Document:

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                                                                    EXHIBIT 10.1

                                 July 26, 2000

Ms. Elizabeth L. Nichols
416 Jackson Blvd.
Nashville, TN  37205

Dear Mrs. Nichols:

     This letter agreement memorializes the agreement that you have reached with
JDN Realty Corporation (hereinafter referred to as "JDN Realty" or the
"Company") (the "Agreement") regarding the termination of your relationship and
resignation from all employment, offices and directorships held with JDN Realty.
The purpose of the Agreement is to establish mutually agreeable arrangements for
the termination of the Employment Agreement between you and JDN Realty dated as
of December 1, 1996 (the "Employment Agreement") and for otherwise terminating
your relationship with JDN Realty.

     With those understandings and in exchange for the promises set forth below,
you and JDN Realty agree as follows:

     1.  Separation.  You hereby confirm your resignation from the office of
         ----------
President of JDN Realty effective September 1, 2000 (the "Separation Date"), and
your resignation from your position as a director of JDN Realty effective
August 20, 2000.  Said resignations have been accepted by JDN Realty. (Your
separation as an employee and your resignation from your offices and
directorships shall be referred to hereinafter as the "Separation").  You shall
remain on the payroll of JDN Realty and receive your regular base salary until
the Separation Date.

     2.  Obligations and Rights of JDN Realty.  JDN Realty hereby agrees to the
         ------------------------------------
following terms:

          (a) Payment.  In consideration for your resignation from JDN Realty
              -------
and the relinquishment of your rights under the Employment Agreement, the
Company agrees to pay to you the sum of $1,960,000, with $980,000 of that amount
being paid on September 1, 2000, and the other $980,000 to be paid on December
1, 2000.  You understand and agree that JDN Realty is not making this conveyance
as compensation to you for any past or future services provided to JDN Realty,
and you assume all obligation to pay, and are solely liable for, all applicable
taxes, including, without limitation, all federal and state income tax.
<PAGE>

          (b) Accrued Vacation.  The Company agrees to pay you the value of your
              ----------------
current accrued vacation time, which in the aggregate equals $42,403.80, less
applicable withholding.  Such payment shall be made on or before September 1,
2000.

          (c) Use of Office Space.  JDN Realty agrees that you may have access
              -------------------
to and use the JDN Realty office located on Cleghorn Road in Nashville,
Tennessee through December 31, 2000, or until the closing date of a sale of that
office, or until that office is sub-leased to a party which is not a subsidiary
or affiliate of JDN Realty, whichever occurs first.

          (d) Option to Purchase Company Vehicle.  You shall have the option to
              ----------------------------------
purchase the vehicle used by you as a company vehicle prior to your resignation
for the value at which the vehicle is carried on the Company's books as of the
date of purchase.  You must notify JDN Realty of your election to purchase the
vehicle no later than September 1, 2000.

          (e) Health Insurance and COBRA Coverage.  As of the Separation Date,
              -----------------------------------
you will no longer be entitled to participate in or receive benefits available
to employees of JDN Realty; provided, however, that nothing herein shall be
construed to affect your or your dependents' rights thereafter to receive
continuous coverage to the extent authorized by and consistent with the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") or any other benefits
the continuation of which is required by law, entirely at your own cost after
your right to benefit continuation ends under this paragraph.

          (f) Exclusivity.  This Agreement sets forth all of the consideration
              -----------
to which you are entitled by reason of your past employment and relationship
with JDN Realty and the Separation, and you shall not be entitled to or eligible
for any payments or benefits under any other severance, equity, bonus, retention
or incentive policy, arrangement or plan of JDN Realty, except as specifically
set forth herein.

     3.  Employee Obligations.  You hereby agree to the following terms:
         --------------------

          (a)  Cooperation in Legal Matters.
               ----------------------------

               (i)  Subject to and in accordance with the terms of this
                    subparagraph 3(a), you agree to continue to cooperate fully
                    with JDN Realty and any of its subsidiaries and affiliated
                    entities (collectively, the "Companies") (as applicable), in
                    (1) the defense or prosecution of any claims or actions
                    which have been brought or which are hereafter brought
                    against or on behalf of any or all of the Companies (as
                    applicable); and (2) responding to

                                       2
<PAGE>

                    any governmental audit, inspection, inquiry, proceeding or
                    investigation, any of which relate to events that transpired
                    during your employment with JDN Realty. "Full cooperation"
                    shall include, without limitation: (1) promptly notifying
                    JDN Realty in writing of any subpoena, interview,
                    investigation, or inquiry concerning events that transpired
                    during your employment with JDN Realty; (2) meeting with
                    counsel for, or other designated representatives of, one or
                    more of the Companies (as applicable) upon reasonable notice
                    and with the opportunity to be accompanied by counsel, to
                    prepare for discovery or trial and to discuss relevant
                    issues and provide relevant information to the fullest
                    extent possible without waiving the attorney client
                    privilege, but only to the extent you do not have an
                    interest in the lawsuit, proceeding or action at issue which
                    is adverse to the interests of the one or more Companies
                    involved in such lawsuit, action or proceeding; and (3)
                    testifying truthfully as a witness at reasonable times upon
                    the request of one or more of the Companies (as applicable)
                    without being in any way required to waive your privilege
                    against self incrimination.

               (ii) Nothing contained in this Paragraph 3(a) shall be construed
                    to require you to divulge information which is covered by
                    the attorney client privilege absent a written joint defense
                    agreement agreed to and signed by the one or more Companies
                    requesting the information.

          (b) Stock Options.  The parties acknowledge and agree that you have
              -------------
heretofore been granted options to purchase 75,000 shares of Common  Stock at an
exercise price of $13.50 per share, 165,208.50 shares of Common Stock at an
exercise price of $14.67 per share, and 225,000 shares of Common Stock at an
exercise price of $20.75 per share (the "Options").  You hereby agree to forfeit
the 225,000 Options having an exercise price of $20.75 per share (the "Forfeited
Options").  You will be entitled to retain the 75,000 Options having an exercise
price of $13.50 per share and the 165,208.5 Options having an exercise price of
$14.67 per share (the "Retained Options"), and JDN Realty agrees to extend the
date through which you may exercise the Retained Options to June 30, 2001,
notwithstanding the terms of any other agreement entered into prior hereto
regarding the Retained Options.  The Retained Options in all other respects
shall be governed by those certain agreements between you and the

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<PAGE>

Company dated as of March 21, 1994, December 5, 1995, and July 23, 1997
pertaining to the Retained Options.

          (c) Deferred Bonus Plan; Long-Term Incentive Plan.  The parties agree
              ---------------------------------------------
to the following with respect to: (i) the 8,746.50 shares awarded to you
pursuant to JDN Realty's 1998 Deferred Bonus Plan which have not yet vested (the
"Unvested Bonus Plan Shares"); and (ii) the 128,572 unvested shares of JDN
Realty's Common Stock awarded to you pursuant to JDN Realty's 1999 Long-Term
Incentive Plan (the "LTIP Shares"). The Company agrees to treat the LTIP Shares
and the Unvested Bonus Plan Shares as being fully vested as of the Separation
Date.  You shall remain liable for any tax obligation associated under the
vesting and/or issuance of such shares.

          (d) Stand-Still.  In connection with your resignation as a director of
              -----------
the Company, and subject to the exceptions noted herein, for a period of one
year following the Separation Date, you agree not to, directly or indirectly,
(a) call or seek to call a Special Meeting of the shareholders; (b) execute a
written consent to take action without the necessity of a shareholder meeting;
(c) undertake those matters set forth in Item 4(b)-(e) of Schedule 13D (Rule
13d-1) of Section 13 of the Exchange Act of 1934; (d) participate as part of a
"group" for purposes of Section 13 of the Exchange Act or Rule 13(d) and (e)
thereunder; (e) participate in the solicitation of proxies or a tender-offer
pursuant to Regulation 14A and 14D, respectively; (f) seek or propose to acquire
control of the Company's Board of Directors; (g) take any action that could
reasonably be expected to force the Company to make a public announcement
regarding any of the types of matters referred to above; (h) enter into any
discussions, negotiations, agreements, arrangements or understandings with any
third party with respect to any of the foregoing; or (i) seek or encourage
others (through providing financing or otherwise) to take any of the actions set
forth in (a) through (h) above, provided, however, that the provisions of this
subparagraph 3(d) shall not restrict the manner in which you may vote your
shares of stock in the Company, and further provided that nothing contained in
this Agreement shall be deemed to prevent you from participating in any bid for
the Company or its material assets in the event the Board of Directors of the
Company receives a bid from a third party, so long as the restrictions of this
subparagraph 3(d) have otherwise been complied with.

     4.  Consulting Services for Development Company.  You hereby agree to
         -------------------------------------------
provide non-exclusive consulting services to JDN Realty on an as needed basis
through December 31, 2000 (the "Consulting Period") on the following terms.

          (a)  In your capacity as a consultant to JDN Realty, you agree upon
reasonable request by JDN Realty during the Consulting Period to assist the
Company with respect to transitional matters that may arise following the

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<PAGE>

Separation Date, and to respond to requests for assistance or information
concerning the leasing, sale or management of properties, relationships with
tenants of JDN Realty, or other business matters (but not with respect to legal
matters except pursuant to section 3(a)) with which you became familiar while
employed and serving as an officer of the Company.

          (b)  It is intended and agreed by and between the parties that in
providing consulting services during the Consulting Period, you are, and shall
at all times serve as an independent contractor, and you understand and agree
that during the Consulting Period, you are not an employee of any of the
Companies and shall not be treated as an employee for any purpose.  You
understand and agree that as an independent contractor, you are required to pay
and are solely liable for, all applicable taxes, including, without limitation,
federal income tax, self-employment tax and state income tax on remuneration you
receive in exchange for the Consulting Services and you may be required to pay
quarterly estimated income taxes.

          (c)  In exchange for your consulting services, you shall receive $1000
per each day during which such services are requested and provided.

     5.  Employment Agreement.
         --------------------

          This Agreement supersedes all provisions of the Employment Agreement
other than Section 11 (dealing with Indemnification), which is incorporated
herein by reference and which shall continue to bind the parties in accordance
with its terms.

     6.  Non-Solicitation.  In partial exchange for the consideration recited
         ----------------
herein, you hereby covenant and agree as follows:

          (a)  Non-Solicitation.
               -----------------

               (i)  For a period of two years after the Separation Date, you
                    will not, except with the prior written consent of the
                    Company, contact or solicit, or do business with or for,
                    directly or indirectly, any customer, client, or tenant of
                    JDN Realty or any of the Companies, whose identity you
                    obtained, or with whom you developed a business relationship
                    through your association with the Companies. The Company
                    agrees to provide it's consent in circumstances in which
                    it's representatives, in good faith, believe that to do so
                    would not harm or conflict with the Company's business
                    plans, operations or other interests.

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<PAGE>

               (ii) For a period of two years after the Separation Date, you
                    will not directly or indirectly, entice or induce, or
                    attempt to entice or induce, any employee of the Companies
                    to leave such employ, or employ any such person in any
                    business similar to or in competition with that of the
                    Companies. You may, however, employ former employees of the
                    Companies, provided that the departure of such former
                    employee or employees from JDN Realty or the other
                    Companies, as applicable, in no way resulted from your
                    direct or indirect actions, solicitation, efforts, or
                    communications.

     7.  Confidentiality.
         ----------------

         Except pursuant to a subpoena, or in testimony in any case, proceeding,
investigation or inquiry, or in any audit, inspection or interview with any
state or federal governmental agency, you will not disclose to any person or
entity or use, at any time, any information not in the public domain or
generally known in the industry, in any form, acquired by you while employed by
the Company or any predecessor to the Company's business, and relating to any of
the Companies, including but not limited to information regarding customers,
vendors, suppliers, trade secrets, training programs, manuals or materials,
technical information, contracts, systems, procedures, mailing lists, know-how,
trade names, improvements, price lists, financial or other data (including the
revenues, costs or profits associated with any of the Companies' services),
business plans, code books, invoices and other financial statements, computer
programs, software systems, databases, discs and printouts, plans (business,
technical or otherwise), customer and industry lists, correspondence, internal
reports, personnel files, sales and advertising material, telephone numbers,
names, addresses or any other compilation of information, written or unwritten,
which is or was used in the business of the Companies. You agree and acknowledge
that all of such information, in any form, and copies and extracts thereof, are
and shall remain the sole and exclusive property of the Companies, and that you
have or will promptly upon the execution of this Agreement return to the
Companies the originals and all copies of any such information provided to or
acquired by you in connection with the performance of your duties for the
Companies, and shall return to the Companies all files, correspondence and/or
other communications received, maintained and/or originated by you during the
course of your employment.

     8.  No Derogatory Statements.
         ------------------------

         (a) The parties mutually agree that, as part of the consideration for
this Agreement, they will not, directly or indirectly, in any capacity or

                                       6
<PAGE>

manner, take any action or cause any action to be taken which would be
detrimental to the interests of the other party or parties, or in the case of
the Companies, their respective officers, directors, agents and employees,
including, without limitation, making, causing, encouraging or assisting to be
made any statements, comments or remarks, whether verbal, in writing or
electronically transmitted, which might reasonably be considered to be
derogatory or defamatory, or to malign, harm, defame, disparage or damage the
reputation and good name of, the other party or parties, or in the case of the
Companies, their respective officers, directors, agents and employees.

         The provisions of this Subsection shall not apply to any truthful
statement required to be made by the parties in any legal proceeding, required
filings under the securities laws, or pursuant to any governmental or regulatory
investigation.

         (b) A breach by either you or the Companies of any obligations under
this Section shall not be deemed a material breach of this Agreement and shall
not excuse you or the Companies from performing each of your respective
obligations under this Agreement.  The sole remedies for a violation of this
Section shall be an action for damages caused by any such violation and/or to
enjoin any further breach of the obligations of this Section.

     9.  Indemnification.  JDN Realty agrees to indemnify and advance to you
         ---------------
reasonable expenses incurred in connection with any litigation or other legal or
regulatory proceeding of any kind filed or initiated against the Companies or
you by reason of your status as an officer or employee of JDN Realty, in
accordance with the terms of the Articles of Incorporation and Bylaws of the
Companies, Section 11 of the Employment Agreement (dealing with Indemnification)
and your Indemnification Agreement with JDN Realty, or as might otherwise exist
under applicable law (collectively, the "Governing Documents and Law").  All
future advances and any indemnification sought by you shall be controlled by the
Governing Documents and Law.  JDN Realty also agrees to exercise reasonable
efforts to cooperate with you in any reasonable attempts by you to seek an
advancement of fees to which you may be entitled under applicable insurance
policies.

     10.  Cooperation With Regard to Real Estate Licenses.  The parties mutually
          -----------------------------------------------
agree to exercise good faith efforts to assist one another in connection with
any necessary or appropriate transfer of brokerage licenses held by you in
connection with JDN Realty's business or operations.

     11.  No Other Representations.  You represent and acknowledge that in
          ------------------------
executing this Agreement, you do not rely and have not relied upon any
representations or statements made by the Company or by any of the Company's

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<PAGE>

agents, representatives or attorneys with regard to the subject matter, basis or
effect of this Agreement or otherwise, except as set out herein.

     12.  Voluntary Agreement.  The parties represent and agree that they have
          -------------------
consulted with attorneys of their choosing, have had a full and fair opportunity
to consult with such attorneys, and that they have carefully read and considered
all aspects of this Agreement, and enter into it voluntarily and in exchange for
the consideration recited herein.

     13.  Successors.  This Agreement shall be binding upon you and the
          ----------
Companies and upon their respective heirs, administrators, representatives,
executors, successors and assigns, and shall inure to the benefit of you, the
Company, and your and their respective heirs, administrators, representatives,
executors, successors and assigns. This Agreement is personal to you, and you
may not assign or transfer any interests in, or rights or benefits under, this
Agreement.

     14.  Notices.  Any notice required or permitted to be given under this
          -------
Agreement shall be sufficient if in writing and if delivered by hand or by
certified or registered mail or by a nationally recognized overnight delivery
service, postage or other charges pre-paid, and addressed to: you, at the
address set forth above (if such notice is addressed to you), with a copy to
Robert J. Walker, Walker, Bryant & Tipps, 2100 First Union Tower, 150 Fourth
Avenue North, Nashville, Tennessee 37219; or to JDN Realty Corporation, 359 East
Paces Ferry Road, N.E., Fourth Floor, Atlanta, Georgia  30305, Attention:
President, with a copy to John L. Latham at Alston & Bird LLP, One Atlantic
Center, 1201 W. Peachtree Street, Atlanta, Georgia  30309-3424, or such other
address as may be designated by a party hereto in written notice to the other
party hereto.  Such notice shall be deemed to have been given or made on the
date of delivery, if delivered by hand, or on the next following date if sent by
mail or overnight delivery service.

     15.  Choice of Law; Attorneys' Fees.  This Agreement is made and entered
          ------------------------------
into in the State of Georgia and shall, in all respects, be interpreted,
enforced and governed under the laws of said State, without regard for the
principles of conflicts of laws thereof, except for the non-solicitation
provisions in paragraph 6 hereof, which shall be governed solely by the laws of
the State of Tennessee.  Any action or proceedings brought by a party seeking to
enforce any provisions of, or based upon any right arising out of, this
Agreement may be brought against any of the parties hereto in the courts of the
State of Georgia for Fulton County or, if it has or can acquire jurisdiction, in
a United States District Court for the State of Georgia sitting in Fulton
County, and each of the parties consents to the jurisdiction of such courts (and
of the appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid

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<PAGE>

therein. If legal action is commenced by either party to enforce or defend its
rights under this Agreement, the prevailing party in such action shall be
entitled to recover its costs and reasonable attorneys' fees in addition to any
other relief granted.

     16.  Miscellaneous.  The language of all parts of this Agreement shall, in
          -------------
all cases, be construed as a whole, according to its plain meaning, and not
strictly for or against any of the parties, and rules of interpretation or
construction of contracts that would construe any ambiguity against the
draftsman shall not apply.  Should any provision of this Agreement be declared
or be determined by any court to be illegal or invalid, the validity of the
remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be part of
this Agreement. As used in this Agreement, the singular or plural number shall
be deemed to include the other whenever the context so indicates or requires.
This Agreement may be executed in any number of counterparts, each of which
shall for all purposes be deemed to be an original but each of which, when so
executed, shall constitute but one and the same instrument.  In making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart executed by the party against whom enforcement of this
Agreement is sought.  This Agreement sets forth the final and entire agreement
between the parties hereto and fully supersedes any and all prior agreements or
understandings between the parties hereto pertaining to the subject matter
hereof. This Agreement may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.  The section and paragraph
headings contained in this Agreement are for convenience of reference, and shall
not limit or control, or be used to construe, the meaning of any provision
herein.  Any delay or omission by any party hereto in exercising any right
hereunder shall not operate as a waiver of such right.

     If you agree that the terms set forth herein constitute the complete and
final agreement of the parties with regard to your separation from the
Companies, please sign and date below and return this Agreement to JDN Realty
Corporation.

                                                  Sincerely,

                                                  JDN Realty Corporation

                                                  By: /s/ Craig Macnab
                                                      --------------------------
                                                      Craig Macnab

                                                  Title: CEO

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<PAGE>

Accepted and agreed to:

/s/ Elizabeth L. Nichols
---------------------------------
Elizabeth L. Nichols

July 26, 2000
---------------------------------
Date

                                       10<PAGE>

                                                                    EXHIBIT 10.1

                              SETTLEMENT AGREEMENT
                              --------------------

     This Settlement Agreement and Mutual Release (this "Agreement") is made
                                                         ---------
this 7th day of April 2000, by and between PTEK Holdings, Inc. ("PTEK"), a
                                                                 ----
corporation organized under the laws of the State of Georgia, with its
principal place of business at 3399 Peachtree Road NE, Lenox Building, Suite
600, Atlanta, GA 30326, and MCI WORLDCOM, Inc. ("MCI WorldCom"), a corporation
                                                -------------
organized under the laws of the State of Georgia, with its principal place of
business at 500 Clinton Center Drive, Clinton, MS 39056.  The term "PTEK" shall
                                                                    ----
mean PTEK and its subsidiaries, including without limitation, Premiere
Communications, Inc., Xpedite Systems, Inc., Voice-Tel Enterprises Inc., Voice-
Tel Canada Limited, American Teleconferencing Services Ltd., PTEK Ventures.com,
Inc., PTEK Ventures I, LLC, and Intellivoice Communications, Inc., and each of
their respective subsidiaries, affiliates, successors and assigns, in all
instances whether now existing or hereafter acquired or formed (each, a "PTEK
                                                                         ----
Entity").  The term "MCI WorldCom" includes MCI WorldCom, Inc. and each of its
------
subsidiaries, affiliates, successors and assigns, in all instances whether now
existing or hereafter acquired or formed (each, a "MCI WorldCom Entity").  PTEK
                                                   -------------------
and MCI WorldCom will hereafter be referred to jointly as the "Parties."
                                                               -------

     This Agreement is made as a compromise between the Parties for the complete
and final settlement of their claims, differences, and causes of action with
respect to the dispute described below.

                                    PREAMBLE
                                    --------

     WHEREAS, on or about November 13, 1996, PTEK and WorldCom, Inc., entered
into a Strategic Alliance Agreement, an Investment Agreement, an Assignment
Agreement, and an Irrevocable Stock Proxy (collectively, the "Alliance
                                                              --------
Agreements");
----------

     WHEREAS, on or about June 11, 1999, PTEK filed a civil action in the
Superior Court of Fulton County, Georgia, Civil Action File No. 1999CV09956,
against MCI WorldCom alleging a breach of the Alliance Agreements and seeking
equitable relief and damages (the "Action");
                                   ------

     WHEREAS, on or about July 1, 1999, the Court entered an Order staying the
Action pending arbitration between PTEK and MCI WorldCom;

     WHEREAS, on or about January 21, 2000, the Parties entered into a letter
agreement (the "Letter of Intent") resolving the disputes, subject to the
                ----------------
execution of this Agreement, related to the Alliance Agreements and the Action;

     WHEREAS, pursuant to a November 9, 1997 merger agreement between WorldCom,
Inc., MCI Communications Corporation, and TC Investments Corp. ("TC
                                                                 --
Investments"), on or about September 14, 1998, MCI Communications Corporation
merged with and into TC Investments, which changed its name to MCI
Communications Corporation, and WorldCom, Inc. changed its name to MCI WorldCom;

                                       1
<PAGE>

     WHEREAS, PTEK and MCI WorldCom desire to avoid the necessity, expense,
inconvenience and uncertainty of litigation, and resolve and settle all claims
and disputes between them arising out of, or in any way related to, the Alliance
Agreements or the Action;

     NOW, THEREFORE, in consideration of the releases and mutual promises
contained herein and other good and valuable consideration exchanged between
PTEK and MCI WorldCom, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

1.0  SETTLEMENT

     1.1  Cash Consideration.  PTEK acknowledges that it has already received
          ------------------
from MCI WorldCom, as partial consideration of the terms of this Agreement, the
sum of Twelve Million Dollars ($12,000,000) by wire transfer.

     1.2  Surviving Obligations.  The Parties agree that upon the execution of
          ---------------------
this Agreement the Alliance Agreements will terminate immediately, and any and
all rights and obligations of the Parties pursuant to the Alliance Agreements
will be forever extinguished; provided, however, that nothing herein shall
terminate (i)  the Irrevocable Stock Power (attached hereto as Exhibit A) and
                                                               ---------
the Assignment Agreement (attached hereto as Exhibit B) executed in connection
                                             ---------
with the Strategic Alliance Agreement to the extent that such agreements deal
with common stock of EBIS Communications, Inc. or the Conetco Receivable (as
defined in the Strategic Alliance Agreement), or (ii) the service agreements
described in Schedule I hereto (collectively, the items described in Sections
             ----------
1.2(i) and (ii) hereof shall be referred to as the "Surviving Obligations")
                                                    ---------------------
which shall remain in full force and effect.  The Parties further agree that (a)
any breach of this Agreement by MCI WorldCom, with the sole exception of MCI
WorldCom's duty to tender certain stock set forth in Paragraph 1.3, shall not
give rise to any claim or right by PTEK to resurrect, or reinstitute, any of the
Parties' rights or obligations under the Alliance Agreements and (b) any breach
of this Agreement by PTEK, with the sole exceptions of PTEK's duty to dismiss
the Action set forth in Paragraph 1.4 and PTEK's contingent duty to pay MCI
WorldCom as set forth in Paragraph 1.5, shall not give rise to any claim or
right of MCI WorldCom to seek repayment of the Twelve Million Dollars
($12,000,000) paid to PTEK or to seek return of the PTEK common stock to be
transferred to PTEK or its designee(s) pursuant to Paragraph 1.3 hereof.

     1.3  Stock Consideration.  Within one (1) business day after receiving an
          -------------------
executed copy of this Agreement from PTEK, MCI WorldCom will transfer to PTEK or
its designee(s) One Million Eighty Three Thousand Six Hundred (1,083,600) shares
of PTEK common stock currently held by MCI WorldCom, in accordance with the
stock transfer agreement attached hereto as Exhibit C.
                                            ---------

     1.4  Dismissal.  Within one  (1) business day after receiving an executed
          ---------
copy of this Agreement from MCI WorldCom, PTEK shall file a Stipulation of
Dismissal dismissing the Action with prejudice.  The Parties shall bear their
own costs and attorneys' fees arising out of, or in any way related to, the
Action.

                                       2
<PAGE>

     1.5  Retail Calling Card Business. MCI WorldCom shall assist PTEK with the
          ----------------------------
sale of PTEK's retail calling card business. If MCI WorldCom assists PTEK in the
successful consummation of the sale of its retail calling card business, within
one hundred twenty (120) days of the execution date hereof, to a party
identified by MCI WorldCom (excluding Z-Tel Technologies, Inc. or any of its
affiliates or any other prospective purchaser previously identified by PTEK or
any of its representatives), PTEK will pay MCI WorldCom the portion of the
purchase price, if any, in excess of Eighteen Million Dollars ($18,000,000),
when, as, and if received by PTEK, and in the form received by PTEK; provided,
however, that in no event shall such amount payable to MCI WorldCom exceed
Twelve Million Dollars ($12,000,000).

     1.6  Existing and New Services. MCI WorldCom shall cause its subsidiaries
          -------------------------
or affiliates to provide, upon the request of any PTEK Entity, any commercially
available service provided by any MCI WorldCom Entity (the "Services") to each
                                                            --------
PTEK Entity, whether under any existing agreement or arrangement in place
between any MCI WorldCom Entity and any PTEK Entity (an "Existing Agreement") or
                                                         ------------------
any new mutually acceptable amendment, agreement or arrangement between the
Parties (individually, an Existing Agreement or any new mutually acceptable
amendment, agreement or arrangement shall be referred to as a "Service
                                                               -------
Agreement" and collectively, the "Service Agreements").  Each Existing Agreement
                                  ------------------
shall be deemed amended pursuant to the following terms and conditions as of
January 1, 2000.  Any Service Agreement shall reflect the terms contained in
Sections  1.6 and 5.11 herein. [***] A "mutually acceptable" agreement or
arrangement shall be one that reflects the terms of Section 1.6 and 5.11 hereof,
and otherwise contains commercially reasonable terms and conditions generally
available to other users of the applicable Services.

     1.6.1  Rates and Charges.  Commencing as of  January 1, 2000, the
            -----------------
Services shall be provided at the following rates, terms and conditions and, for
those rates for Services set forth in Section 1.6.1(B)(iii) and (iv), any
applicable filed tariffs.  PTEK shall cause each PTEK Entity to pay all charges
for the Services determined in accordance with the terms hereof and the
applicable Service Agreement.  Nothing in this Agreement or any Service
Agreement shall relieve any PTEK Entity of the obligation to pay applicable
taxes or applicable fees, including without limitation the National Access Fee
or the Federal Universal Service Fee. [***].

            A.   Rates and Charges - Generally. Each MCI WorldCom Entity shall
                 -----------------
charge each PTEK Entity for all telecommunications products or services strictly
in accordance with the rates set forth below, which, except as otherwise
adjusted in accordance with the provisions of Section 1.6.1(D) following, shall
remain fixed for the term. [***].

            B.   Existing Services/Rates. Unless otherwise adjusted pursuant to
                 -----------------------
this Section 1.6.1, rates for the following Services described in any Service
Agreement shall consist of the following rates, inclusive of carrier access
charges:

                 (i)    North American/Domestic inbound toll-free services at a
                        rate of [***];
                 (ii)   North American/Domestic outbound services at a rate of
                        [***];

                 (iii)  international termination services at [***];
                 (iv)   international origination ("ITFS") at [***]; and
                 (v)    all other Services, including but not limited to, North
                        American/Domestic and international private line, local
                        loop, local service, local access, broadband, xDSL,
                        ADSL, T-1, fractional T-1, E-1, DS-3, OC-n, non U.S.
                        intra and intercountry transmission, frame relay ports
                        and circuits [***].

                                       3
<PAGE>

            C.   New Services/Rates. Each PTEK Entity shall have the right to
                 ------------------
purchase, [***] any services or products of any MCI WorldCom Entity (the "New
                                                                          ---
Services") (i) [***].
--------
            D.   Adjustment to Rates. Notwithstanding any other provision to the
                 -------------------
contrary in this Agreement or in any Service Agreement, the rates described in
Sections 1.6.1(B) and 1.6.1(C), for Existing and New Services, shall apply
during and throughout the initial term [***].

            E.   Rates/Renewal Term. During any renewal term following the
                 ------------------
initial term, each MCI WorldCom Entity shall provide services to each PTEK
Entity [***].

     1.6.2  Term.  The term of each Existing Agreement or Service Agreement is
            ----
as follows.

            A.   Term.  The term of each Existing Agreement or Service
                 ----
Agreement shall expire on December 31, 2004 (the "initial term").
                                                  ------------

            B.   Renewal.  Upon expiration of the initial term or of any
                 -------
renewal term, the Existing Agreement or Service Agreement shall automatically
renew for an additional one (1) year term unless terminated by either party
pursuant to Section 1.6.2(C) (each, a "renewal term").
                                       ------------

            C.   Termination.  Either party may terminate an Existing
                 -----------
Agreement or Service Agreement by providing the other party with at least six
(6) months advance written notice, which termination may be effective no earlier
than December 31, 2004.  No Service Agreement may otherwise be terminated by any
MCI WorldCom Entity except upon (i) a material breach by PTEK or a PTEK Entity
(which shall include without limitation a failure to pay any amount owed when
due) , and  (ii) failure to cure such breach within five (5) days of written
notice thereof.  The parties agree to attempt to resolve in good faith any
disputes under a Service Agreement in accordance with the dispute resolution
mechanism set forth in the applicable Service Agreement.

     1.6.3  Resale Provision. Any provision in each Service Agreement to the
            ----------------
contrary notwithstanding. Notwithstanding Section 1.6.2(C) hereof, the following
provisions shall apply in the event of a breach by a PTEK Entity of this Section
1.6.3: (a) in the event MCI WorldCom believes that a PTEK Entity is in breach of
this provision, MCI WorldCom shall notify such PTEK Entity in writing. Such PTEK
Entity shall within ten (10) days ("Notice Period") investigate such claim and
provide MCI WorldCom with an

                                       4
<PAGE>

assessment of such claim.  If, at or prior to the conclusion of the Notice
Period, such PTEK Entity determines that it is in breach of this Section, such
PTEK Entity shall have an additional ten (10) day period ("Remedy Period") to
remedy such breach and pay to MCI WorldCom a penalty in an amount equal to
[***].   In the event that such PTEK Entity believes that it is not in breach or
has not remedied such breach at the conclusion of the Remedy Period, such PTEK
Entity and MCI WorldCom shall follow the arbitration procedures set forth at
Section 5.12 of this Agreement.  If such PTEK Entity is deemed by the Arbitrator
to have breached this Section, MCI WorldCom's sole remedy shall be for the
Arbitrator [***].

     1.6.4 [***].

     1.6.5  Further Assurances.  Each party, from time to time, at the
            ------------------
request of the other and without further consideration, shall do, execute and
deliver, or cause to be done, executed and delivered, all such further acts,
things and instruments as may be reasonably requested or required to evidence or
to give full force and effect to the rates, terms and conditions of this
Agreement.

     1.7    Specific Agreement.  Further to Section 1.6 hereof, PTEK and MCI
            ------------------
WorldCom shall enter into the telecommunications and Internet services
agreements substantially in the form of the contracts set forth hereto as
Exhibits D (Classic Agreement), E (Private Line/Data Agreement) and F (UUNET
----------                      -                                   -
Agreement). In the event of any inconsistency, ambiguity, conflict or other
discrepancy between or among any of the rates, terms, and conditions of this
Agreement, the Service Agreement, or any tariff, the following order of
supersedence will control: (i) this Agreement, (ii) the Service Agreement, and
(iii) the tariff; provided, however, that in the event of any inconsistency,
ambiguity, conflict or other discrepancy between (A) any Service Agreement that
is executed by Patrick G. Jones or any successor Chief Financial Officer of PTEK
or Jeffrey A. Allred or any successor President or Chief Operating Officer of
PTEK, and that has an effective date as of or following the effective date
hereof, and (B) this Agreement or any tariff, the following order of
supersedence will control: (i) such Service Agreement, (ii) this Agreement, and
(iii) the tariff.

     1.8    Resolution.  This Agreement shall finally settle and resolve, among
            ----------
other things, all claims asserted or which could have been asserted by PTEK
against MCI WorldCom arising out of or relating to the Alliance Agreements,
excluding the Surviving Obligations, including but not limited to those asserted
in the Action.

2.0  COMPROMISE

     2.1    The Parties agree and acknowledge that this Agreement is the result
of a compromise and shall never be construed as an admission by any PTEK Entity
or any MCI WorldCom Entity of any liability, wrongdoing or responsibility on its
part or on the part of its predecessors, successors, assigns, agents, parents,
subsidiaries, affiliates, officers, directors, or

                                       5
<PAGE>

employees. Indeed, each PTEK Entity and MCI WorldCom Entity expressly denies any
such liability, wrongdoing or responsibility.

3.0 RELEASE

     3.1    PTEK Release.  In consideration hereof, PTEK, its predecessors,
            ------------
successors, parents, assigns, heirs, agents, and attorneys hereby release and
forever discharge MCI WorldCom, its predecessors, successors, parents, direct
subsidiaries, indirect subsidiaries, affiliates, assigns, agents, directors,
officers, employees, and shareholders from and against all actions, causes of
action, claims, suits, debts, damages, judgments, causes of action, liabilities,
and demands whatsoever, whether matured or unmatured, whether at law or in
equity, whether before a local, state or federal court or state or federal
administrative agency or commission, and whether now known or unknown,
liquidated or unliquidated, that PTEK now has or may have had, or thereafter
claims to have, against MCI WorldCom arising out of or relating to the Alliance
Agreements (excluding the  Surviving Obligations) or to the Action.

     3.2    MCI WorldCom Release.  In consideration hereof, MCI WorldCom, its
            --------------------
predecessors, successors, parents, assign, heirs, agents, and attorneys hereby
release and forever discharge PTEK, its predecessors, successors, parents,
direct subsidiaries, indirect subsidiaries, affiliates, assigns, agents,
directors, officers, employees, and shareholders from and against all actions,
causes of action, claims, suits, debts, damages, judgments, causes of action,
liabilities, and demands whatsoever, whether matured or unmatured, whether at
law or in equity, whether before a local, state or federal court or state or
federal administrative agency or commission, and whether now known or unknown,
liquidated or unliquidated, that MCI WorldCom now has or may have had, or
thereafter claims to have, against PTEK arising out of or relating to the
Alliance Agreements (excluding the Surviving Obligations) or to the Action.

4.0  CONFIDENTIALITY AND NOTICES

     4.1    Confidentiality.  The Parties further agree not to disclose the
            ---------------
contents of this Agreement or the fact of this settlement or any matters
pertaining to this settlement unless such disclosure is (i) agreed to in writing
by the Parties; (ii) lawfully required by any governmental agency; (iii)
following consultation with legal counsel, deemed necessary to satisfy such
party's disclosure obligations imposed by law; or (iv) necessary in any legal
proceeding in order to enforce any provisions of this Agreement.  The Parties
agree that they will notify each other in writing within five calendar days of
the receipt of any subpoena, court order, or administrative order requiring
disclosure of information subject to this non-disclosure provision.  To the
extent of any disclosure pursuant to this Section 4.1(iii) hereof, each Party
agrees to seek confidential treatment for the economic terms set forth in this
Agreement.  The press release attached hereto as Exhibit G may be released by
                                                 ---------
PTEK following execution of this Agreement.

     4.2    Notices.  Any notices required under this Agreement shall be
            -------
effective only if in writing and delivered personally or by nationally
recognized next business day courier, or by registered or certified mail,
postage pre-paid, served upon the Parties follows:

                                       6
<PAGE>

Premiere:         PTEK Holdings, Inc.
                  3399 Peachtree Road, N.E.
                  The Lenox Building, Suite 600
                  Atlanta, Georgia 30326
                  Attention:  Patrick G. Jones, Executive Vice President

Copy to Counsel:  Alston & Bird
                  One Atlantic Center
                  1201 West Peachtree Street
                  Atlanta, Georgia 30309-3424
                  Attention:  John L. Latham
                              Janine Brown

                  Gerry, Friend & Sapranov
                  Three Ravinia Drive, Suite 1450
                  Atlanta, Georgia 30346
                  Attention:  Charles Hudak

MCI WorldCom:     MCI WORLDCOM, Inc.
                  515 East Amite Street
                  Jackson, Mississippi 39201-2702
                  Attention:  David F. Myers

Copy to Counsel:  Thomas F. O'Neil III
                  Chief Legal Counsel
                  William P. Donovan, Jr.
                  Associate Litigation Counsel
                  MCI WORLDCOM, Inc.
                  1133 19th Street, NW
                  Washington, DC 20036

Any such notice shall be effective as of the business day following deposit with
a nationally recognized courier or three business days following delivery by
registered or certified mail, postage pre-paid.

5.0  MISCELLANEOUS TERMS AND CONDITIONS

     5.1    Complete Agreement.  This document contains the complete Agreement
            ------------------
between the Parties.

     5.2    Counterparts.  This Agreement may be executed in identical
            ------------
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same Agreement.

     5.3    Amendment.  This Agreement may be modified only by a written
            ---------
document signed by the Parties. No waiver of this Agreement or of any of the
promises, obligations, terms,

                                       7
<PAGE>

or conditions hereof shall be valid unless it is written and signed by the Party
against whom the waiver is to be enforced.

     5.4    Successors; Representations.  This Agreement shall be binding on the
            ---------------------------
Parties, their predecessors, successors, parents, subsidiaries, affiliates,
assigns, agents, directors, officers, employees, and attorneys.  Each of the
signatories to this Agreement represents and warrants that he is authorized to
execute this Agreement and to bind the Party on whose behalf he executes it.
PTEK, as to each PTEK Entity, and MCI WorldCom, as to each MCI WorldCom Entity,
represents and warrants that the execution of this Agreement and the
transactions contemplated hereby have been duly authorized by all requisite
corporate action; and this Agreement and each Service Agreement constitutes a
valid and binding obligations of the parties thereto, enforceable in accordance
with its respective terms.

     5.5    Severability.  If any part or any provision of this Agreement shall
            ------------
be finally determined to be invalid or unenforceable under applicable law by a
court of competent jurisdiction, that part or provision shall be ineffective to
the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of said provision or the remaining provisions of
this Agreement.

     5.6    Assignment.  The Parties hereby warrant and represent that they have
            ----------
not assigned or in any way transferred or conveyed all or any portion of the
claims covered by this Agreement.  The Parties acknowledge and agree that this
warranty and representation is an essential and material term of this Agreement,
without which they would not have entered into it.

     5.7    Consultation. The Parties acknowledge that they have had the
            ------------
opportunity to consult with legal counsel of their choosing prior to entering
into this Agreement and that they enter into this Agreement knowingly and
voluntarily.

     5.8    Construction.  The Parties cooperated in the drafting of this
            ------------
Agreement.  Therefore, in the construction of this Agreement, the provisions
hereof shall not be construed against any Party.  For purposes of PTEK or a PTEK
Entity, the term "subsidiaries" means all those corporations, associations,
limited liability companies, partnerships, business trusts or other business
entities of which the entity in question at the time in question either owns or
controls 10% or more of the outstanding equity securities or other beneficial
ownership interests either directly or through an unbroken chain of entities as
to each of which 10% or more of the outstanding equity securities or other
beneficial ownership interests is owned directly or indirectly by its parent.
For purposes of MCI WorldCom or an MCI WorldCom Entity, the term "subsidiaries"
means all those corporations, associations, limited liability companies,
partnerships, business trusts or other business entities of which the entity in
question at the time in question either owns or controls 50% or more of the
outstanding equity securities or other beneficial ownership interests either
directly or through an unbroken chain of entities as to each of which 50% or
more of the outstanding equity securities or other beneficial ownership
interests is owned directly or indirectly by its parent.

     5.9    Time of Essence.  Time is of the essence in this Agreement.
            ---------------

                                       8
<PAGE>

     5.10   Governing Law.  This Agreement is made and entered into in the
            -------------
State of Georgia and will in all material respects be interpreted, enforced, and
governed under the laws of said state.

     5.11   Adverse Regulatory Determination. If any Regulatory Authority
            --------------------------------
determines, at any time, that this Agreement, in whole or in part, is unlawful
or unenforceable, or makes any other determination adversely affecting the
Agreement, any Service Agreement, any PTEK Entity or any successor or assign of
any PTEK Entity, then the Parties shall each exercise their best efforts within
a period of ninety (90) days commencing with the date of said Adverse Regulatory
Determination ("Cure Period") both to (i) comply therewith and (ii) to
                -----------
renegotiate in good faith to arrive at a new agreement reflecting to the fullest
extent permitted by law, the bargain struck between the Parties pursuant to this
Agreement or the applicable Service Agreement.

     5.12   Arbitration. The Parties shall attempt to resolve in good faith any
            -----------
disputes arising from this Agreement, including any Service Agreement.
Specifically, prior to instituting formal legal action, the Parties will refer
any dispute to authorized representatives for consideration and potential
resolution.  Initially, such representatives shall be Dan Mell for PTEK and
David Myers for MCI WorldCom.  In the event that the Parties cannot resolve a
dispute through this executive escalation mechanism, the dispute shall be
submitted to the American Arbitration Association ("AAA") for final and binding
                                                    ---
arbitration before a single arbitrator ("Arbitrator") conducted in accordance
                                         ----------
with the United States Arbitration Act, 9 U.S.C. 1-16 et seq. ("USAA").  The
                                                                ----
arbitration shall be held in Atlanta, Georgia.  The costs of arbitration,
including the fees and expenses of the Arbitrator, shall be shared equally by
the Parties.  Each party shall bear the cost and attorneys' fees of preparing
and presenting its own case.  Notwithstanding anything in this paragraph to the
contrary, including, but limited to, the AAA Rules of Commercial Arbitration
and/or the USAA, the Parties agree that the Arbitrator shall have the sole
authority to determine any and all procedures related to discovery in any
arbitration between the Parties, including, but not limited to, whether any
discovery will be permitted and the type of discovery that will be permitted.
Notwithstanding any choice of law provision in this Agreement, any controversy
whether an issue is arbitrable shall be determined by the Arbitrator and there
shall be no right of appeal from this ruling.  The Arbitrator shall have the
authority to grant injunctive relief, including temporary injunctive or
equitable relief, consistent with the laws controlling such remedies.  Except
for any claim based on actual fraud, the Arbitrator shall have no authority to
award punitive or exemplary damages and the parties expressly waive their right
to such damages.  Any decision of the Arbitrator is final and binding on the
Parties.  The Parties expressly agree they will take no action to vacate the
Arbitrator's decision.  The award may be enforced in any court of competent
jurisdiction.  All post-award proceedings shall be governed by the USAA.

                                       9
<PAGE>

     IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the date
above written.

PTEK HOLDINGS, INC.                          MCI WORLDCOM, INC.

/s/ Patrick G. Jones                         /s/ Thomas F. O'Neil
------------------------------               ----------------------------------
Name: Patrick G. Jones                       Name: Thomas F. O'Neil III
     -------------------------                    -----------------------------
Title: Executive Vice President              Title: Chief Legal Counsel
      ------------------------                     ----------------------------

                                       10

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