entered into on or before June 30,
          2003;

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -26-

     (d)  the conditions  specified in section "4.3"  hereinabove  have not been
          satisfied by August 15, 2003;

     (e)  either of the Parties  hereto has not either  satisfied or waived each
          of  their  respective   conditions   precedent  prior  to  Closing  in
          accordance with the provisions of Article "4" hereinabove;

     (f)  the final  Closing has not  occurred  on or before  August 31, 2003 in
          accordance with section "5.2" hereinabove; or

     (g)  by agreement,  in writing, of each of the Company, the Vendors and the
          Purchaser;

and in such event, unless waived by each Party hereto in advance and in writing,
this  Agreement  will be terminated  and be of no further force and effect other
than the obligations under Article "6" hereinabove.

                                   ARTICLE 11
                                     NOTICE
                                     ======

11.1      NOTICE. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and shall be sent
by prepaid  registered  mail  deposited in a post office  addressed to the Party
entitled to receive the same,  or  delivered  to such Party,  at the address for
such Party specified above. The date of receipt of such notice,  demand or other
communication  shall be the date of delivery thereof if delivered,  or, if given
by registered  mail as aforesaid,  shall be deemed  conclusively to be the third
calendar  day after the same shall  have been so  mailed,  except in the case of
interruption  of postal  services for any reason  whatsoever,  in which case the
date of  receipt  shall  be the  date on  which  the  notice,  demand  or  other
communication is actually received by the addressee.

11.2      CHANGE  OF  ADDRESS.  Either  Party  may at any time and from time to
time  notify the other  Parties  in  writing of a change of address  and the new
address to which notice shall be given to it thereafter until further change.

                                   ARTICLE 12
                               GENERAL PROVISIONS
                               ==================

12.1      ENTIRE AGREEMENT.  This Agreement  constitutes the entire agreement to
date  between  the  Parties  hereto and  supersedes  every  previous  agreement,
communication,   expectation,  negotiation,   representation  or  understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties with respect to the subject matter of this Agreement.

12.2      ENUREMENT.  This Agreement will enure to the benefit of and will be
binding upon the Parties, their respective heirs, executors,  administrators and
assigns.

12.3      TIME OF THE ESSENCE.   Time will be of the essence of this Agreement.

12.4      REPRESENTATION AND COSTS. It is hereby acknowledged by each of the
Parties hereto that Devlin Jensen,  Barristers and  Solicitors,  acts solely for
the Purchaser,  and,  correspondingly,  that each of the Vendors and the Company
have  been  required  by each of  Devlin  Jensen  and the  Purchaser  to  obtain
independent legal advice with respect to their respective  reviews and execution
of this Agreement.  In addition, it is hereby further acknowledged and agreed by
the Parties hereto that Devlin Jensen, Barristers and Solicitors, and certain or

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -27-

all of its principal  owners or associates,  from time to time, may have both an
economic or shareholding  interest in and to the Company and/or a fiduciary duty
to the same arising from either a previous directorship,  officership or similar
relationship  arising  out of the  request of the  Company  for  certain of such
persons to act in a similar capacity while previously  acting for the Company as
counsel.  Correspondingly,  and even where, as a result of this  Agreement,  the
consent  of each  Party  hereto  to the  role and  capacity  of  Devlin  Jensen,
Barristers and Solicitors,  and its principal owners and associates, as the case
may be, is  deemed  to have been  received,  where  any  conflict  or  perceived
conflict  may arise,  or be seen to arise,  as a result of any such  capacity or
representation,  each Party hereto acknowledges and agrees to, once more, obtain
independent  legal advice in respect of any such conflict or perceived  conflict
and, consequent thereon, Devlin Jensen, Barristers and Solicitors, together with
any such principal owners or associates, as the case may be, shall be at liberty
at any time to resign any such  position if it or any Party hereto is in any way
affected or uncomfortable with any such capacity or  representation.  Each Party
to this Agreement will also bear and pay its own costs, legal and otherwise,  in
connection  with  its  respective  preparation,  review  and  execution  of this
Agreement and, in particular, that the costs involved in the preparation of this
Agreement,  and all  documentation  necessarily  incidental  thereto,  by Devlin
Jensen, Barristers and Solicitors, shall be at the cost of the Purchaser.

12.5      APPLICABLE LAW. The situs of this Agreement is Vancouver, British
Columbia,  and for all purposes this Agreement  will be governed  exclusively by
and construed and enforced in accordance with the laws and Courts  prevailing in
the State of Colorado, U.S.A.

12.6      FURTHER ASSURANCES. The Parties hereto hereby, jointly and  severally,
covenant and agree to forthwith,  upon request, execute and deliver, or cause to
be executed and delivered,  such further and other deeds, documents,  assurances
and  instructions  as may be required by the Parties hereto or their  respective
counsel in order to carry out the true nature and intent of this Agreement.

12.7      SEVERABILITY AND CONSTRUCTION.  Each Article, section,  paragraph,
term  and  provision  of this  Agreement,  and any  portion  thereof,  shall  be
considered  severable,  and if, for any reason, any portion of this Agreement is
determined to be invalid, contrary to or in conflict with any applicable present
or future law, rule or regulation in a final  unappealable  ruling issued by any
court,  agency or tribunal with valid jurisdiction in a proceeding to any of the
Parties  hereto is a party,  that ruling shall not impair the  operation  of, or
have any other effect upon,  such other portions of this Agreement as may remain
otherwise  intelligible  (all of which shall  remain  binding on the Parties and
continue  to be given  full  force and  agreement  as of the date upon which the
ruling becomes final).

12.8      CAPTIONS.  The captions, section numbers and Article numbers appearing
in this Agreement are inserted for convenience of reference only and shall in no
way define,  limit,  construe or describe the scope or intent of this  Agreement
nor in any way affect this Agreement.

12.9      CURRENCY. Unless otherwise stipulated, all references to money amounts
hereunder shall be in lawful money of Canada.

12.10     COUNTERPARTS.  This  Agreement may be signed by the Parties  hereto in
as many counterparts as may be necessary,  and via facsimile if necessary,  each
of which so signed being deemed to be an original and such counterparts together
constituting  one and the  same  instrument  and,  notwithstanding  the  date of
execution, being deemed to bear the effective execution date as set forth on the
front page of this Agreement.

12.11     NO PARTNERSHIP OR AGENCY.  The Parties have not created a partnership
and  nothing  contained  in  this  Agreement  shall  in  any  manner  whatsoever
constitute  any Party the partner,  agent or legal  representative  of any other
Party,  nor create  any  fiduciary  relationship  between  them for any  purpose
whatsoever.  No Party  shall  have any  authority  to act for,  or to assume any
obligations  or  responsibility  on behalf of, any other party except as may be,
from time to time,  agreed upon in writing  between the Parties or as  otherwise
expressly provided.

12.12     CONSENTS AND WAIVERS.  No consent or waiver expressed or implied by
either Party in respect of any breach or default by the other in the performance
by such other of its obligations hereunder shall:

                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --



TRANSAX LIMITED
June 19, 2003

                                      -28-

     (a)  be valid  unless it is in writing and stated to be a consent or waiver
          pursuant to this section;

     (b)  be  relied  upon as a consent  to or  waiver  of any  other  breach or
          default of the same or any other obligation;

     (c)  constitute a general waiver under this Agreement; or

     (d)  eliminate or modify the need for a specific consent or waiver pursuant
          to this section in any other or subsequent instance.

                            ACCEPTANCE AND EXECUTION
                            ========================

It is  expressly  understood  and agreed that as soon as  practicable  after the
execution of this Agreement the undersigned will use their best efforts to enter
into a Formal  Agreement  incorporating  the terms  and  conditions  hereof,  in
addition to normal  share  purchase  and Merger  terms and  conditions,  and the
undersigned  hereto  hereby,  jointly  and  severally,  covenant  and  agree  to
forthwith,  upon  request,  execute and  deliver,  or cause to be  executed  and
delivered, such further and other deeds, documents,  assurances and instructions
as may be  required by the  undersigned  hereto or their  respective  counsel in
order to carry out the true nature and intent of this Agreement and any such any
Formal Agreement. AT ALL TIMES THE UNDERSIGNED HERETO ACKNOWLEDGE AND AGREE THAT
THE  COMPLETION OF ANY SUCH FORMAL  AGREEMENT AND MERGER IS SUBJECT TO THE PRIOR
RATIFICATION  AND  APPROVAL  OF THE  TERMS  AND  CONDITIONS  OF ANY SUCH  FORMAL
AGREEMENT AND MERGER BY THE BOARD OF DIRECTORS AND, IF APPLICABLE,  SHAREHOLDERS
OF THE PURCHASER, EACH OF THE VENDORS, THE BOARD OF DIRECTORS OF THE COMPANY AND
SUCH REGULATORY  AUTHORITIES AS MAY HAVE  JURISDICTION  OVER THE PURCHASER,  THE
COMPANY AND THE VENDORS.

     Please  acknowledge  your acceptance of the general terms of this Agreement
by kindly  executing the same in the space provided  hereinbelow.  This offer is
only open for acceptance until 5:00 p.m. (Vancouver time) on June 23, 2003.

               Yours very truly,

               VEGA-ATLANTIC CORPORATION
               Per:
                                    "GRANT ATKINS"
               _________________________________________________________________
               GRANT ATKINS, Authorized Signatory for the Purchaser

     THE WITHIN OFFER AND TERMS OF AGREEMENT ARE HEREBY  ACCEPTED BY EACH OF THE
COMPANY AND THE VENDOR EFFECTIVE ON THIS 19TH DAY OF JUNE, 2003:

               TRANSAX LIMITED
               Per:
                                  "STEPHEN WALTERS"
               _________________________________________________________________
               STEPHEN WALTERS, Authorized Signatory for the Company

               TRANSAX LIMITED ON BEHALF OF THE VENDORS AND THE MAJORITY VENDOR
               Per:
                                   "STEPHEN WALTERS"
               _________________________________________________________________
               STEPHEN WALTERS, On behalf of the Vendors and the Majority Vendor

                                __________



                          -- AGREEMENT IN PRINCIPLE --
                        -- VEGA-ATLANTIC CORPORATION --





                                    EXHIBIT 1
                            VEGA-ATLANTIC CORPORATION
                         SPECIAL MEETING OF SHAREHOLDERS
                                 AUGUST 8, 2003
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned shareholder (the Shareholder") of Vega-Atlantic
Corporation, a Colorado corporation (the "Company"), acknowledges receipt of the
Notice of Meeting of Shareholders and Proxy Statement and associated documents,
dated June 18, 2003, and hereby appoints Grant Atkins with the power of
substitution, as Attorney and Proxy to represent and vote all shares of Common
Stock of the Company which the undersigned would be entitled to vote at the
Meeting of Shareholders, and at any adjournment or adjournments thereof, hereby
revoking any Proxy or Proxies heretofore given and ratifying and confirming all
that said Attorney and Proxy may do or cause to be done by virtue thereof with
respect to the following matters:

     1.   Proposal to approve an Amendment to the Company's Articles which would
          effect a proposed Name Change of the Company to such name as the Board
          of Directors deems necessary or appropriate in its sole and absolute
          discretion.


             FOR  /___/              AGAINST  /___/           ABSTAIN  /___/

     2.   Proposal to approve the Stock Option Plan for key personnel of the
          Company.


                FOR  /___/              AGAINST  /___/          ABSTAIN  /___/

     3.   Proposal to ratify the prior actions by Shareholders of the Company
          taken pursuant to Written Consent approving the Reverse Stock Split.


             FOR  /___/              AGAINST  /___/          ABSTAIN  /___/

     4.   To act upon such other matters as may properly come before the Meeting
          or any adjournments thereof.

     This Proxy, when properly executed, will be voted as directed. If no
direction is indicated, the Proxy will be voted FOR each of the above proposals.



Dated:________________________, 2003             ________________________


     Please sign your name exactly as it appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as it appears hereon. When signing as joint tenants, all parties in the
joint tenancy must sign. When a Proxy is given by a corporation, it should be
signed by an authorized officer and the corporate seal affixed. No postage is
required if returned in the enclosed envelope and mailed in the United States.

   PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.