[exim] Exim4 SMTP Error

I have set up an exim mail server for my organization but we are having
issues sending any email from it. When I use the Seamonkey email client I
am able to connect with encrypted password but sending email fail and in
the exim/mainlog the following error is reported.
" SMTP protocol synchronization error (input sent without waiting for
greeting): rejected connection from H=[xxx.xxx.xxx.xxx]
input="\026\003\001\002"". I would really appreciate if some one can
assist with this issue. To clarify I am able send from directly from the
server when I use the "exim -v" command. We have a php script that is ran
from a database and its suppose to connect to the mail server, read all the
mails and send those mail back to an email group, but it fails with a
similar error. I have test the mail server with " swaks -a -tls -q AUTH -s
localhost -au username" and it fails with the following error " 535
Incorrect authentication data" and "No authentication type succeeded". I
have also tried to connect using swaks on 465 but server timedout "===
Trying localhost:465...
=== Connected to localhost.
<** Timeout (30 secs) waiting for server response
-> QUIT
<**
*** Remote host closed connection unexpectedly.
Any info required I will be able to provide as needed.

Thanks