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ECHO
Press Releases 2004
FOR IMMEDIATE RELEASE
Electronic
Clearing House, Inc. Adopts
Amendment to Rights Agreement
Camarillo, Calif., September 30, 2004 -
Electronic Clearing House, Inc. (Nasdaq: ECHO), a
leading provider of electronic payment and transaction processing
services, announced today that its
board of directors adopted an amendment to its amended and restated rights
agreement. The purpose of the amendment was to, among other matters,
adjust the purchase price of the Rights and Second Rights authorized and
declared under the terms of the Amended and Restated Rights Agreement
dated January 29, 2003 (the "Restatement"), between ECHO
and OTR, Inc., ECHO's transfer agent and the "Rights
Agent" under the Restatement, so that each Right and Second Right (as
defined in the Restatement) could represent a similar economic effect as
was intended for such Right and Second Right on January 29, 2003, the date
the Restatement was executed.
The purpose of the Rights Agreement,
as originally adopted in 1996, and as amended and restated by the
Restatement in January 2003, was to protect ECHO stockholders
in the event of an unsolicited attempt to acquire ECHO for an
inadequate price and to protect against abusive practices that do
not treat all ECHO stockholders equally, such as, among
others, partial and two tier tender offers, coercive offers, and
creeping stock accumulation programs, etc. The original Rights
Agreement and the Restatement are intended to make the cost of such
abusive practices prohibitive and create an incentive for a
potential acquirer to negotiate in good faith with the Board of
Directors. The original Rights Agreement and the Restatement are not
intended to prevent all unsolicited offerors from acquiring ECHO.
The Restatement, as amended, provides
that each Right and Second Right will initially entitle stockholders
to purchase fractional shares of ECHO's preferred stock (or
shares of its common stock, if provision is made by the Board in
accordance with the Restatement) for $2.00 per each Right and Second
Right. However, the Rights and Second Rights are not immediately
exercisable and will become exercisable only upon the occurrence of
certain events. Generally, if a person or group acquires, or
announces a tender or exchange offer that would result in the
acquisition of 20 percent or more of ECHO's common stock
while the Restatement remains in place, then, unless the Rights and
Second Rights are redeemed by ECHO for $0.001 per each Right
and Second Right, the Rights and Second Rights will become
exercisable by all rights holders, except the acquiring person or
group, for shares of ECHO or shares of the third party acquirer
having a value of eight times the Rights' and Second Rights'
then-current exercise price.
About Electronic Clearing House, Inc.
(ECHO)
ECHO (www.echo-inc.com)
provides a complete solution to the payment processing needs of
merchants, banks and collection agencies. ECHO's services
include debit and credit card processing, check guarantee, check
verification, check conversion, check re-presentment, and check
collection.
Safe Harbor Statement Under the
Private Securities Litigation Reform Act of 1995: Any statements set
forth above that are not historical facts are forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, such factors as fluctuations in
demand for the Company's products and services, the introduction of
new products and services, the Company's ability to maintain
customer and strategic business relationships, technological
advancements, impact of competitive products and services and
pricing, growth in targeted markets, the adequacy of the Company's
liquidity and financial strength to support its growth, and other
information detailed from time to time in the Company's filings with
the United States Securities and Exchange Commission.
Contact:
Electronic Clearing House, Inc.
Donna Rehman, 805-419-8533
corp@ECHO-inc.com
http://www.echo-inc.com
or
Coffin Communications Group
Crocker Coulson, 818-789-0100
crocker.coulson@coffincg.com
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