EXHIBIT 10.1

TRANSITION SERVICES AGREEMENT

THISTRANSITION SERVICES AGREEMENT(the "Agreement") by and between Optio Software, Inc. ("Company"),
and C. Wayne Cape ("You" or "Your")(collectively referred to as the "Parties"), is entered into and effective as of the 1st of August, 2001 (the "Effective Date").1

WHEREAS,
prior to the Effective Date You served as the Chief Executive Officer and Chairman of the Board of Directors of the Company;

WHEREAS,
you have resigned as Chief Executive Officer and the Company desires to continue to employ You as an employee to provide consulting and transition services to the Company,
and You desire to accept said continued employment; and

WHEREAS,
the Company and You have agreed upon the terms and conditions of Your continued employment with the Company and the Parties desire to express the terms and conditions in this
Agreement.

NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, it is agreed:

1.Employment and Duties.

A.  Company
shall continue to employ You as an employee of the Company to provide consulting and transition services at the request and direction of the Board of
Directors of the Company (the "Board"), in accordance with the terms and conditions set forth in this Agreement. You accept employment on the terms set forth herein. You shall report to the Board.

B.  You
shall perform such services as set forth onExhibit B("Services") and as may otherwise be agreed to by
You and the Board from time to time.

2.Compensation.

A.Base Salary. During the term of this Agreement, Company shall pay to You a base salary of $25,000.00 per month
("Base Salary"), subject to all applicable withholdings. Your Base Salary shall be paid to You in accordance with the Company's normal payroll practices.

B.Executive Benefits. You shall be entitled to participate in all benefit plans as shall be in effect for all
executive level personnel or applicable generally to employees of the Company from time to time, subject to the terms and conditions of such plans and programs.

C.Modification of Stock Options. You and the Company acknowledge that you hold the following stock options (adjusted
for splits prior to the date hereof) (i) an option to purchase 500,000 shares at an exercise price of $0.02 per share granted in 1989 (the "1989 Option"); (ii) an option to purchase
500,000 shares at an exercise price of $0.05 granted in 1993 (the "1993 Option"); (iii) an option to purchase 1,000,000 shares at an exercise price of $0.80 per share which is fully vested (the
"Vested 1998 Option"); and (iv) an option to purchase 1,000,000 shares at an exercise price of $0.80 per share which is vested as to 750,000 shares (the "Partially Vested 1998 Option"). The
Company by this Agreement hereby amends the Vested 1998 Option and the Partially Vested 1998 Option to extend the date for termination of such options, as set forth in Section 3 thereof, to the
date two (2) years from the last day of the Term of this Agreement.

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3.Term and Termination. The term of this Agreement shall be for the period beginning on the
Effective Date and ending on July 31, 2003 (the "Term"). Upon expiration of the Term, this Agreement and Your
employment with the Company will terminate. This Agreement and Your employment may be terminated prior to expiration of the Term upon the occurrence of any of the following events:

A.  Your
death;

B.  Mutual
written agreement between You and the Company at any time;

C.  Your
written notice to the Board, of your termination of this Agreement; or

D.  Your
receipt of notice from the Board of Directors of Your terminationFor Cause, based upon: (i) Your breach
of Your obligations under Sections 6, 7 or 8 of this Agreement or (ii) any act or omission by You which constitutes fraud, dishonesty, malfeasance, negligence or misconduct and
is, or is likely to be, injurious to the Company or the business reputation of the Company.

4. Post Termination Payment Obligations.

A.  If
this Agreement terminates for any of the reasons stated in sub-sections B, C, or D of Section 3 of this Agreement andSection 4C below does not apply, then You shall be entitled to
receive Your Base Salary through the termination date and thereafter the
Company shall have no further obligations under this Agreement, but You shall continue to be bound by all post-termination obligations to which You are subject, including, but not limited
to, the obligations contained in this Agreement.

B.  If
this Agreement terminates for the reason stated in sub-section A of Section 3, then (i) the Company shall continue to pay to
your heirs an amount equal to Your Base Salary in effect as of the date of termination through the end of the Term (the "Separation Payment"), payable as and when payments would have been made to you
under Section 2A above, (ii) the Company shall reimburse Your eligible dependents' COBRA premiums under the Company's major medical group health plan on a monthly basis through the
earlier of (x) the expiration of eighteen (18) months following Your death or (y) the end of the Term (the "COBRA Period") and (iii) if the COBRA Period ends before the end
of the Term, then the Company shall procure individual medical and dental insurance policies for Your dependents on substantially similar terms as the coverage provided by the Company as of the date
of your death under the Company's group health and dental insurance plan(s) for the balance of the Term following the expiration of the COBRA Period. The payments set forth in the preceding
sub-clauses (i) and (ii) shall constitute full satisfaction of the Company's obligations under this Agreement.

C.  Upon
a Change in Control prior to expiration of the Term, at its option and in its sole discretion, the Company may pay You a lump sum payment equal to the amount
of Base Salary You would have received through the end of the Term, which shall fully satisfy the Company's obligations pursuant to
Section 2A above. Such lump sum payment shall not discharge any of the Company's other obligations to You hereunder unless, after a Change in Control, You elect to terminate this Agreement
prior to the end of the Term, upon which the Company shall reimburse You and Your eligible dependents' COBRA premiums under the Company's major medical group health plan on a monthly basis through the
earlier of (x) the expiration of eighteen (18) months following termination of this Agreement or (y) the end of the Term (the "COBRA Period") and if the COBRA Period ends before
the end of the Term, then the Company shall procure individual medical and dental insurance policies for You and Your dependents on substantially similar terms as the coverage provided by the Company
as of the date of termination of this Agreement under the Company's group health and dental insurance plan(s) for the balance of the Term following the expiration of the COBRA Period. Should the
Company elect not to make a lump sum payment on a Change of Control, You shall continue to receive the Base Salary and benefits described herein through the end of the Term.

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D.  If this Agreement terminates prior to expiration of the Term for any reason other than as described in Section 4A above, then Your right to any separation
payments or other compensation or remuneration hereunder is not conditioned upon any obligation to mitigate any loss of income.

5.Set-Off. If You have any outstanding obligations to the Company at the time this Agreement terminates for any reason,
You acknowledge that the Company is authorized to deduct any amounts owed to the Company from Your final paycheck and/or from any amounts that would otherwise be due to You under Section 4B
above.

6.Restrictive Covenants. You acknowledge that the restrictions contained in this Section 6 are reasonable and necessary to
protect the legitimate business interests of the Company, and will not impair or infringe upon Your right to work or earn a living after Your employment with the Company ends.

A.Trade Secrets and Confidential Information. You represent and warrant that: (i) You are not subject to any
agreement that would prevent You from performing Your duties for the Company or otherwise complying with this Agreement, and (ii) You are not subject to or in breach of any
non-disclosure agreement, including any agreement concerning trade secrets or confidential information owned by any other party.

You
agree that You will not: (i) use, disclose, or reverse engineer the Trade Secrets or the Confidential Information, except as authorized by the Company;
(ii) during Your employment with the Company, use, disclose, or reverse engineer (a) any confidential information or trade secrets of any former employer or third party, or
(b) any works of authorship developed in whole or in part by You during any former employment or for any other party, unless authorized in writing by the former employer or third party; or
(iii) upon Your resignation or termination (a) retain Trade Secrets or Confidential Information, including any copies existing in any form (including electronic form), which are in Your
possession or control, or (b) destroy, delete, or alter the Trade Secrets or Confidential Information without the Company's consent.

The
obligations under this Section 6A shall: (i) with regard to the Trade Secrets, remain in effect as long as the information constitutes a trade
secret under applicable law, and (ii) with regard to the Confidential Information, remain in effect during the Restricted Period.

The
confidentiality, property, and proprietary rights protections available in this Agreement are in addition to, and not exclusive of, any and all other rights to
which the Company is entitled under federal and state law, including, but not limited to, rights provided under copyright laws, trade secret and confidential information laws, and laws concerning
fiduciary duties.

B.Non-Solicitation of Customers. During the Restricted Period, You will not solicit any Customer of the
Company for the purpose of providing any goods or services competitive with the Business. The restrictions set forth in this Section 6B apply only to the Customers with whom You had Contact.

C.Non-Recruit of Employees. During the Restricted Period, You will not, directly or indirectly, solicit,
recruit or induce any Employee to (a) terminate his or her employment relationship with the Company or (b) work for any other person or entity engaged in the Business.

D.Non-Competition. During the Restricted Period, You will not, on Your own behalf or on behalf of any
person or entity engaged in the Business, engage in or perform within the Territory any of the activities which you performed, or which are substantially similar to those which you performed, as Chief
Executive Officer, President and Chairman of the Board of the Company. Nothing in this Agreement shall be construed to prohibit You from performing activities which You did not perform for the
Company.

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7.Work Product. Your employment duties may include inventing in areas directly or indirectly related to the business of the Company or
to a line of business that the Company may reasonably be interested in pursuing. All Work Product shall constitute work made for hire. If (i) any of the Work Product may not be considered work
made for hire, or (ii) ownership of all right, title, and interest to the legal rights in and to the Work Product will not vest exclusively in the Company, then, without further consideration,
You assign all presently-existing Work Product to the Company, and agree to assign, and automatically assign, all future Work Product to the Company.

The
Company will have the right to obtain and hold in its own name copyrights, patents, design registrations, proprietary database rights, trademarks, rights of publicity, and any
other protection available in the Work Product. At the Company's request, You agree to perform, during or after Your employment with the Company, any acts to transfer, perfect and defend the Company's
ownership of the Work Product, including, but not limited to: (i) executing all documents (including a formal assignment to the Company) necessary for filing an application or registration for
protection of the Work Product (an "Application"), (ii) explaining the nature of the Work Product to persons designated by the Company, (iii) reviewing Applications and other related
papers, or (iv) providing any other assistance reasonably required for the orderly prosecution of Applications.

You
agree to provide the Company with a written description of any Work Product in which You are involved (solely or jointly with others) and the circumstances surrounding the
creation of such Work Product.

8.License. You grant to the Company an irrevocable, nonexclusive, worldwide, royalty-free license to: (i) make,
use, sell, copy, perform, display, distribute, or otherwise utilize copies of the Licensed Materials, (ii) prepare, use and distribute derivative works based upon the Licensed Materials, and
(iii) authorize others to do the same. You shall notify the Company in writing of any Licensed Materials You deliver to the Company.

9.Injunctive Relief. You agree that if You breach Sections 6, 7, and/or 8 of this Agreement: (i) the Company would
suffer irreparable harm; (ii) it would be difficult to determine damages, and money damages alone would be an inadequate remedy for the injuries suffered by the Company, and (iii) if the
Company seeks injunctive relief to enforce this Agreement, You will waive and will not (a) assert any defense that the Company has an adequate remedy at law with respect to the breach,
(b) require that the Company submit proof of the economic value of any Trade Secret or Confidential Information, or (c) require the Company to post a bond or any other security. Nothing
contained in this Agreement shall limit the Company's right to any other remedies at law or in equity.

10.Books and Records. You agree that all files, documents, records, customer lists, books and other materials which come into Your use
or possession during the term of this Agreement and which are in any way related to the Company's business shall at all times remain the property of the Company, and that upon request by Company or
upon the termination of this Agreement for any reason, You shall immediately surrender to Company all such property and copies thereof.

11. Severability. The provisions of this Agreement are severable. If any provision is determined to be invalid, illegal, or
unenforceable, in whole or in part, the remaining provisions and any partially enforceable provisions shall remain in full force and effect.

12.Attorneys' Fees. In the event of litigation relating to this Agreement, the Company shall, if it is the prevailing party, be
entitled to recover attorneys' fees and costs of litigation in addition to all other remedies available at law or in equity.

13. Waiver. The Company's failure to enforce any provision of this Agreement shall not act as a waiver of that or any other provision.
The Company's waiver of any breach of this Agreement shall not act as a waiver of any other breach.

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14.Entire Agreement. This Agreement, including Exhibits A and B which are incorporated by reference, constitutes the
entire agreement between the Parties concerning the subject matter of this Agreement. This Agreement supersedes any prior communications, agreements or understandings, whether oral or written, between
the Parties relating to the subject matter of this Agreement. Other than terms of this Agreement, no other representation, promise or agreement has been made with You to cause You to sign this
Agreement.

15.Amendments. This Agreement may not be amended or modified except in writing signed by both Parties.

16.Successors and Assigns. This Agreement shall be assignable to, and shall inure to the benefit of, the Company's successors and
assigns, including, without limitation, successors through merger, name change, consolidation, or sale of a majority of the Company's stock or assets, and shall be binding upon You. You shall not have
the right to assign Your rights or obligations under this Agreement.

17.Governing Law. The laws of the State of Georgia shall govern this Agreement. If Georgia's conflict of law rules would apply another
state's laws, the Parties agree that Georgia law shall still govern.

18.No Strict Construction. If there is a dispute about the language of this Agreement, the fact that one Party drafted the Agreement
shall not be used in its interpretation.

19. Notice. Whenever any notice is required, it shall be given in writing addressed as follows:

To Company:

Optio Software, Inc.
3015 Windward Plaza
Windward Fairways II
Alpharetta, Georgia 30005
Attn: Chief Executive OfficerTo Executive:

C. Wayne Cape
1280 Northcliff Trace
Roswell, Georgia 30076


Notice shall be deemed given and effective three (3) days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either Party may change the address for notice by notifying the other party of such change in accordance with this Section.

20.Consent to Jurisdiction and Venue. You agree that any claim arising out of or relating to this Agreement shall be
(i) brought in the Superior Court of Fulton County, Georgia, or (ii) brought in or removed to the United States District Court for the Northern District of Georgia, Atlanta Division. You
consent to the personal jurisdiction of the courts identified above. You waive (i) any objection to jurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or improper
venue, in any action brought in such courts.

21.AFFIRMATION. YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ THIS AGREEMENT, YOU KNOW AND UNDERSTAND ITS TERMS AND CONDITIONS, AND YOU
HAVE HAD THE OPPORTUNITY TO ASK THE COMPANY ANY QUESTIONS YOU MAY HAVE HAD PRIOR TO SIGNING THIS AGREEMENT.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

| |  | OPTIO SOFTWARE, INC.:                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------------
| |  | By:                                                                                                             
| |  | C. Wayne Cape:                                                                                                  
| |  | /s/C. WAYNE CAPE                                                                                                
| |  | Confirmation of Approval by Compensation Committee:                                                             
| |  | /s/MITCHEL LASKEYMitchel Laskey, Chairman of the Compensation Committee of the Board of Directors of the Company

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EXHIBIT A    DEFINITIONS

A1

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A2

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EXHIBIT B

Description of Consulting and Transition Services:



B1

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