content: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C.  20549
  
  
                                      FORM 8-K
  
  
                                   CURRENT REPORT
  
  
                       Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934
  
  
  Date of Report (Date of earliest event reported) April 27, 1999
  
  
  
                          ELECTRONIC CLEARING HOUSE, INC.                     
               (Exact name of registrant as specified in its charter)
  
  
  
  NEVADA                            0-15245                 93-0946274     
  (State or other jurisdiction    (Commission              (IRS Employer
      of incorporation)            File Number)             Identification       
                                                               No.)
  
  
  
  28001 Dorothy Drive, Agoura Hills, California            91301              
  (Address of principal executive offices)                (Zip Code)
  
  
  
          Registrant's telephone number, including area code (818) 706-8999
  
  
  
                                                                                 
            (Former name or former address, if changes since last report)
  
  
  
  
  
  
  
  
  
  ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
  
       On April 27, 1999, Electronic Clearing House, Inc., a Nevada corporation
  ("ECHO"), acquired Magic Software Development, Inc. ("Magic"), a New Mexico
  corporation, through a merger (the "Merger") of ECHO's wholly-owned
  subsidiary, ECHO Acquisition Corporation, a New Mexico corporation ("EAC"),
  with and into Magic.  The Merger was consumated on the terms set forth in an
  Agreement and Plan of Reorganization dated April 20, 1999, by and among ECHO,
  EAC and Magic (the "Merger Agreement"), attached hereto as Exhibit 2.1. As a
  result of the Merger, Magic is now a wholly-owned subsidiary of ECHO.
  
       Magic is a provider of electronic check verification, electronic check
  re-presentment, check conversion, and check guarantee solutions to financial
  services companies and retailers across the nation.  Magic processes over 75
  million check verification transactions per year, totaling over two billion
  dollars.  Magic currently employs 13 full-time employees, primarily
  programmers and engineers.
  
       At the present, a majority of Magic's revenue is generated from
  electronic check verification.  Electronic check verification is the process
  of using an electronic device to verify information about a check being
  presented for payment.  The information is verified against data, which have
  previously been collected and stored in a database.  A verification compares
  information to a negative database, a positive database, or combination of
  both.  ECHO intends to offer all of the services and products of Magic to its
  core merchant base once Magic is fully integrated into ECHO's operations.
  
       Pursuant to the Merger Agreement, ECHO issued a total of 1,000,000 shares
  of common stock ("Base Shares") to the selling shareholders of Magic.  The
  Base Shares are to be held in escrow, and 500,000 shares will be released to
  the selling shareholders of Magic on April 1, 2001 and 500,000 shares will be
  released on April 1, 2002.  In addition, up to 1,000,000 shares of common
  stock ("Performance Shares") will be issued to the Magic selling shareholders
  upon the achievement of certain predetermined earnings goals for fiscal year
  2000 and 2001.  Any Performance Shares issued will be held in escrow and 50%
  will be released on April 1, 2003 and the balance to be released on April 1,
  2004.  The  Merger is being accounted for as a purchase, not a pooling of
  interests.
  
       All liabilities and expenses paid by ECHO in connection with the Merger
  were funded from ECHO's working capital.  ECHO expects its operating results
  to be adversely affected in the first year as a result of the Merger.
  
       The description of the Merger contained herein is qualified in its
  entirety by reference to the Merger Agreement and the Press Releases issued by
  ECHO dated April 20, 1999, and April 29, 1999, copies of which are filed
  herewith and incorporated herein by reference as Exhibits 2.1 and 99.1
  respectively.
  
  
  
  
  
  
  
  
  ITEM 7.  FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
  
       (a)  FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.  Financial statements
            of the business acquired, prepared pursuant to Rule 3-05 of
            Regulation S-X, are unavailable as of the date of this filing.  Such
            information will be filed on or before July 9, 1999.
  
       (b)  PRO FORMA FINANCIAL INFORMATION.  Pro Forma financial information
            required pursuant to Article 11 of Regulation S-X is unavailable as
            of the date of this filing.  Such information will be filed on or
            before July 9, 1999. 
  
  
       (c)  EXHIBITS:
          
            Exhibit
            Number         Description of Document
  
              2.1          Merger Agreement and Plan of Reorganization, dated 
                           April 20, 1999, by and among ECHO, EAC and Magic
                                     
             99.1          Press Release, dated April 29, 1999
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <PAGE>
  
  
  
                                     SIGNATURES
  
  
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
  
  
  
  
                                ELECTRONIC CLEARING HOUSE, INC.
                                       (Registrant)
  
  
  
  
                                By:                                       
                                     Alice L. Cheung, Treasurer & 
                                       Chief Financial Officer
  
  
  
  Dated:  May 11, 1999
  
  
  
  <PAGE>
                                                                      EXHIBIT 2.1
  
  
                     MERGER AGREEMENT AND PLAN OF REORGANIZATION
  
  This Merger Agreement and Plan of Reorganization ("Agreement") is made as of
  the 20th day of April, 1999 by and among Electronic Clearing House, Inc., a
  Nevada corporation ("ECHO"), ECHO Acquisition Corporation, a New Mexico
  corporation ("EAC"), Magic Software Development, Inc., a New Mexico
  corporation ("Magic"), and the individuals listed and signing at the end of
  this Agreement in Article XI ("Selling Shareholders").
  
  WHEREAS the Selling Shareholders own all of the right, title and interest in
  all of the outstanding shares of capital stock of Magic ("Magic Shares") as
  set forth in Article XI;
  
  WHEREAS EAC desires to merge into Magic and Magic desires to merge with EAC as
  set forth in this Agreement ("Merger");
  
  WHEREAS Selling Shareholders approve the Merger and desire to receive shares
  of ECHO in connection with the Merger;
  
  WHEREAS ECHO is wiling to issue up to 2,000,000 shares of the common capital
  stock of ECHO in connection with the Merger ("ECHO Shares");
  
  WHEREAS Magic would become a wholly-owned subsidiary of ECHO as a result of
  the Merger;
  
  NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS SET FORTH HEREIN, THE
  PARTIES AGREE AS FOLLOWS:
  
  
  
                                          I
                                TERMS OF TRANSACTION
  
  1.1      Merger and Effect of Merger.
  
           1.1.1.     Merger of EAC and Magic. EAC will be merged with and into
  Magic effective on date that Articles of Merger in the form attached to this
  Agreement as Exhibit Al are filed with the New Mexico Secretary of State
  ("Effective Date").
  
           1.1.2.     Magic Surviving Corporation. Magic will be the surviving
  corporation in the Merger. After the Effective Date, Magic's corporate name,
  existence and all its purposes, powers and objectives will continue unaffected
  and unimpaired by the Merger, Magic will continue to be governed by the laws
  of the state of New Mexico, and Magic will succeed to EAC's rights, assets,
  liabilities and obligations in accordance with the Business Corporation Act of
  New Mexico.
  
           1.1.3.     Articles of Incorporation. No changes in the Articles of
  Incorporation of Magic will be effected by the Merger. The Articles of
  Incorporation of Magic on the Effective Date will continue to be the Articles
  of Incorporation of Magic after the Effective Date. From and after the
  Effective Date, said Articles of incorporation, as they may be amended from
  time to time, will be, and may be separately certified as, the Articles of
  Incorporation of Magic
  
          1.1.4  Bylaws. The Bylaws of Magic in effect on the Effective Date
  shall be the Bylaws of Magic after the Effective Date until those bylaws are
  duly altered, amended or repealed.
  
          1.1.5  Directors. The Directors of Magic on the Effective Date will be
  the Directors of Magic after the Effective Date until their successors are
  duly elected and qualify. The officers of Magic on the effective date shall be
  the officers of Magic after the effective date, subject to the terms of this
  Agreement.
  
          1.1.6  Conversion of EAC Shares. Effective on the Merger, each share
  of EAC at the time issued and outstanding will be converted into one share of
  the common capital stock of Magic.
  
          1.1.7  Conversion of Magic Shares. Effective on the Merger, all of the
  shares of Magic at the time issued and outstanding (other than dissenting
  shares to the extent provided in the Business Corporation Act) will by virtue
  of the Merger and without action on the part of any shareholder of Magic be
  converted into the right to receive ECHO Shares as provided in this Agreement.
  
          1.1.6  Tax-Free Reorganization. The Merger is intended by ECHO, EAC,
  Magic and the Selling Shareholders to be a tax-free reorganization as defined
  in Section 368(a)(l)(A) of the Internal Revenue Code of 1986, as amended
  ("Code") (it being understood that no representation or warranty as to such
  effect is or has been made); and this Agreement is intended to be a, Plan of
  Reorganization under that Section.
  
  1.2     Base Shares
  
          1.2.1    Issuance of Base Shares to Selling Shareholders at the
  Effective Date.  Upon effectiveness of the Merger, ECHO will issue to each of
  the Selling Shareholders the number of ECHO Shares set forth opposite that
  Selling Shareholders  name in Article XI as "Base Shares," aggregating a total
  of 1,000,000 Base Shares, subject to the terms of this Agreement.
  
          1.2.2  Escrow of Base Shares.Certificates representing the Base Shares
  shall be delivered to the Secretary of ECHO, to be held in escrow in
  accordance with an escrow agreement containing the terms set forth in the form
  of escrow agreement attached to this Agreement as Exhibit A2 ("Escrow
  Agreement"). Subject to the terms of the Escrow Agreement, certificates for
  500,000 Base Shares shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2001; and certificates for the remaining
  500,000 Base Shares shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2002. Base Shares reflected in certificates
  held in escrow cannot be transferred or otherwise alienated until released
  from escrow except as provided in this Agreement.
  
  
  1.3     Performance Shares.
  
          1.3.1. Issuance of Performance Shares to Selling Shareholders On
  Achievement of Performance Goals. As of the last day of Performance Period # 1
  (April 1, 1999 through March 31, 2001) and Performance Period #2 (April 1,
  2001 through March 31, 2002). ECHO will issue to each of the Selling
  Shareholders the number of ECHO Shares to which that Selling Shareholder shall
  be entitled pursuant to this Section 1.3.1, up to the total number of Shares
  set forth opposite that Selling Shareholder's name in Article XI as
  "Performance Shares," aggregating up to a maximum of 1,000,000 Performance
  Shares, subject to the terms of this Agreement.
  
       The number of Performance Shares that shall be issued under this Section
  1.3.1 Is based on Net Earnings accrued during Performance Period #1 and
  Performance Period #2.
  
       Net Earnings shall be net earnings before taxes as reflected on the
  income statement of Magic for the applicable Performance Period, calculated in
  accordance with generally accepted accounting principles. Net earnings shall
  reflect deductions for administrative charges of ECHO in accordance with
  ECHO's good faith general policy for allocating administrative charges to
  subsidiaries. ECHO's current policy for allocating administrative charges is
  set forth in Exhibit B.
  
       In the event of a merger of ECHO or Magic with another company (other
  than the Merger contemplated by this Agreement), whether ECHO or Magic is the
  surviving company or absorbed company, or the acquisition of 50 percent of the
  outstanding shares of ECHO or Magic by another company or other person or
  group of persons in the same transaction or series of related transactions
  prior to the end of any Performance Period, Net Earnings shall be the Net
  Earnings calculated as previously described divided by two (2) in respect to
  the period from the closing of such transaction or series of related
  transactions until the end of Performance Period #2.
  
       Performance Period #1 shall commence on April 1, 1999 and shall terminate
  on March 31, 2001.
  
  
       For Performance Period #1, Performance Shares shall be issued in
  accordance with the following:
  
                                    Number of
        Net Earnings                Performance Shares
  
        Less than $250,000          None
        $250,000 or more            250,000 plus one Performance Share
                                    for each $1.00 by which Net Earnings
                                    exceed $250,000, up to the maximum
                                    of 1,000,000 Performance Shares
  
       Performance Period #2 shall commence on April 1, 2001 and shall terminate
  on March 31, 2002. For Performance Period #2, Performance Shares shall be that
  percentage of the Remaining Shares (as defined hereinafter) represented by the
  ratio: (1) the amount by which Net Earnings for Performance Period #2 exceeds
  $1,000,000, up to a maximum of $1,000,000; divided by (2) $1,000,000. Thus, if
  500,000 shares are issued in respect to Performance Period #1 (resulting in
  500,000 Remaining Shares) and Net Earnings for Performance Period #2 were
  $1,600,000, then 300,000 shares would be issued in respect to Performance
  Period #2; that is $1,600,000 - $1,000,000 = $600,000, $600,000/$1,000,000 =
   .60, .60 x 500,000 = 300,000. "Remaining Shares" means 1,000,000 Performance
  Shares less the number of Performance Shares issued with respect to
  Performance Period #1.
  
       Each Selling Shareholder shall be entitled to receive that percentage of
  the aggregate number of Performance Shares issued as is pro rata to the number
  of Magic Shares held by that Shareholder immediately prior to Closing.
  
       Fractional shares shall not be issued. Any fraction of a share shall be
  rounded up to 1 share.
  
       The number of Performance Shares to be issued hereunder shall be
  appropriately adjusted to reflect any stock split, stock dividend, stock
  combination or similar transaction effected without additional payment for
  shares. The foregoing shall not apply to any conversion of convertible
  securities or any issue of securities on exercise of warrants or options to
  purchase such securities.
  
        1.3.2 Escrow of Performance Shares. Certificates for Performance Shares
  shall be delivered to the Secretary of ECHO immediately on issue, to be held
  in escrow in accordance with the Escrow Agreement. Subject to the terms of the
  Escrow Agreement, certificates for fifty percent (50%) of the aggregate number
  of Performance Shares that shall have been issued with respect to Performance
  Periods #1 and #2 shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2003; and certificates for the remaining
  fifty percent (50%) of the Performance Shares that shall have been so issued
  shall be released from the escrow and delivered to the Selling Shareholders on
  April 1, 2004. Thus, if 500,000 Performance Shares are issued with respect to
  Performance Period #1 ending March 31, 200 1, and 300,000 Performance Shares
  are issued with respect to Performance Period #2 ending March 31, 2002,
  aggregating 800,000 Performance Shares, certificates for 400,000 of those
  Performance Shares will be released from the escrow on April 1, 2003 and
  certificates for 400,000 of those Performance Shares will be released from the
  escrow on April 1, 2004.
  
       Performance Shares reflected in certificates held in escrow cannot be
  transferred or otherwise alienated until released from escrow, except as
  provided in this Agreement.
  
        1.4 Shareholder Rights. Subject to the terms of the Escrow Agreement,
  Selling Shareholders shall have all of the rights of Shareholders with respect
  to Base Shares and Performance Shares upon issuance thereof, except the right
  to assign or transfer those Shares while such Shares are held in the escrow
  subject to the terms of this Agreement.
  
        1.5 Allocation of Base Shares. For ECHO tax and accounting purposes, the
  parties intend that all Base Shares issued to Selling Shareholders shall be
  allocated in respect to Magic tangible assets at book value of those tangible
  assets and in respect to Magic intangible assets at fair market value of those
  intangible assets.
  
        1.6 Limited Right to Transfer. Notwithstanding any other provision of
  this Agreement, Selling Shareholders shall have the right to transfer ECHO
  Shares to any person, provided that: (1) the transfer does not violate any
  federal or state securities law or other law, (2) the transferee agrees to be
  bound by all of the terms of the Escrow Agreement, (3) the Selling
  Shareholders assume all tax liabilities arising out of the transfer; and (4)
  the Selling Shareholders indemnify ECHO against any claim and/or liability
  arising out of such transfer.
  
                                         II
                                   MAGIC EMPLOYEES
  
       2.1  Kris D. Winckler. Effective as of the Effective Date ECHO agrees to
  cause Magic to employ Kris D. Winckler in the position of President, upon the
  terms and conditions set forth in Exhibit Cl to this Agreement.
  
       2.2  Steven D. Kirk. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Steven D. Kirk in the position of Vice President-Sales,
  upon the terms and conditions set forth in Exhibit C2 to this Agreement.
  
       2.3  Robert L. Hare. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Robert L. Hare in the position of Vice President-
  Development, upon the terms and conditions set forth in Exhibit C3 to this
  Agreement.
  
       2.4  Steven J. Freed. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Steven J. Freed in the position of Vice President-
  Operations, upon the terms and conditions set forth in Exhibit C4 to this
  Agreement.
  
       2.5  Other Employees. ECHO and Kris D. Winckler will determine whether
  employees of Magic other than those referred to in Sections 2.1 through 2.4
  shall be retained as employees of Magic. Any retention of those employees will
  be on an "at-will" basis, unless ECHO agrees otherwise. There are no
  assurances that those employees will be retained for any period of time after
  the Effective Date, and any or all of such employees may be terminated at any
  time for any reason or no reason.
  
  
                                         III
                          REPRESENTATIONS AND WARRANTIES OF
                           MAGIC AND SELLING SHAREHOLDERS
  
       Magic and the Selling Shareholders jointly and severally represent and
  warrant to ECHO as of the date of this Agreement and as of the Effective Date
  as follows, except as set forth in Exhibit D:
  
       3.1 Organization and Standing: Authority. Magic is a corporation duly
  organized, validly existing, and in good standing under the laws of New
  Mexico. Magic has the requisite corporate power and authority to own, lease
  and operate its properties and assets, and to carry on its business as
  presently conducted and as proposed to be conducted and to enter into this
  Agreement. All corporate action on the part of Magic, its shareholders,
  directors and officers necessary for the authorization, execution, delivery
  and performance of this Agreement by Magic has been taken or will be taken
  prior to the Closing. This Agreement, when executed and delivered, is a valid
  and binding obligation of Magic and each of the Selling Shareholders, and will
  not violate the Articles of incorporation or bylaws of Magic or any agreement,
  law, regulation, government order or other obligation under which Magic or any
  of the Selling Shareholders is bound. Magic is duly qualified as a foreign
  corporation to do business and is in good standing in each jurisdiction where
  the character of its properties owned or held under lease or the nature of its
  activities makes such qualification necessary, except where failure to be so
  qualified will not have an effect on the business, properties, assets,
  condition (financial or otherwise), liabilities, operations or prospects of
  Magic taken as a whole in an amount in excess of $10,000 ("Material Adverse
  Effect").
  
       3.2 Corporate Documents. Magic has delivered to ECHO true copies of its
  Articles of Incorporation and its bylaws as currently in effect, all stock
  records, and all minutes of meetings and all consents and other actions of its
  shareholders, board of directors, executive committee, and other governing
  boards. There shall have been no changes to these documents at the time of the
  Effective Date. Magic is in full compliance with all provisions of such
  documents.
  
       3.3 Bank Statements. Magic has delivered statements of all banks and
  other institutions at which it maintains funds for each of the three preceding
  months. Magic does not maintain funds at any institution other than those for
  which statements have been delivered hereunder.
  
       3.4 Subsidiaries. Magic has no subsidiaries or affiliated companies and
  does not otherwise own or control, directly or indirectly, any other
  corporation, association or business entity.
  
       3.5 Capitalization. The authorized capital stock of the Magic consists
  10,000 shares of Common Stock, of which 100 shares are issued and outstanding.
  All issued and outstanding shares have been duly authorized and validly
  issued, and are fully-paid and nonassessable. There are no outstanding
  options, warrants, conversion privileges or other rights presently outstanding
  to purchase or otherwise acquire any authorized but unissued shares of capital
  stock or other securities of Magic, nor any agreements to issue any such
  rights. All outstanding capital stock was issued in full compliance with all
  applicable laws. There are no bonds, debentures, notes or other evidences of
  indebtedness having the right to vote on any matter.
  
       3.6 Financial Statements. Magic has delivered to ECHO a balance sheet and
  income statement for each of the fiscal years ended December 31, 1994, 1995,
  1996, 1997, and 1998, prepared in accordance with generally accepted
  accounting principles. The balance sheet and income statement for the fiscal
  year ended December 31, 1998 has been audited by a firm of public accountants
  acceptable to ECHO. The balance sheets fairly present the assets, liabilities,
  and financial condition of Magic as of the dates presented and the income
  statements fairly present the results of operations of Magic for the periods
  therein referred to. To the best of Magic's and each Selling Shareholder's
  knowledge, there have been no material changes in any asset or liability
  reflected in the most recent such balance sheet after the date of that balance
  sheet. Magic has not sold, exchanged or otherwise disposed of any of its
  assets or rights, other than in the ordinary course of business.
  
        3.7 Liabilities. To the best of Magic's and each Selling Shareholder's
  knowledge, other than as disclosed in the most recent balance sheet or other
  document delivered to ECHO, Magic has no direct or contingent liabilities. 
  There are no known or expected actions, suits, proceedings or investigations
  pending against Magic or its properties before any court, governmental agency,
  or other tribunal, domestic or foreign. No known claims against Magic or any
  of its shareholders, directors, officers, employees, agents or consultants
  have been asserted claiming any rights to any tangible or intangible property
  owned, claimed or used by Magic, or claiming that the business of Magic
  violates any patent, trade secret, or other right of any person including any
  former or other present employer of any such guarantor, surety, co-signer,
  endorser or co-maker with respect to the liability of any other person. Magic
  has not declared or paid any dividends, or authorized or made any distribution
  upon or with respect to any class or series of its capital stock. Magic has
  given no power of attorney to any person.
  
        3.8 Intangible Assets. A list of all intangible assets, including
  without limitation all concepts, designs, ideas, methods, computer programs,
  systems, patents, trade secrets, trademarks, trade names and copyrights, is
  set forth in Exhibit E. Developing, marketing, assigning or transferring, or
  other use of any such intangible asset after the Effective Date will not
  infringe the rights of any other person. Magic possess sufficient legal rights
  to all intangible assets necessary for the conduct of Magic's business as now
  conducted and as proposed to be conducted. Without limiting the foregoing,
  Magic has not entered into any cross-licensing arrangement with any person or
  entity, and there are no agreements relating to and materially affecting any
  intangible asset or the use or ownership thereof, including without limitation
  license agreements, confidentiality or non-disclosure agreements, assignments
  or agreements to assign, development agreements, settlement agreements or
  similar agreements.  None of the Selling Shareholders, and to the best of
  Magic's and each Selling Shareholder's knowledge no other person who is an
  employee of Magic, is obligated under any agreement or subject to any
  judgment, decree or order of any court or administrative agency that would
  interfere with such person's duties with Magic or that would conflict with
  Magic's business as presently proposed to be conducted. Magic will not need to
  utilize any inventions, trade secrets or proprietary information of any of its
  employees or shareholders made prior to their employment by Magic, except for
  inventions, trade secrets or proprietary information that have been assigned
  to Magic (copies of all such assignments having been delivered to ECHO). 
  Neither Magic nor any Selling Shareholder has received information that any
  other person is engaged in any activity or contemplating any activity that
  might constitute an infringement or other violation of Magic's rights with
  regard to any of its intangible assets.
  
       3.9 Agreements and Licenses. All oral and written agreements, including
  without limitation all licenses, to which Magic is a party or under which it
  is bound are listed in Exhibit F. All such agreements and licenses have been
  delivered to ECHO. All such agreements and licenses are valid, binding and
  enforceable in accordance with their terms. Magic is not in default or breach
  of any such agreement or license. Execution and performance of this Agreement
  will not violate or breach any such agreement or license. Without limiting the
  generality of the foregoing, no warranty or representation has been made to
  any customer of Magic other than as set forth in written agreements with such
  customer, all of which are listed in Exhibit F.
  
       3.10 Title to Properties. Magic has good and marketable title to all its
  properties and assets, including leasehold interests, trade secrets,
  trademarks, copyrights, patents, software, systems and other intangible
  assets. Magic's tide to its properties and assets is free and clear of any
  lien, claim, encumbrance or restriction of any nature. In particular, without
  limiting the generality of the foregoing, no person has any claim, lien or
  other rights in or against any intellectual property or other intangible asset
  of Magic including without limitation any of Magic's software programs except
  pursuant to written license agreements all of which are listed in Exhibit F.
  To the best of Magic's and each Selling Shareholder's knowledge, there are no
  pending or threatened proceedings of any nature alleging any violation of any
  right of any other person with respect to any of Magic's properties or assets.
  
       3.11 Accounts Receivable and other Receivables. To the best of Magic's
  and each Selling Shareholder's knowledge, all accounts receivable are current
  and collectible in the ordinary course of business Magic has not made any
  loans or advances to any person, other than in the ordinary course of
  business.
  
       3.12  Insurance. All policies of insurance owned or held by Magic are
  listed in Exhibit G. All such policies are in full force and effect, and will
  not be affected by the transactions contemplated by this Agreement.
  
       3.13  Leases. All leases under which Magic is bound are listed in Exhibit
  H. All such leases are in full force and effect, and will not be affected by
  the transactions contemplated by this Agreement. Magic is not in default or
  breach of any lease.
  
       3.14  Employees. Magic has no (a) retirement, pension, profit sharing,
  deferred compensation, bonus, or other compensation plan, other than regular
  salaries and wages, (0) stock option, stock purchase or other employee stock
  or equity plan, (c) medical or disability plan, (d) other employee benefit
  plan, (e) employment agreement of any kind. To the best of Magic's and the
  Selling Shareholder's knowledge, no director, officer or employee is obligated
  under any contract, license, covenant, commitment or other agreement, or
  subject to any judgment, decree, or other order that would conflict with his
  or her obligation to use his or her best efforts to promote the interests of
  Magic. Except as provided in this Agreement, no employee of Magic has been
  granted the right to continued employment by Magic or to any material
  compensation following termination of employment by Magic or consummation of
  the transactions contemplated by this Agreement. Neither Magic nor any Selling
  Shareholder is aware that any officer or employee intends to terminate his or
  her employment with Magic.
  
       3.15 Taxes. All tax liabilities of any nature incurred by Magic have been
  paid. To the best of Magic's and each Selling Shareholder's knowledge, no
  facts exist that would be grounds for the assessment of any additional tax
  liability. All required tax returns of Magic have been accurately prepared and
  duly and timely filed. Magic has not been advised that any of its returns,
  federal, state or other, have been or are being audited.
  
       3.16 Compliance with Law.  To the best of Magic's and each Selling
  Shareholder's knowledge, Magic is in full compliance with all laws and
  regulations applicable to its business, and all judgments, decrees, orders,
  and writs to which Magic is subject (copies of all of which have been
  delivered to ECHO). To the best of Magic's and each Selling Shareholder's
  knowledge, Magic possesses from the appropriate governmental authorities, all
  licenses, permits, certificates, approvals, franchises and other
  authorizations as are necessary for Magic to engage in the business currently
  conducted.
  
       3.17  Governmental Consent. To the best of Magic's and each Selling
  Shareholder's knowledge, after consultation with legal counsel, no consent,
  approval or authorization of or designation, declaration or filing with any
  governmental authority on the part of Magic or the Selling Shareholders is
  required in connection with the valid execution and delivery of this Agreement
  or the consummation of any other transaction contemplated hereby except filing
  Articles of Merger as provided in Section 1.1.
  
       3.18 Investment Intent. Each of the Selling Shareholders will acquire the
  ECHO Shares to be issued to that Shareholder pursuant to this Agreement for
  investment for his own account, not as a nominee or agent, and not with a view
  to or for sale in connection with any distribution of the ECHO Shares, or any
  part thereof; he has no present intention of selling, granting participation
  in' or otherwise distributing the ECHO Shares.
  
       3.19 No Registration of ECHO Shares. Each of the Selling Shareholders
  understands that the ECHO Shares have not been registered under the Securities
  Act of 1933 ("Securities Act") nor registered or qualified under the New
  Mexico Securities Act, the Washington Securities Act including Chapter 21.20
  of the Revised Code of Washington ("RCW"), nor other applicable securities
  law, on the basis that the sale provided for in this Agreement and the
  issuance of securities hereunder is exempt from registration under the
  Securities Act and from registration or qualification under applicable
  securities laws, and that ECHO's reliance on such exemptions is predicated on
  the representations set forth herein. in this connection, each of the Selling
  Shareholders understands that the offering of ECHO Shares contemplated by this
  Agreement and related documents and disclosures have not been reviewed or
  recommended by the U.S. Securities and Exchange Commission ("SEC") nor by the
  securities administrator of New Mexico, Washington or any other state or
  jurisdiction. Therefore, ECHO Shares cannot be resold unless registered under
  the Securities Act, and registered or qualified under any applicable state
  securities law including without limitation the Securities Act of Washington
  Chapter 21.20 RCW and the Securities Act of New Mexico, or unless an exemption
  from registration is available.
  
       3.20 Restrictions on Transfer. Each of the Selling Shareholders
  understands that the ECHO Shares cannot be sold or transferred unless
  registered under the Securities Act of 1933 and registered or qualified under
  applicable state or other securities laws, or an exemption applies.
  
       3.21 Knowledge of Business/Ability to Bear Economic Risk. Each of the
  Selling Shareholders is familiar with the business of ECHO, and has received
  each of the following: (1) ECHO's 1998 Annual Report to Shareholders; (2) Form
  10-K for the Fiscal Year ended September 30, 1998; (3) Form 10-Q for period
  ended December 31, 1998; (4) Proxy Statement dated January 4, 1999. Each of
  the Selling Shareholders understands that he can request, and that ECHO will
  promptly provide to the Selling Shareholder on such request, any exhibit
  required to be filed with the Securities and Exchange Commission m connection
  the foregoing documents including the Exhibits referred to in Part IV of the
  aforementioned Form 10-K. Each of the Selling Shareholders is experienced in
  the type of business engaged in by ECHO, is able to fend for himself in the
  transactions contemplated by this Agreement, has such knowledge and experience
  in financial and business matters as to be capable of evaluating the merits
  and risks of investment in the ECHO Shares, and has the ability to bear the
  economic risks of the investment.
  
       3.22  Due Diligence. Each of the Selling Shareholders represents that he
  has had the opportunity to ask questions of; and to receive answers from, ECHO
  concerning the terms and conditions of his investment in the ECHO Shares and
  to obtain additional information (to the extent ECHO possessed such
  information or could acquire it without unreasonable effort or expense)
  necessary to verify the accuracy of any information furnished to him or to
  which he had access.
  
       3.23  Free of Liens and Encumbrances. The Magic Shares are validly
  issued, fully-paid and nonassessable, and are free of any liens, claims,
  encumbrances, or other restrictions of any kind.
  Neither the execution of this Agreement nor the transactions contemplated
  herein shall violate the Articles of incorporation or bylaws of Magic, any
  agreement, or any law, rule or order of any governmental authority or any
  court.
  
       3.24  Operation of Software and Systems. All data processing systems,
  including all software programs, of Magic operate normally in accordance with
  the specifications and functions for those systems and software programs
  previously disclosed to ECHO. Magic is making all such systems ready for the
  year 2000 and does not expect such systems to be adversely affected by the
  advent of that year. Except as stated in the first sentence of this Section
  324, neither Magic nor any of the Selling Shareholders is aware of any
  material defect in design, materials, manufacture, performance or otherwise in
  any products or services developed, manufactured, distributed, licensed, sold
  or provided by Magic since Magic's incorporation or any defect in repair to,
  service of; or replacement of; any such products which would give rise to a
  Material Adverse Effect.
  
       3.25  Suppliers and Customers. No substantial supplier or customer (who
  accounted for more than 2% of aggregate 1998 purchases or more than 2% of
  aggregate 1998 revenues, as the case may be) or any prospective customer, has
  indicated to Magic or to any Selling Shareholder that it intends to terminate
  its relationship with Magic, nor does Magic or any Selling Shareholder have
  knowledge that any such supplier or customer intends to terminate such
  relationship. There is no information that would indicate that Magic does not
  have good business relations with each supplier and customer, or that
  consummation of the transactions contemplated by this Agreement would or might
  disrupt Magic's existing relationships with any such supplier or customer.
  
       3.26  Records. Magic has made available all of its records to ECHO in all
  media, including without limitation all financial records, product records,
  software code, written operating procedures, customer records, personnel
  records, and insurance records.
  
       3.27  No Material Adverse Effect. To the best of Magic's and each Selling
  Shareholder's knowledge, there does not exist any fact or circumstance which,
  alone or together with another fact of circumstance, could reasonably be
  expected to have a Material Adverse Effect on the business, properties,
  assets, condition (financial or otherwise), liabilities, operations,
  properties or future prospects of Magic.
  
       3.28  Brokers and Finders.  No broker, finder or investment banker is
  entitled to any brokerage, finder's or other fee or commission in connection
  with the transactions contemplated by this Agreement based on arrangements
  made by Magic or any of the Selling Shareholders.
  
       3.29  Truth of Representations and Warranties. All of the
  representations and warranties set forth in this Article III shall be true as
  of the time of the Effective Date. No representation or warranty or other
  statement made to ECHO by Magic or any Selling Shareholder contains any untrue
  statement of a material fact or omits to state a material fact necessary to
  make the statement, in light of the circumstances under which the statement
  was made, not misleading.
  
       3.30  Survival of Provisions. The provisions of this Article III shall
  survive Closing and the Merger.
  
       3.31  Knowledge Representation. When the words "to the best of Magic's
  and each Selling Shareholder's knowledge" appear in the provisions of this
  Article III, it is understood that no affirmative investigation has been made
  to confirm such "knowledge."
  
  
  
                                         IV
                   REPRESENTATIONS AND WARRANTIES OF ECHO AND EAC
  
       ECHO and EAC each represents and warrants to Magic and the Selling
  Shareholders as of the date of this Agreement and as of the date of the
  Effective Date as follows, except as set forth in Exhibit
  I:
  
       4.1  Organization and Standing: Authority. ECHO is a corporation duly
  organized, validly existing, and in good standing under the laws of Nevada.
  EAC is a corporation duly organized, validly existing, and in good standing
  under the laws of New Mexico. Each has the requisite corporate power and
  authority to own, lease and operate its properties and assets, and to carry on
  its business as presently conducted and as proposed to be conducted and to
  enter into this Agreement. All corporate action on the part of ECHO and EAC,
  its shareholders, directors and officers necessary for the authorization,
  execution, delivery and performance of this Agreement by ECHO and EAC has been
  taken or will be taken prior to the Effective Date This Agreement, when
  executed and delivered, is a valid and binding obligation of ECHO and EAC and
  will not violate the Articles of incorporation or bylaws of ECHO or EAC or any
  agreement, law, regulation, government order or other obligation under which
  ECHO or EAC is bound.
  
       4.2  Capitalization. The authorized capital stock of ECHO consists
  26,000,000 shares of Common Stock, of which 15,114,300 shares were issued and
  outstanding on September 30,1998; and 5,000,000 shares of Convertible
  Preferred Stock, of which 23,511 shares of Series H Preferred Stock were
  issued and outstanding on that date, 325,000 shares of Series K Preferred
  Stock were issued and outstanding on that date, and 168,000 shares of Series L
  Preferred Stock were issued and outstanding on that date. All issued and
  outstanding shares have been duly authorized and validly issued, are fully-
  paid and nonassessable, and were issued in full compliance with all applicable
  laws. Options to acquire up to 3,801,000 shares of Common Stock at exercise
  prices ranging from $0.40 to $1.06 per share were outstanding on September 30,
  1998, and warrants to acquire up to 1,000,000 shares of Common Stock at $0.40
  per share were outstanding on that date. Holders of shares of Common Stock
  have one vote for each share of Common Stock held in connection with matters
  on which a shareholder vote is taken, the right to receive dividends and other
  distributions when, as and if declared by the board of directors, and such
  other rights as may be set forth in the Articles of incorporation and required
  by applicable law The rights of holders of capital stock of ECHO are more
  fully described in the Articles of incorporation of ECHO, and the foregoing
  description in this Section 4.2 is subject in all respects to the provisions
  of those Articles. There are no bonds, debentures, notes or other evidences of
  indebtedness having the right to vote on any matter. The authorized capital
  stock of EAC consists of 10,000 shares of Common Stock of which 100 shares are
  issued and outstanding. The rights of holders of capital stock of EAC are more
  fully described in the Articles of incorporation of EAC.
  
       4.3  Corporate Documents. ECHO and EAC has each delivered to Magic true
  copies of its Articles of Incorporation and its bylaws as currently in effect.
  There shall have been no changes to these documents at the time of the
  Effective Date.
  
       4.4  Financial Statements. ECHO has delivered to Magic a balance sheet
  and income statement for each of the fiscal years ended September 30, 1994,
  1995, 1996, 1997, and 1998, prepared in accordance with generally accepted
  accounting principles. The balance sheets fairly present the assets,
  liabilities, and financial condition of ECHO as of the dates presented and the
  income statements fairly present the results of operations of ECHO for the
  periods therein referred to. To the best of ECHO's knowledge, there have been
  no material changes in any asset or liability reflected in the most recent
  such balance sheet after the date of that balance sheet.
  
       4.5  Governmental Consent. To the best of ECHO's and EAC's knowledge,
  after consultation with legal counsel, no consent, approval or authorization
  of or designation, declaration or filing with any governmental authority on
  the part of ECHO or EAC is required in connection with the valid execution and
  delivery of this Agreement, or the offer, sale or delivery of the ECHO Shares,
  or the consummation of any other transaction contemplated hereby, except
  filing Articles of Merger as provided in Section 1.1, certain securities
  filings in connection with applicable exemptions from registration and/or
  qualification requirements, and certain filings required by federal securities
  regulations.
  
       4.6  Free of Liens and Encumbrances. The ECHO Shares when issued as
  provided in this Agreement will be validly issued, fully-paid and
  nonassessable, and will be free of any liens, claims, encumbrances, or other
  restrictions of any kind except those relating to applicable securities laws
  requirements and those set forth in this Agreement. Neither the execution of
  this Agreement nor the issuance of the ECHO Shares to Selling Shareholders as
  contemplated herein shall violate the Articles of incorporation or bylaws of
  ECHO or EAC, any agreement, or any law, rule or order of any governmental
  authority or any court.
  
       4.7  Truth of Representations and Warranties. All of the representations
  and warranties set forth in this Article IV shall be true as of the Effective
  Date. No representation or warranty or other statement made to Magic or any
  Selling Shareholder by ECHO or EAC contains any untrue statement of a material
  fact or omits to state a material fact necessary to make the statement, in
  light of the circumstances under which the statement was made, not misleading.
  
       4.8  Due Diligence. ECHO represents that ECHO has had the opportunity to
  ask questions of; and to receive answers from, Magic concerning the terms and
  conditions of its investment in Magic Shares and to obtain additional
  information (to the extent Magic possessed such information or could acquire
  it without unreasonable effort or expense) necessary to verify the accuracy of
  any information furnished to ECHO or to which ECHO had access.
  
       4.9  Suppliers and Customers. No substantial supplier or customer (who
  accounted for more than 2% of aggregate 1998 purchases or more than 2% of
  aggregate 1998 revenues, as the case may be) or any prospective customer, has
  indicated to ECHO or EAC that it intends to terminate its relationship with
  ECHO or EAC, nor does ECHO or EAC have knowledge that any such supplier or
  customer intends to terminate such relationship. There is no information that
  would indicate that ECHO or EAC does not have good business relations with
  each supplier and customer, or that consummation of the transactions
  contemplated by this Agreement would or might disrupt ECHO's and EAC's
  existing relationships with any such supplier or customer.
  
       4.10  Records. ECHO and EAC has made available to Magic all records
  requested by Magic in all media, including without limitation all requested
  financial records, product records, software code, written operating
  procedures, customer records, personnel records, and insurance records.
  
       4.11  No Material Adverse Effect. To the best of ECHO's and EAC's
  knowledge, there does not exist any fact or circumstance which, alone or
  together with another fact of circumstance, could reasonably be expected to
  have an effect on the business, properties, assets, condition (financial or
  otherwise), liabilities, operations, properties or prospects of ECHO or EAC
  taken as a whole in an amount in excess of $200,000.
  
       4.12  Brokers and Finders.  No broker, finder or investment banker is
  entitled to any brokerage, finder's or other fee or commission in connection
  with the transactions contemplated by this Agreement based on arrangements
  made by ECHO or EAC.
  
       4.13  Survival of Provisions. The provisions of this Article IV shall
  survive the Effective Date and the Merger.
  
       4.14  Knowledge Representation. When the words "to the best of ECHO's and
  EAC's knowledge" appear in the provisions of this Article IV, it is understood
  that no affirmative investigation has been made to confirm such "knowledge."
  
  
                                          V
                                 RESTRICTIVE LEGENDS
  
  
       5.1  Securities Act of 1933. Each certificate representing the ECHO
  Shares shall bear a legend substantially as follows:
  
        THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
        MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
        UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
        UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2) THE TRANSFER
        IS MADE IN COMPLIANCE WITH SECURITIES AND EXCHANGE
        COMMISSION RULE 144, OR (3) ECHO RECEIVES AN OPINION OF
        COUNSEL FOR THE HOLDER OF THE SECURITIES REASONABLY
        SATISFACTORY TO ECHO, STATING THAT SUCH SALE, TRANSFER,
        ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE
        REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
        ACT.
  
       5.2  Escrow Legend. While in escrow as provided in this Agreement, each
  certificate representing ECHO Shares shall bear a legend substantially as
  follows:
  
        THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
        RESTRICTIONS ON TRANSFER SET FORTH IN AN ESCROW AGREEMENT,
        A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
        COMPANY, AND CANNOT BE TRANSFERRED EXCEPT AS PROVIDED IN
        THAT ESCROW AGREEMENT.
  
       5.3  Additional Legends. Each certificate representing ECHO Shares shall
  bear any other legend required by the securities laws or other laws of any
  jurisdiction.
  
       5.4  Restrictions on Transfer. ECHO need not register a transfer of any
  of the ECHO Shares unless the conditions and requirements specified in the
  applicable legend are satisfied. in addition, ECHO shall make a notation
  regarding the restrictions on transfer of ECHO Shares in its stock books. ECHO
  Shares shall be transferred on the books of ECHO only if transferred or sold
  in compliance with the Securities Act of 1933 and applicable state securities
  and other laws.
  
  
                                         VI
                            SELLING SHAREHOLDER COVENANTS
  
       6.1  Covenant Regarding Competition. Each of Kris D. Winckler, Steven D.
  Kirk, Robert L. Hare, and Steven J. Freed agrees that, during the three (3)
  year period after the Closing, he will not, directly or indirectly, in any
  state or territory of the United States or in any other country:
  
        (A)  engage in any enterprise which competes with Magic or may
        reasonably result in competition with Magic;
  
        (B)  solicit any employee of Magic or any consultant engaged by Magic
        for the purpose of hiring such employee or consultant;
  
        (C)  solicit any customer of Magic for the purpose of providing any
        services or any products   to such customer similar to the products sold
        to that customer by Magic.
  
       6.2  Trade Secrets. Each of the Selling Shareholders agrees that he will
  not at any time use or disclose any Trade Secrets of ECHO or any subsidiary of
  ECHO including without limitation Magic (individually and collectively
  referred to in this Section 6.2 as "ECHO"), except as otherwise agreed in a
  writing signed by a duly authorized officer of ECHO and by the Selling
  Shareholder. Trade Secrets include ECHO's marketing plans, product plans,
  customer lists, confidential proprietary rights in ECHO's intellectual
  property, and other nonpublic proprietary information that ECHO may designate
  as a "Trade Secret." Each of the Selling shareholders further agrees that he
  will not use or disclose the nonpublic proprietary information of any other
  person that the Selling Shareholder has reason to know that ECHO has an
  obligation to protect from disclosure or use.
  
       6.3 Inventions Disclaimer and Assignment. Each of the Selling
  Shareholders disclaims any right, title or interest in any tangible or
  intangible asset of Magic including without limitation any concept, design,
  idea, method, computer program, software, system, manual, documentation or
  trade Secret of Magic ("Magic Asset"), and hereby assigns and transfers to
  Magic any right, title or interest that such Selling Shareholder may now or in
  the future have in any Magic Asset. Each of the Selling Shareholders will
  assist Magic (at Magic's expense) in obtaining and from time to time enforcing
  patents, copyrights, and other legal protection for Magic Assets in the United
  States and any other country, including without limitation by executing all
  documents confirming his assignment of any Magic Asset necessary to ensure and
  perfect Magic's right to such Magic Asset and to apply for and obtain patents,
  copyrights and other legal protection.
  
       6.4  Remedies. Each of the Selling Shareholders acknowledges that a
  breach of this Article VI may cause ECHO continuing and irreparable injury to
  its business which may not be adequately compensated for by money damages.
  Each of the Selling Shareholders therefore agrees that in the event of any
  actual or threatened breach of this Article VI, ECHO shall be entitled, in
  addition to other available remedies, to a temporary restraining order and to
  injunctive preliminary and final relief to prevent any violations of this
  Article VI. in any such injunctive proceedings, the prevailing party shall be
  entitled to recover its reasonable attorneys' fees, costs and other expenses.
  
       6.5  Survival of Provisions. The provisions of this Article VI shall
  survive and continue in effect after Effective Date.
  
                                         VII
                                      INDEMNITY
  
       7.1  Indemnity by ECHO. ECHO shall indemnify and hold harmless the
  Selling Shareholders and their heirs, representatives and assigns, from any
  claims, liabilities, losses, damages and related expenses caused by breach of
  any provision of this Agreement, including without limitation any
  representation or warranty set forth in Article IV.
  
       7.2  Indemnity by Selling Shareholders. The Selling Shareholders shall
  jointly and severally indemnify and hold harmless ECHO, and its successors and
  assigns, from any claims, liabilities, losses, damages and related expenses
  caused by breach of any provision of this Agreement, including without
  limitation any representation or warranty set forth in Article III.
  
       7.3  Further Indemnity by ECHO.  ECHO agrees to indemnify Magic and the
  Selling Shareholders from all liabilities, including reasonable attorneys fees
  and court costs, arising from an alleged non-circumvention agreement between
  ECHO and Precision Life Style International Corp.
  PLIC).
  
       7.3  Survival of Provisions. The provisions of this Article VII shall
  survive and continue in effect after the Effective Date.
  
  
  
                                        VIII
                                CONDITIONS TO CLOSING
  
  
  8.1 ECHO Conditions. The obligations of ECHO under this Agreement are subject
  to the fulfillment on or before the date of Closing of each of the following
  conditions, any of which may be waived by ECHO in writing:
  
          8.1.1 Delivery of Documents at Closing. All documents required to be
  delivered to ECHO at Closing shall have been tendered for delivery to ECHO.
  
          8.1.2 Compliance with Law. All consents, authorizations, permits or
  other approvals, if any, that are required by any governmental authority or
  regulatory agency (other than filing the Articles of Merger), or under any
  agreement or other document under which ECHO or Magic is obligated, shall have
  been duly obtained and shall be effective. Consummation of the transactions
  contemplated by this Agreement shall comply with all requirements of corporate
  law applicable to mergers; and shall not violate any law, regulation, or order
  of any governmental authority or any court, nor any obligation under which
  ECHO, EAC or Magic is bound.
  
          8.1.3  ECHO Director Approval. The board of directors of ECHO shall
  have approved the execution of this Agreement.
  
          8.1.4  Magic Director Approval. The board of directors of Magic shall
  have approved this Agreement and the Merger, and shall have directed that the
  Merger be submitted to the shareholders of Magic for approval, and copies of
  the resolution of such board of directors setting forth such approvals and
  direction, certified by the President and Secretary of Magic, shall have been
  delivered to ECHO.
  
          8.1.5  Magic Shareholder Approval. The shareholders of Magic shall
  have approved the Merger as required by law, and copies of the resolution of
  such shareholders setting forth such approval, certified by the President and
  Secretary of Magic, shall have been delivered to ECHO.
  
          8.1.6  Documents. All documents delivered to ECHO pursuant to this
  Agreement shall be reasonably acceptable to ECHO.
  
          8.1.7  Adverse Changes. No material adverse change shall have occurred
  in the financial condition, working capital, assets, liabilities, business,
  operations or prospects of Magic since the date of its most recent balance
  sheet delivered to ECHO as provided in this Agreement.
  
          8.1.8  Representations and Warranties True. The representations and
  warranties of Magic and the Selling Shareholders set forth in Article III
  shall be true in all material respects as of the date of Closing.
  
          8.1.9  Employee Agreements. Each of the employees of Magic designated
  by ECHO shall have signed and delivered a Nondisclosure and Inventions
  Disclaimer Agreement substantially in the form of Exhibit J.
  
          8.1.10  Resignations of Directors and Officers. Each director and
  each officer of Magic shall have signed a resignation in the form of Exhibit
  K.
  
          8.1.11  Investor Representations. Each Selling Shareholder shall have
  delivered to ECHO an executed copy of investor Representations and, based on
  those investor Representations and other information known to ECHO, ECHO shall
  have determined that issuance of ECHO Shares to the Selling Shareholders
  complies with the Securities Act and applicable State Law.
  
  8.2   Magic/Selling Shareholder Conditions. The obligations of Magic and the
  Selling Shareholders under this Agreement are subject to the fulfillment on or
  before the date of Closing of each of the following conditions, any of which
  may be waived by Magic and Selling Shareholders holding a majority of the
  Magic Shares in writing:
  
          8.2.1  Delivery of Documents at Closing. All documents required to be
  delivered to Selling Shareholders at Closing shall have been tendered for
  delivery to the Selling Shareholders.
  
          8.2.2  Compliance with Law. All consents, authorizations, permits or
  other approvals, if any, that are required by any governmental authority or
  regulatory agency (other than filing the Articles of Merger), or under any
  agreement or other document under which ECHO or Magic is obligated, shall have
  been duly obtained and shall be effective. Consummation of the transactions
  contemplated by this Agreement shall comply with all requirements of corporate
  law applicable to mergers; and shall not violate any law, regulation, or order
  of any governmental authority or any court, nor any obligation under which
  ECHO, EAC or Magic is bound.
  
          8.2.3  EAC Director Approval. The board of directors of EAC shall have
  approved this Agreement and the Merger, and shall have directed that the
  Merger be submitted to the shareholder of EAC for approval, and copies of the
  resolution of such board of directors setting forth such approval, certified
  by the President and Secretary of EAC, shall have been delivered to the
  Selling Shareholders.
  
          8.2.4  EAC Shareholder Approval. The shareholders of EAC shall have
  approved the Merger as required by law, and copies of the resolution of such
  shareholder setting forth such approval, certified by the President and
  Secretary of EAC, shall have been delivered to ECHO. 
  
          8.2.5  Adverse Changes. No material adverse change shall have occurred
  in the financial condition, working capital, assets, liabilities, business,
  operations or prospects of ECHO since the date of its most recent balance
  sheet filed with the Securities and Exchange Commission.
  
           8.2.6  Representations and Warranties True. The representations and
  warranties of ECHO as set forth in Article Iv shall be true in all material
  respects as of the date of Closing.
  
  
                                         IX
                                       CLOSING
  
       9.1  Date of Closing. The closing of the transactions contemplated by
  this Agreement ("Closing") shall take place on April 20, 1999 at 12:00
  o'clock, at the offices of Magic located at the address Set forth at the end
  of this Agreement, or at such other date, time and place as ECHO, Magic and
  Selling Shareholders holding a majority of the Magic Shares may agree in
  writing.
  
       9.2 Documents to be Delivered At Closing. At the Closing, the parties
  shall deliver the following.
  
     (1)  Each of the Selling Shareholders shall deliver to ECHO:
  
        (A)  Certificates for Magic Shares as provided in this Agreement, duly
        endorsed to transfer all right, title and interest in such Shares to
        ECHO along with such other documents as ECHO shall reasonably request to
        ensure the transfer to ECHO of all such right, title and interest,
        totaling all of the Magic Shares.
  
        (B)   An executed copy of the Escrow Agreement.
  
        (C)   An executed copy of this Agreement, if not previously delivered.
  
        (D)   Completed and executed Investor Representations, if not previously
        delivered.
  
  
     (2) ECHO shall deliver
  
        (A)  Certificates for the number of Basic Shares issued to each Selling
        Shareholder, to the Escrow Agent in accordance with the Escrow
        Agreement.
  
        (B)  An executed copy of the Employment Agreement, to Kris D. Winckler,
        Steven D. Kirk, Robert L. Hare, and    Steven J. Freed, respectively.
  
        (C)  An executed copy of the Escrow Agreement, to each Selling
        Shareholder.
  
        (D)  An executed copy of this Agreement, to each Selling Shareholder, if
        not previously delivered.
  
     (3)  Magic shall deliver to ECHO
  
        (A)  Employment, Nondisclosure and Inventions Disclaimer Agreements as
        provided in Section 8.1.9.
  
        (B)  Resignations signed by each director and officer of Magic as
        provided in Section 8.1.10.
  
        (C)  An executed copy of the Escrow Agreement.
  
        (D)  Executed copies of Employment Agreements with Kris D.
        Winckler, Steven D. Kirk, Robert L. Hare, and Steven J. Freed.
  
        (E)  An executed copy of this Agreement, if not previously delivered.
  
        (F)  Articles of Merger, signed by the President and Secretary of Magic.
  
     (4)  EAC shall deliver to Magic and to the Selling Shareholders:
  
        (A)  Copies of resolutions adopted by the board of directors of EAC
        approving this Agreement and the Merger, certified by the President and
        the Secretary of EAC.
  
        (B)  Copies of resolutions adopted by the shareholder of EAC approving
        this Agreement and the Merger, certified by the President and the
        Secretary of Magic.
  
        (C)  Articles of Merger, signed by the President and the Secretary of
        EAC.
  
     (5)  Kris D. Winckler, Steven D. Kirk, Robert L. Hare, and Steven J. Freed  
     shall each deliver an executed copy of his Employment Agreement, to ECHO.
  
  
                                      ARTICLE X
                              MISCELLANEOUS PROVISIONS
  
       10.1  Governing Law. This Agreement was made in and shall be governed in
  all respects by the laws of the State of California, except that the laws of
  New Mexico shall govern the Merger.
  
       10.2  Survival. The representations, warranties, covenants and agreements
  made herein shall not be waived or affected by any investigation by any party
  and shall survive the closing of the transactions contemplated hereby.
  
       10.3  Successors and Assigns. The provisions of this Agreement shall
  inure to the benefit of, and shall be binding upon, the successors, assigns,
  heirs, executors and administrators of the parties hereto.
  
       10.4  Entire Agreement. This Agreement and the other documents delivered
  pursuant hereto constitute the full and entire understanding and agreement
  between the parties with regard to the subject matter hereof
  
       10.5  Amendments. Any amendment or modification to this Agreement must be
  in writing signed by all of the parties.
  
       10.6  Notices. All notices required or permitted hereunder shall be in
  writing and shall be mailed by registered or certified mall, postage prepaid,
  or otherwise delivered by hand or by messenger, addressed to each party at the
  address set forth at the end of this Agreement, or at such other address as
  the party shall have furnished by notice hereunder.
  
       10.7  Expenses. Each party shall bear its own expenses, including legal
  fees, incurred on its behalf with respect to this Agreement and the
  transactions contemplated hereby.
  
       10.8  Counterparts. This Agreement may be executed in any number of
  counterparts, each of which shall be an original, and each of which shall be
  enforceable against the parties actually executing such counterpart, and all
  of which together shall constitute one instrument.
  
       10.9  Headings. The headings in this Agreement are for convenience of
  reference only and are not to be considered in construing this Agreement.
  
       10.10 Waivers. Any waiver of any breach or default under this Agreement,
  or any waiver of any provisions or conditions of this Agreement, must be in
  writing and shall be effective only to the extent specifically set forth in
  such writing.
  
       10.11 Severability. In the event that any provision of this Agreement
  becomes or is declared by a court of competent jurisdiction to be illegal,
  unenforceable or void, this Agreement shall continue in full force and effect
  without said provision; provided that no such severability shall be effective
  if it materially changes the economic benefit of this Agreement to any party.
  
       10.12  Attorneys Fees. If legal or other proceedings are instituted by
  any party against any other party to enforce any provision of this Agreement,
  the prevailing party shall be entitled to recover reasonable attorneys' fees,
  court costs and ancillary expenses.
  
       10.13  Assumption of Liabilities. ECHO assumes and agrees to pay amounts
  owing to Lila Hare and Debra Kirk, aggregating $53,536.60 on or before April
  1, 2000. ECHO will hold harmless Magic and the Selling Shareholders from any
  liability in connection therewith.
  
       10.14  Certain Magic Liabilities. ECHO will hold harmless Magic and
  Selling Shareholders from any liability in connection with Magic's office
  lease and its equipment loan from First Security Bank and will endeavor to get
  Selling Shareholders released from their personal guarantee of the office
  lease and equipment loan.
  
       10.15  ECHO Funding Commitment. In the event that ECHO falls to provide
  funding in at least the amounts and on or before the times set forth in
  Exhibit L, all unearned Performance Shares shall immediately vest.
  
       10.16  Selling Shareholders' Spousal Indemnity and Representations. Each
  of the Selling Shareholders will indemnify and hold harmless ECHO, its
  successors and assigns, against all liabilities, all defects in title to Magic
  Shares transferred to ECHO pursuant to this Agreement, and all related costs
  and expenses, arising out of any claim by the spouse of the Selling
  Shareholder based on marital rights of the spouse in such Magic Shares. Kris
  D. Winckler and Steven Kirk each represents that the person signing along with
  that Selling Shareholder below is the spouse of that Selling Shareholder.
  Robert L. Hare and Steven I. Freed each represents that he is not married as
  of the date of Closing. Robert Moller and Lisa Moller represent that they are
  spouses and co-owners of the Magic Shares indicated opposite their names.
  
       10.17  Further Action. Each party agrees to execute and deliver such
  documents and to take such further action after Closing as may be necessary or
  appropriate to effect the Merger and the other provisions of this Agreement.
  
       10.18  Counterparts. This Agreement may be executed in two or more
  counterparts, each of which shall be deemed an original, but all of which
  together shall constitute one and the same instrument.
  
  
  
                                     ARTICLE XI
                            SIGNATURES AND SHARE AMOUNTS
  
       The parties hereto have evidenced their agreement to the provisions of
  this Agreement by their signatures subscribed below, it being understood that
  the Selling Shareholders hold the number of Magic Shares indicated, and the
  Selling Shareholders are entitled to receive the number of Base Shares
  indicated and up to the maximum number of Performance Shares indicated, in
  accordance with and subject to the terms of this Agreement.
  
       Each spouse signing below represents that she has read and understood
  this Agreement, she consents to its terms, and she releases and assigns any
  community property or other interest she may have in any of the Magic Shares
  to ECHO pursuant to this Agreement.
  
  "ECHO"                            "MAGIC"
  
  ELECTRONIC CLEARING HOUSE, INC.   MAGIC SOFTWARE DEVELOPMENT, INC.
  
  
  
  By:  Joel M. Barry,               By: Kris D. Winckler,
       Chairman and                     President and Chief
         Chief Executive Officer         Executive Officer
  
  28001 Dorothy Drive               215 Central Avenue N.W., Suite 3A
  Agoura Hills, CA 91301-2697       Albuquerque, NM 87102
  
  
  "EAC"
  
  ECHO ACQUISITION CORPORATION
  
  
  By: Joel M. Barry,
      Chairman and Chief Executive Officer
  
  28001 Dorothy Drive
  Agoura Hills, CA 91301-2697
  
  
  
  <TABLE>
  
  
  <CAPTION>
  
  
                                                    MAXIMUM
                                  MAGIC   BASE      PERFORMANCE
  SELLING SHAREHOLDERS            SHARES  SHARES    SHARES
  
  <S>                             <C>     <C>       <C>
  Kris Winckler                   25      250,000   250,000
  Patricia Winckler
  
  
  
  Steven D. Kirk                  25      250,000   250,000
  Debra Kirk
  
  
  
  Robert L. Hare                  25      250,000   250,000
  
  
  
  Steven J. Freed                 18      180,000   180,000
  
  
  
  Richard Moller                   7       70,000    70,000
  Lisa Moller
  
  /TABLE
  <PAGE>
                                                                     EXHIBIT 99.1
  
  
  
        FOR IMMEDIATE RELEASE
        April 29, 1999
  
  
                ECHO ANNOUNCES THE COMPLETION OF THE ACQUISITION OF 
                          MAGIC SOFTWARE DEVELOPMENT, INC.
  
        Agoura Hills, Calif.--Electronic Clearing House, Inc. (NASDAQ:ECHO)
  today announced the completion of the acquisition of Magic Software
  Development, Inc. (Magic).  ECHO had announced an agreement in principle on
  March 8, 1999 and final recording of the acquisition with the appropriate
  state agencies occurred on April 27, 1999. Magic, who will operate as a wholly
  owned subsidiary of ECHO, is based in Albuquerque, New Mexico, and is a
  provider of electronic check conversion, electronic check re-presentment,
  check verification, and check guarantee solutions to financial services
  companies and retailers across the nation.
        
        Under the terms of the acquisition, ECHO issued 1,000,000 shares of ECHO
  common stock.  The shares will be held in escrow and 500,000 shares will be
  released to the Magic selling shareholders on April 1, 2001 and 500,000 shares
  will be released on April 1, 2002.
        
        An additional 1,000,000 shares of ECHO stock will be placed into escrow
  to be issued to the Magic selling shareholders under a performance clause
  wherein, should the Magic subsidiary's performance meet or exceed
  predetermined earnings goals for fiscal year 2000 and 2001, a proportionate
  number of performance based shares will be issued. Any shares issued under the
  performance clause will be held in escrow and 50% will be released on April 1,
  2003 and the balance will be released on April 1, 2004.  
        
        Mr. Kris Winckler, President of Magic, will remain the President of the
  ECHO subsidiary and Mr. Dave Griffin, Vice President of ECHO, has been
  designated Director of Check Services and will assist in the integration of
  Magic products and services with the ECHO family of products and services. 
        
        "We believe it is logical for a merchant to expect their payments
  processor to provide a full complement of payment options and, with the
  addition of Magic, ECHO will be one of a select few processors in the nation
  who will have fully integrated credit card and check services", stated Joel M.
  Barry, CEO of ECHO.  "We intend to make both forms of payment available in
  real time over the internet, which will further distinguish ECHO from other
  less technically capable processors, and maximize the benefit to our growing
  internet base of merchants", stated Mr. Barry.     
        
        Magic has been an active member of the Electronic Check Counsel, a group
  of national retailers, banks and electronic processors, that was set up by the
  National Automated Clearing House Association (NACHA) to investigate and
  advise NACHA on new electronic check products.  "NACHA just announced its
  approval of new rules relating to electronic check conversion which will
  result in substantial cost savings for both retailers and financial
  institutions", said Kris Winckler, President of Magic. 
  
        In a check conversion transaction, the consumer presents a retail
  merchant with a check which is run through an electronic reader to capture the
  consumer's bank account number, routing information, and check serial number.
  The merchant then returns the check to the consumer with a "void" stamped on
  the check.  The consumer signs a receipt authorizing the electronic
  transaction and keeps a copy as a record of the purchase.  The merchant
  initiates an Automated Clearing House (ACH) debit, using the check information
  and transaction amount, which is processed electronically through the ACH
  network. The ACH Network is commonly used for payments such as Direct Deposit
  of payroll and Social Security benefits, and automated bill payments. In 1998,
  more than 5.3 billion ACH payments were made worth over $16 trillion.
        
        The benefits to retailers of using electronic checks at the point of
  sale include reduced costs from the elimination of paper handling, faster and
  more effective redeposit and return item processing, simplified
  reconciliation, detailed settlement and transaction reporting, improved
  customer information flow, and a lower incidence of fraud.
        
        "Magic is a leader in developing and deploying electronic check services
  and, with ECHO's background and capabilities in credit card and internet-based
  processing, the combined suite of services we will be able to offer to
  merchants should make ECHO a highly preferred processor with merchants across
  the nation", stated Winckler.                                       
        
        "The Magic team of programmers and engineers match well with ECHO's
  distinction as a technically competent company", stated Mr. Barry. "We think
  some innovative products and services, especially in the internet, will
  naturally result from this combination of talent."
        
        To take advantage of the new "safe harbor" provisions of the Private
  Securities Litigation Reform Act of 1995, you are hereby cautioned that this
  release contains forward-looking statements that are based upon current
  expectations and involve a number of risks and uncertainties.  Actual
  operations and results may differ materially from those expressed in the
  forward-looking statements made by the Company.
        
        Electronic Clearing House, Inc. provides credit card processing, check
  guarantee, inventory tracking services and various Internet services to over
  19,000 retail merchants and U-Haul dealers across the nation.  ECHO also
  designs, develops and manufactures software and point-of-sale hardware that is
  utilized as credit card processing terminals, automated money order
  dispensers, inventory tracking devices, and casino cash advance systems.
  
                               #          #          #
  
  Media Contact:
  Donna Camras, Corporate Secretary                  URL: http://www.echo-inc.com
  818-706-8999, ext. 3033                               E-MAIL: corp@echo-inc.com
  Electronic Clearing House, Inc.
  Agoura Hills, Calif.
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 76462}]
metadata_filer: {"company-data": {"conformed-name": "ELECTRONIC CLEARING HOUSE INC", "cik": "0000721773", "assigned-sic": "6099", "irs-number": "930946274", "state-of-incorporation": "NV", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-15245", "film-number": "99617055"}, "business-address": {"street1": "28001 DOROTHY DR", "city": "AGOURA HILLS", "state": "CA", "zip": "91301-2697", "phone": "8187068999"}, "mail-address": {"street1": "28001 DOROTHY DRIVE", "city": "AGOURA HILLS", "state": "CA", "zip": "91301"}, "former-company": {"former-conformed-name": "BIO RECOVERY TECHNOLOGY INC", "date-changed": "19860122"}}
text: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C.  20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
                       Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported) April 27, 1999
  
                          ELECTRONIC CLEARING HOUSE, INC.                     
               (Exact name of registrant as specified in its charter)
  
  NEVADA                            0-15245                 93-0946274     
  (State or other jurisdiction    (Commission              (IRS Employer
      of incorporation)            File Number)             Identification       
                                                               No.)
  
  28001 Dorothy Drive, Agoura Hills, California            91301              
  (Address of principal executive offices)                (Zip Code)
  
          Registrant's telephone number, including area code (818) 706-8999
  
                                                                                 
            (Former name or former address, if changes since last report)
  
  ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
  
       On April 27, 1999, Electronic Clearing House, Inc., a Nevada corporation
  ("ECHO"), acquired Magic Software Development, Inc. ("Magic"), a New Mexico
  corporation, through a merger (the "Merger") of ECHO's wholly-owned
  subsidiary, ECHO Acquisition Corporation, a New Mexico corporation ("EAC"),
  with and into Magic.  The Merger was consumated on the terms set forth in an
  Agreement and Plan of Reorganization dated April 20, 1999, by and among ECHO,
  EAC and Magic (the "Merger Agreement"), attached hereto as Exhibit 2.1. As a
  result of the Merger, Magic is now a wholly-owned subsidiary of ECHO.
  
       Magic is a provider of electronic check verification, electronic check
  re-presentment, check conversion, and check guarantee solutions to financial
  services companies and retailers across the nation.  Magic processes over 75
  million check verification transactions per year, totaling over two billion
  dollars.  Magic currently employs 13 full-time employees, primarily
  programmers and engineers.
  
       At the present, a majority of Magic's revenue is generated from
  electronic check verification.  Electronic check verification is the process
  of using an electronic device to verify information about a check being
  presented for payment.  The information is verified against data, which have
  previously been collected and stored in a database.  A verification compares
  information to a negative database, a positive database, or combination of
  both.  ECHO intends to offer all of the services and products of Magic to its
  core merchant base once Magic is fully integrated into ECHO's operations.
  
       Pursuant to the Merger Agreement, ECHO issued a total of 1,000,000 shares
  of common stock ("Base Shares") to the selling shareholders of Magic.  The
  Base Shares are to be held in escrow, and 500,000 shares will be released to
  the selling shareholders of Magic on April 1, 2001 and 500,000 shares will be
  released on April 1, 2002.  In addition, up to 1,000,000 shares of common
  stock ("Performance Shares") will be issued to the Magic selling shareholders
  upon the achievement of certain predetermined earnings goals for fiscal year
  2000 and 2001.  Any Performance Shares issued will be held in escrow and 50%
  will be released on April 1, 2003 and the balance to be released on April 1,
  2004.  The  Merger is being accounted for as a purchase, not a pooling of
  interests.
  
       All liabilities and expenses paid by ECHO in connection with the Merger
  were funded from ECHO's working capital.  ECHO expects its operating results
  to be adversely affected in the first year as a result of the Merger.
  
       The description of the Merger contained herein is qualified in its
  entirety by reference to the Merger Agreement and the Press Releases issued by
  ECHO dated April 20, 1999, and April 29, 1999, copies of which are filed
  herewith and incorporated herein by reference as Exhibits 2.1 and 99.1
  respectively.
  
  ITEM 7.  FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
  
       (a)  FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.  Financial statements
            of the business acquired, prepared pursuant to Rule 3-05 of
            Regulation S-X, are unavailable as of the date of this filing.  Such
            information will be filed on or before July 9, 1999.
  
       (b)  PRO FORMA FINANCIAL INFORMATION.  Pro Forma financial information
            required pursuant to Article 11 of Regulation S-X is unavailable as
            of the date of this filing.  Such information will be filed on or
            before July 9, 1999. 
  
       (c)  EXHIBITS:
          
            Exhibit
            Number         Description of Document
  
              2.1          Merger Agreement and Plan of Reorganization, dated 
                           April 20, 1999, by and among ECHO, EAC and Magic
                                     
             99.1          Press Release, dated April 29, 1999
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                                ELECTRONIC CLEARING HOUSE, INC.
                                       (Registrant)
  
                                By:                                       
                                     Alice L. Cheung, Treasurer & 
                                       Chief Financial Officer
  
  Dated:  May 11, 1999
  EXHIBIT 2.1
  
                     MERGER AGREEMENT AND PLAN OF REORGANIZATION
  
  This Merger Agreement and Plan of Reorganization ("Agreement") is made as of
  the 20th day of April, 1999 by and among Electronic Clearing House, Inc., a
  Nevada corporation ("ECHO"), ECHO Acquisition Corporation, a New Mexico
  corporation ("EAC"), Magic Software Development, Inc., a New Mexico
  corporation ("Magic"), and the individuals listed and signing at the end of
  this Agreement in Article XI ("Selling Shareholders").
  
  WHEREAS the Selling Shareholders own all of the right, title and interest in
  all of the outstanding shares of capital stock of Magic ("Magic Shares") as
  set forth in Article XI;
  
  WHEREAS EAC desires to merge into Magic and Magic desires to merge with EAC as
  set forth in this Agreement ("Merger");
  
  WHEREAS Selling Shareholders approve the Merger and desire to receive shares
  of ECHO in connection with the Merger;
  
  WHEREAS ECHO is wiling to issue up to 2,000,000 shares of the common capital
  stock of ECHO in connection with the Merger ("ECHO Shares");
  
  WHEREAS Magic would become a wholly-owned subsidiary of ECHO as a result of
  the Merger;
  
  NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS SET FORTH HEREIN, THE
  PARTIES AGREE AS FOLLOWS:
  
                                          I
                                TERMS OF TRANSACTION
  
  1.1      Merger and Effect of Merger.
  
           1.1.1.     Merger of EAC and Magic. EAC will be merged with and into
  Magic effective on date that Articles of Merger in the form attached to this
  Agreement as Exhibit Al are filed with the New Mexico Secretary of State
  ("Effective Date").
  
           1.1.2.     Magic Surviving Corporation. Magic will be the surviving
  corporation in the Merger. After the Effective Date, Magic's corporate name,
  existence and all its purposes, powers and objectives will continue unaffected
  and unimpaired by the Merger, Magic will continue to be governed by the laws
  of the state of New Mexico, and Magic will succeed to EAC's rights, assets,
  liabilities and obligations in accordance with the Business Corporation Act of
  New Mexico.
  
           1.1.3.     Articles of Incorporation. No changes in the Articles of
  Incorporation of Magic will be effected by the Merger. The Articles of
  Incorporation of Magic on the Effective Date will continue to be the Articles
  of Incorporation of Magic after the Effective Date. From and after the
  Effective Date, said Articles of incorporation, as they may be amended from
  time to time, will be, and may be separately certified as, the Articles of
  Incorporation of Magic
  
          1.1.4  Bylaws. The Bylaws of Magic in effect on the Effective Date
  shall be the Bylaws of Magic after the Effective Date until those bylaws are
  duly altered, amended or repealed.
  
          1.1.5  Directors. The Directors of Magic on the Effective Date will be
  the Directors of Magic after the Effective Date until their successors are
  duly elected and qualify. The officers of Magic on the effective date shall be
  the officers of Magic after the effective date, subject to the terms of this
  Agreement.
  
          1.1.6  Conversion of EAC Shares. Effective on the Merger, each share
  of EAC at the time issued and outstanding will be converted into one share of
  the common capital stock of Magic.
  
          1.1.7  Conversion of Magic Shares. Effective on the Merger, all of the
  shares of Magic at the time issued and outstanding (other than dissenting
  shares to the extent provided in the Business Corporation Act) will by virtue
  of the Merger and without action on the part of any shareholder of Magic be
  converted into the right to receive ECHO Shares as provided in this Agreement.
  
          1.1.6  Tax-Free Reorganization. The Merger is intended by ECHO, EAC,
  Magic and the Selling Shareholders to be a tax-free reorganization as defined
  in Section 368(a)(l)(A) of the Internal Revenue Code of 1986, as amended
  ("Code") (it being understood that no representation or warranty as to such
  effect is or has been made); and this Agreement is intended to be a, Plan of
  Reorganization under that Section.
  
  1.2     Base Shares
  
          1.2.1    Issuance of Base Shares to Selling Shareholders at the
  Effective Date.  Upon effectiveness of the Merger, ECHO will issue to each of
  the Selling Shareholders the number of ECHO Shares set forth opposite that
  Selling Shareholders  name in Article XI as "Base Shares," aggregating a total
  of 1,000,000 Base Shares, subject to the terms of this Agreement.
  
          1.2.2  Escrow of Base Shares.Certificates representing the Base Shares
  shall be delivered to the Secretary of ECHO, to be held in escrow in
  accordance with an escrow agreement containing the terms set forth in the form
  of escrow agreement attached to this Agreement as Exhibit A2 ("Escrow
  Agreement"). Subject to the terms of the Escrow Agreement, certificates for
  500,000 Base Shares shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2001; and certificates for the remaining
  500,000 Base Shares shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2002. Base Shares reflected in certificates
  held in escrow cannot be transferred or otherwise alienated until released
  from escrow except as provided in this Agreement.
  
  1.3     Performance Shares.
  
          1.3.1. Issuance of Performance Shares to Selling Shareholders On
  Achievement of Performance Goals. As of the last day of Performance Period # 1
  (April 1, 1999 through March 31, 2001) and Performance Period #2 (April 1,
  2001 through March 31, 2002). ECHO will issue to each of the Selling
  Shareholders the number of ECHO Shares to which that Selling Shareholder shall
  be entitled pursuant to this Section 1.3.1, up to the total number of Shares
  set forth opposite that Selling Shareholder's name in Article XI as
  "Performance Shares," aggregating up to a maximum of 1,000,000 Performance
  Shares, subject to the terms of this Agreement.
  
       The number of Performance Shares that shall be issued under this Section
  1.3.1 Is based on Net Earnings accrued during Performance Period #1 and
  Performance Period #2.
  
       Net Earnings shall be net earnings before taxes as reflected on the
  income statement of Magic for the applicable Performance Period, calculated in
  accordance with generally accepted accounting principles. Net earnings shall
  reflect deductions for administrative charges of ECHO in accordance with
  ECHO's good faith general policy for allocating administrative charges to
  subsidiaries. ECHO's current policy for allocating administrative charges is
  set forth in Exhibit B.
  
       In the event of a merger of ECHO or Magic with another company (other
  than the Merger contemplated by this Agreement), whether ECHO or Magic is the
  surviving company or absorbed company, or the acquisition of 50 percent of the
  outstanding shares of ECHO or Magic by another company or other person or
  group of persons in the same transaction or series of related transactions
  prior to the end of any Performance Period, Net Earnings shall be the Net
  Earnings calculated as previously described divided by two (2) in respect to
  the period from the closing of such transaction or series of related
  transactions until the end of Performance Period #2.
  
       Performance Period #1 shall commence on April 1, 1999 and shall terminate
  on March 31, 2001.
  
       For Performance Period #1, Performance Shares shall be issued in
  accordance with the following:
  
                                    Number of
        Net Earnings                Performance Shares
  
        Less than $250,000          None
        $250,000 or more            250,000 plus one Performance Share
                                    for each $1.00 by which Net Earnings
                                    exceed $250,000, up to the maximum
                                    of 1,000,000 Performance Shares
  
       Performance Period #2 shall commence on April 1, 2001 and shall terminate
  on March 31, 2002. For Performance Period #2, Performance Shares shall be that
  percentage of the Remaining Shares (as defined hereinafter) represented by the
  ratio: (1) the amount by which Net Earnings for Performance Period #2 exceeds
  $1,000,000, up to a maximum of $1,000,000; divided by (2) $1,000,000. Thus, if
  500,000 shares are issued in respect to Performance Period #1 (resulting in
  500,000 Remaining Shares) and Net Earnings for Performance Period #2 were
  $1,600,000, then 300,000 shares would be issued in respect to Performance
  Period #2; that is $1,600,000 - $1,000,000 = $600,000, $600,000/$1,000,000 =
   .60, .60 x 500,000 = 300,000. "Remaining Shares" means 1,000,000 Performance
  Shares less the number of Performance Shares issued with respect to
  Performance Period #1.
  
       Each Selling Shareholder shall be entitled to receive that percentage of
  the aggregate number of Performance Shares issued as is pro rata to the number
  of Magic Shares held by that Shareholder immediately prior to Closing.
  
       Fractional shares shall not be issued. Any fraction of a share shall be
  rounded up to 1 share.
  
       The number of Performance Shares to be issued hereunder shall be
  appropriately adjusted to reflect any stock split, stock dividend, stock
  combination or similar transaction effected without additional payment for
  shares. The foregoing shall not apply to any conversion of convertible
  securities or any issue of securities on exercise of warrants or options to
  purchase such securities.
  
        1.3.2 Escrow of Performance Shares. Certificates for Performance Shares
  shall be delivered to the Secretary of ECHO immediately on issue, to be held
  in escrow in accordance with the Escrow Agreement. Subject to the terms of the
  Escrow Agreement, certificates for fifty percent (50%) of the aggregate number
  of Performance Shares that shall have been issued with respect to Performance
  Periods #1 and #2 shall be released from the escrow and delivered to the
  Selling Shareholders on April 1, 2003; and certificates for the remaining
  fifty percent (50%) of the Performance Shares that shall have been so issued
  shall be released from the escrow and delivered to the Selling Shareholders on
  April 1, 2004. Thus, if 500,000 Performance Shares are issued with respect to
  Performance Period #1 ending March 31, 200 1, and 300,000 Performance Shares
  are issued with respect to Performance Period #2 ending March 31, 2002,
  aggregating 800,000 Performance Shares, certificates for 400,000 of those
  Performance Shares will be released from the escrow on April 1, 2003 and
  certificates for 400,000 of those Performance Shares will be released from the
  escrow on April 1, 2004.
  
       Performance Shares reflected in certificates held in escrow cannot be
  transferred or otherwise alienated until released from escrow, except as
  provided in this Agreement.
  
        1.4 Shareholder Rights. Subject to the terms of the Escrow Agreement,
  Selling Shareholders shall have all of the rights of Shareholders with respect
  to Base Shares and Performance Shares upon issuance thereof, except the right
  to assign or transfer those Shares while such Shares are held in the escrow
  subject to the terms of this Agreement.
  
        1.5 Allocation of Base Shares. For ECHO tax and accounting purposes, the
  parties intend that all Base Shares issued to Selling Shareholders shall be
  allocated in respect to Magic tangible assets at book value of those tangible
  assets and in respect to Magic intangible assets at fair market value of those
  intangible assets.
  
        1.6 Limited Right to Transfer. Notwithstanding any other provision of
  this Agreement, Selling Shareholders shall have the right to transfer ECHO
  Shares to any person, provided that: (1) the transfer does not violate any
  federal or state securities law or other law, (2) the transferee agrees to be
  bound by all of the terms of the Escrow Agreement, (3) the Selling
  Shareholders assume all tax liabilities arising out of the transfer; and (4)
  the Selling Shareholders indemnify ECHO against any claim and/or liability
  arising out of such transfer.
  
                                         II
                                   MAGIC EMPLOYEES
  
       2.1  Kris D. Winckler. Effective as of the Effective Date ECHO agrees to
  cause Magic to employ Kris D. Winckler in the position of President, upon the
  terms and conditions set forth in Exhibit Cl to this Agreement.
  
       2.2  Steven D. Kirk. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Steven D. Kirk in the position of Vice President-Sales,
  upon the terms and conditions set forth in Exhibit C2 to this Agreement.
  
       2.3  Robert L. Hare. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Robert L. Hare in the position of Vice President-
  Development, upon the terms and conditions set forth in Exhibit C3 to this
  Agreement.
  
       2.4  Steven J. Freed. Effective as of the Effective Date, ECHO agrees to
  cause Magic to employ Steven J. Freed in the position of Vice President-
  Operations, upon the terms and conditions set forth in Exhibit C4 to this
  Agreement.
  
       2.5  Other Employees. ECHO and Kris D. Winckler will determine whether
  employees of Magic other than those referred to in Sections 2.1 through 2.4
  shall be retained as employees of Magic. Any retention of those employees will
  be on an "at-will" basis, unless ECHO agrees otherwise. There are no
  assurances that those employees will be retained for any period of time after
  the Effective Date, and any or all of such employees may be terminated at any
  time for any reason or no reason.
  
                                         III
                          REPRESENTATIONS AND WARRANTIES OF
                           MAGIC AND SELLING SHAREHOLDERS
  
       Magic and the Selling Shareholders jointly and severally represent and
  warrant to ECHO as of the date of this Agreement and as of the Effective Date
  as follows, except as set forth in Exhibit D:
  
       3.1 Organization and Standing: Authority. Magic is a corporation duly
  organized, validly existing, and in good standing under the laws of New
  Mexico. Magic has the requisite corporate power and authority to own, lease
  and operate its properties and assets, and to carry on its business as
  presently conducted and as proposed to be conducted and to enter into this
  Agreement. All corporate action on the part of Magic, its shareholders,
  directors and officers necessary for the authorization, execution, delivery
  and performance of this Agreement by Magic has been taken or will be taken
  prior to the Closing. This Agreement, when executed and delivered, is a valid
  and binding obligation of Magic and each of the Selling Shareholders, and will
  not violate the Articles of incorporation or bylaws of Magic or any agreement,
  law, regulation, government order or other obligation under which Magic or any
  of the Selling Shareholders is bound. Magic is duly qualified as a foreign
  corporation to do business and is in good standing in each jurisdiction where
  the character of its properties owned or held under lease or the nature of its
  activities makes such qualification necessary, except where failure to be so
  qualified will not have an effect on the business, properties, assets,
  condition (financial or otherwise), liabilities, operations or prospects of
  Magic taken as a whole in an amount in excess of $10,000 ("Material Adverse
  Effect").
  
       3.2 Corporate Documents. Magic has delivered to ECHO true copies of its
  Articles of Incorporation and its bylaws as currently in effect, all stock
  records, and all minutes of meetings and all consents and other actions of its
  shareholders, board of directors, executive committee, and other governing
  boards. There shall have been no changes to these documents at the time of the
  Effective Date. Magic is in full compliance with all provisions of such
  documents.
  
       3.3 Bank Statements. Magic has delivered statements of all banks and
  other institutions at which it maintains funds for each of the three preceding
  months. Magic does not maintain funds at any institution other than those for
  which statements have been delivered hereunder.
  
       3.4 Subsidiaries. Magic has no subsidiaries or affiliated companies and
  does not otherwise own or control, directly or indirectly, any other
  corporation, association or business entity.
  
       3.5 Capitalization. The authorized capital stock of the Magic consists
  10,000 shares of Common Stock, of which 100 shares are issued and outstanding.
  All issued and outstanding shares have been duly authorized and validly
  issued, and are fully-paid and nonassessable. There are no outstanding
  options, warrants, conversion privileges or other rights presently outstanding
  to purchase or otherwise acquire any authorized but unissued shares of capital
  stock or other securities of Magic, nor any agreements to issue any such
  rights. All outstanding capital stock was issued in full compliance with all
  applicable laws. There are no bonds, debentures, notes or other evidences of
  indebtedness having the right to vote on any matter.
  
       3.6 Financial Statements. Magic has delivered to ECHO a balance sheet and
  income statement for each of the fiscal years ended December 31, 1994, 1995,
  1996, 1997, and 1998, prepared in accordance with generally accepted
  accounting principles. The balance sheet and income statement for the fiscal
  year ended December 31, 1998 has been audited by a firm of public accountants
  acceptable to ECHO. The balance sheets fairly present the assets, liabilities,
  and financial condition of Magic as of the dates presented and the income
  statements fairly present the results of operations of Magic for the periods
  therein referred to. To the best of Magic's and each Selling Shareholder's
  knowledge, there have been no material changes in any asset or liability
  reflected in the most recent such balance sheet after the date of that balance
  sheet. Magic has not sold, exchanged or otherwise disposed of any of its
  assets or rights, other than in the ordinary course of business.
  
        3.7 Liabilities. To the best of Magic's and each Selling Shareholder's
  knowledge, other than as disclosed in the most recent balance sheet or other
  document delivered to ECHO, Magic has no direct or contingent liabilities. 
  There are no known or expected actions, suits, proceedings or investigations
  pending against Magic or its properties before any court, governmental agency,
  or other tribunal, domestic or foreign. No known claims against Magic or any
  of its shareholders, directors, officers, employees, agents or consultants
  have been asserted claiming any rights to any tangible or intangible property
  owned, claimed or used by Magic, or claiming that the business of Magic
  violates any patent, trade secret, or other right of any person including any
  former or other present employer of any such guarantor, surety, co-signer,
  endorser or co-maker with respect to the liability of any other person. Magic
  has not declared or paid any dividends, or authorized or made any distribution
  upon or with respect to any class or series of its capital stock. Magic has
  given no power of attorney to any person.
  
        3.8 Intangible Assets. A list of all intangible assets, including
  without limitation all concepts, designs, ideas, methods, computer programs,
  systems, patents, trade secrets, trademarks, trade names and copyrights, is
  set forth in Exhibit E. Developing, marketing, assigning or transferring, or
  other use of any such intangible asset after the Effective Date will not
  infringe the rights of any other person. Magic possess sufficient legal rights
  to all intangible assets necessary for the conduct of Magic's business as now
  conducted and as proposed to be conducted. Without limiting the foregoing,
  Magic has not entered into any cross-licensing arrangement with any person or
  entity, and there are no agreements relating to and materially affecting any
  intangible asset or the use or ownership thereof, including without limitation
  license agreements, confidentiality or non-disclosure agreements, assignments
  or agreements to assign, development agreements, settlement agreements or
  similar agreements.  None of the Selling Shareholders, and to the best of
  Magic's and each Selling Shareholder's knowledge no other person who is an
  employee of Magic, is obligated under any agreement or subject to any
  judgment, decree or order of any court or administrative agency that would
  interfere with such person's duties with Magic or that would conflict with
  Magic's business as presently proposed to be conducted. Magic will not need to
  utilize any inventions, trade secrets or proprietary information of any of its
  employees or shareholders made prior to their employment by Magic, except for
  inventions, trade secrets or proprietary information that have been assigned
  to Magic (copies of all such assignments having been delivered to ECHO). 
  Neither Magic nor any Selling Shareholder has received information that any
  other person is engaged in any activity or contemplating any activity that
  might constitute an infringement or other violation of Magic's rights with
  regard to any of its intangible assets.
  
       3.9 Agreements and Licenses. All oral and written agreements, including
  without limitation all licenses, to which Magic is a party or under which it
  is bound are listed in Exhibit F. All such agreements and licenses have been
  delivered to ECHO. All such agreements and licenses are valid, binding and
  enforceable in accordance with their terms. Magic is not in default or breach
  of any such agreement or license. Execution and performance of this Agreement
  will not violate or breach any such agreement or license. Without limiting the
  generality of the foregoing, no warranty or representation has been made to
  any customer of Magic other than as set forth in written agreements with such
  customer, all of which are listed in Exhibit F.
  
       3.10 Title to Properties. Magic has good and marketable title to all its
  properties and assets, including leasehold interests, trade secrets,
  trademarks, copyrights, patents, software, systems and other intangible
  assets. Magic's tide to its properties and assets is free and clear of any
  lien, claim, encumbrance or restriction of any nature. In particular, without
  limiting the generality of the foregoing, no person has any claim, lien or
  other rights in or against any intellectual property or other intangible asset
  of Magic including without limitation any of Magic's software programs except
  pursuant to written license agreements all of which are listed in Exhibit F.
  To the best of Magic's and each Selling Shareholder's knowledge, there are no
  pending or threatened proceedings of any nature alleging any violation of any
  right of any other person with respect to any of Magic's properties or assets.
  
       3.11 Accounts Receivable and other Receivables. To the best of Magic's
  and each Selling Shareholder's knowledge, all accounts receivable are current
  and collectible in the ordinary course of business Magic has not made any
  loans or advances to any person, other than in the ordinary course of
  business.
  
       3.12  Insurance. All policies of insurance owned or held by Magic are
  listed in Exhibit G. All such policies are in full force and effect, and will
  not be affected by the transactions contemplated by this Agreement.
  
       3.13  Leases. All leases under which Magic is bound are listed in Exhibit
  H. All such leases are in full force and effect, and will not be affected by
  the transactions contemplated by this Agreement. Magic is not in default or
  breach of any lease.
  
       3.14  Employees. Magic has no (a) retirement, pension, profit sharing,
  deferred compensation, bonus, or other compensation plan, other than regular
  salaries and wages, (0) stock option, stock purchase or other employee stock
  or equity plan, (c) medical or disability plan, (d) other employee benefit
  plan, (e) employment agreement of any kind. To the best of Magic's and the
  Selling Shareholder's knowledge, no director, officer or employee is obligated
  under any contract, license, covenant, commitment or other agreement, or
  subject to any judgment, decree, or other order that would conflict with his
  or her obligation to use his or her best efforts to promote the interests of
  Magic. Except as provided in this Agreement, no employee of Magic has been
  granted the right to continued employment by Magic or to any material
  compensation following termination of employment by Magic or consummation of
  the transactions contemplated by this Agreement. Neither Magic nor any Selling
  Shareholder is aware that any officer or employee intends to terminate his or
  her employment with Magic.
  
       3.15 Taxes. All tax liabilities of any nature incurred by Magic have been
  paid. To the best of Magic's and each Selling Shareholder's knowledge, no
  facts exist that would be grounds for the assessment of any additional tax
  liability. All required tax returns of Magic have been accurately prepared and
  duly and timely filed. Magic has not been advised that any of its returns,
  federal, state or other, have been or are being audited.
  
       3.16 Compliance with Law.  To the best of Magic's and each Selling
  Shareholder's knowledge, Magic is in full compliance with all laws and
  regulations applicable to its business, and all judgments, decrees, orders,
  and writs to which Magic is subject (copies of all of which have been
  delivered to ECHO). To the best of Magic's and each Selling Shareholder's
  knowledge, Magic possesses from the appropriate governmental authorities, all
  licenses, permits, certificates, approvals, franchises and other
  authorizations as are necessary for Magic to engage in the business currently
  conducted.
  
       3.17  Governmental Consent. To the best of Magic's and each Selling
  Shareholder's knowledge, after consultation with legal counsel, no consent,
  approval or authorization of or designation, declaration or filing with any
  governmental authority on the part of Magic or the Selling Shareholders is
  required in connection with the valid execution and delivery of this Agreement
  or the consummation of any other transaction contemplated hereby except filing
  Articles of Merger as provided in Section 1.1.
  
       3.18 Investment Intent. Each of the Selling Shareholders will acquire the
  ECHO Shares to be issued to that Shareholder pursuant to this Agreement for
  investment for his own account, not as a nominee or agent, and not with a view
  to or for sale in connection with any distribution of the ECHO Shares, or any
  part thereof; he has no present intention of selling, granting participation
  in' or otherwise distributing the ECHO Shares.
  
       3.19 No Registration of ECHO Shares. Each of the Selling Shareholders
  understands that the ECHO Shares have not been registered under the Securities
  Act of 1933 ("Securities Act") nor registered or qualified under the New
  Mexico Securities Act, the Washington Securities Act including Chapter 21.20
  of the Revised Code of Washington ("RCW"), nor other applicable securities
  law, on the basis that the sale provided for in this Agreement and the
  issuance of securities hereunder is exempt from registration under the
  Securities Act and from registration or qualification under applicable
  securities laws, and that ECHO's reliance on such exemptions is predicated on
  the representations set forth herein. in this connection, each of the Selling
  Shareholders understands that the offering of ECHO Shares contemplated by this
  Agreement and related documents and disclosures have not been reviewed or
  recommended by the U.S. Securities and Exchange Commission ("SEC") nor by the
  securities administrator of New Mexico, Washington or any other state or
  jurisdiction. Therefore, ECHO Shares cannot be resold unless registered under
  the Securities Act, and registered or qualified under any applicable state
  securities law including without limitation the Securities Act of Washington
  Chapter 21.20 RCW and the Securities Act of New Mexico, or unless an exemption
  from registration is available.
  
       3.20 Restrictions on Transfer. Each of the Selling Shareholders
  understands that the ECHO Shares cannot be sold or transferred unless
  registered under the Securities Act of 1933 and registered or qualified under
  applicable state or other securities laws, or an exemption applies.
  
       3.21 Knowledge of Business/Ability to Bear Economic Risk. Each of the
  Selling Shareholders is familiar with the business of ECHO, and has received
  each of the following: (1) ECHO's 1998 Annual Report to Shareholders; (2) Form
  10-K for the Fiscal Year ended September 30, 1998; (3) Form 10-Q for period
  ended December 31, 1998; (4) Proxy Statement dated January 4, 1999. Each of
  the Selling Shareholders understands that he can request, and that ECHO will
  promptly provide to the Selling Shareholder on such request, any exhibit
  required to be filed with the Securities and Exchange Commission m connection
  the foregoing documents including the Exhibits referred to in Part IV of the
  aforementioned Form 10-K. Each of the Selling Shareholders is experienced in
  the type of business engaged in by ECHO, is able to fend for himself in the
  transactions contemplated by this Agreement, has such knowledge and experience
  in financial and business matters as to be capable of evaluating the merits
  and risks of investment in the ECHO Shares, and has the ability to bear the
  economic risks of the investment.
  
       3.22  Due Diligence. Each of the Selling Shareholders represents that he
  has had the opportunity to ask questions of; and to receive answers from, ECHO
  concerning the terms and conditions of his investment in the ECHO Shares and
  to obtain additional information (to the extent ECHO possessed such
  information or could acquire it without unreasonable effort or expense)
  necessary to verify the accuracy of any information furnished to him or to
  which he had access.
  
       3.23  Free of Liens and Encumbrances. The Magic Shares are validly
  issued, fully-paid and nonassessable, and are free of any liens, claims,
  encumbrances, or other restrictions of any kind.
  Neither the execution of this Agreement nor the transactions contemplated
  herein shall violate the Articles of incorporation or bylaws of Magic, any
  agreement, or any law, rule or order of any governmental authority or any
  court.
  
       3.24  Operation of Software and Systems. All data processing systems,
  including all software programs, of Magic operate normally in accordance with
  the specifications and functions for those systems and software programs
  previously disclosed to ECHO. Magic is making all such systems ready for the
  year 2000 and does not expect such systems to be adversely affected by the
  advent of that year. Except as stated in the first sentence of this Section
  324, neither Magic nor any of the Selling Shareholders is aware of any
  material defect in design, materials, manufacture, performance or otherwise in
  any products or services developed, manufactured, distributed, licensed, sold
  or provided by Magic since Magic's incorporation or any defect in repair to,
  service of; or replacement of; any such products which would give rise to a
  Material Adverse Effect.
  
       3.25  Suppliers and Customers. No substantial supplier or customer (who
  accounted for more than 2% of aggregate 1998 purchases or more than 2% of
  aggregate 1998 revenues, as the case may be) or any prospective customer, has
  indicated to Magic or to any Selling Shareholder that it intends to terminate
  its relationship with Magic, nor does Magic or any Selling Shareholder have
  knowledge that any such supplier or customer intends to terminate such
  relationship. There is no information that would indicate that Magic does not
  have good business relations with each supplier and customer, or that
  consummation of the transactions contemplated by this Agreement would or might
  disrupt Magic's existing relationships with any such supplier or customer.
  
       3.26  Records. Magic has made available all of its records to ECHO in all
  media, including without limitation all financial records, product records,
  software code, written operating procedures, customer records, personnel
  records, and insurance records.
  
       3.27  No Material Adverse Effect. To the best of Magic's and each Selling
  Shareholder's knowledge, there does not exist any fact or circumstance which,
  alone or together with another fact of circumstance, could reasonably be
  expected to have a Material Adverse Effect on the business, properties,
  assets, condition (financial or otherwise), liabilities, operations,
  properties or future prospects of Magic.
  
       3.28  Brokers and Finders.  No broker, finder or investment banker is
  entitled to any brokerage, finder's or other fee or commission in connection
  with the transactions contemplated by this Agreement based on arrangements
  made by Magic or any of the Selling Shareholders.
  
       3.29  Truth of Representations and Warranties. All of the
  representations and warranties set forth in this Article III shall be true as
  of the time of the Effective Date. No representation or warranty or other
  statement made to ECHO by Magic or any Selling Shareholder contains any untrue
  statement of a material fact or omits to state a material fact necessary to
  make the statement, in light of the circumstances under which the statement
  was made, not misleading.
  
       3.30  Survival of Provisions. The provisions of this Article III shall
  survive Closing and the Merger.
  
       3.31  Knowledge Representation. When the words "to the best of Magic's
  and each Selling Shareholder's knowledge" appear in the provisions of this
  Article III, it is understood that no affirmative investigation has been made
  to confirm such "knowledge."
  
                                         IV
                   REPRESENTATIONS AND WARRANTIES OF ECHO AND EAC
  
       ECHO and EAC each represents and warrants to Magic and the Selling
  Shareholders as of the date of this Agreement and as of the date of the
  Effective Date as follows, except as set forth in Exhibit
  I:
  
       4.1  Organization and Standing: Authority. ECHO is a corporation duly
  organized, validly existing, and in good standing under the laws of Nevada.
  EAC is a corporation duly organized, validly existing, and in good standing
  under the laws of New Mexico. Each has the requisite corporate power and
  authority to own, lease and operate its properties and assets, and to carry on
  its business as presently conducted and as proposed to be conducted and to
  enter into this Agreement. All corporate action on the part of ECHO and EAC,
  its shareholders, directors and officers necessary for the authorization,
  execution, delivery and performance of this Agreement by ECHO and EAC has been
  taken or will be taken prior to the Effective Date This Agreement, when
  executed and delivered, is a valid and binding obligation of ECHO and EAC and
  will not violate the Articles of incorporation or bylaws of ECHO or EAC or any
  agreement, law, regulation, government order or other obligation under which
  ECHO or EAC is bound.
  
       4.2  Capitalization. The authorized capital stock of ECHO consists
  26,000,000 shares of Common Stock, of which 15,114,300 shares were issued and
  outstanding on September 30,1998; and 5,000,000 shares of Convertible
  Preferred Stock, of which 23,511 shares of Series H Preferred Stock were
  issued and outstanding on that date, 325,000 shares of Series K Preferred
  Stock were issued and outstanding on that date, and 168,000 shares of Series L
  Preferred Stock were issued and outstanding on that date. All issued and
  outstanding shares have been duly authorized and validly issued, are fully-
  paid and nonassessable, and were issued in full compliance with all applicable
  laws. Options to acquire up to 3,801,000 shares of Common Stock at exercise
  prices ranging from $0.40 to $1.06 per share were outstanding on September 30,
  1998, and warrants to acquire up to 1,000,000 shares of Common Stock at $0.40
  per share were outstanding on that date. Holders of shares of Common Stock
  have one vote for each share of Common Stock held in connection with matters
  on which a shareholder vote is taken, the right to receive dividends and other
  distributions when, as and if declared by the board of directors, and such
  other rights as may be set forth in the Articles of incorporation and required
  by applicable law The rights of holders of capital stock of ECHO are more
  fully described in the Articles of incorporation of ECHO, and the foregoing
  description in this Section 4.2 is subject in all respects to the provisions
  of those Articles. There are no bonds, debentures, notes or other evidences of
  indebtedness having the right to vote on any matter. The authorized capital
  stock of EAC consists of 10,000 shares of Common Stock of which 100 shares are
  issued and outstanding. The rights of holders of capital stock of EAC are more
  fully described in the Articles of incorporation of EAC.
  
       4.3  Corporate Documents. ECHO and EAC has each delivered to Magic true
  copies of its Articles of Incorporation and its bylaws as currently in effect.
  There shall have been no changes to these documents at the time of the
  Effective Date.
  
       4.4  Financial Statements. ECHO has delivered to Magic a balance sheet
  and income statement for each of the fiscal years ended September 30, 1994,
  1995, 1996, 1997, and 1998, prepared in accordance with generally accepted
  accounting principles. The balance sheets fairly present the assets,
  liabilities, and financial condition of ECHO as of the dates presented and the
  income statements fairly present the results of operations of ECHO for the
  periods therein referred to. To the best of ECHO's knowledge, there have been
  no material changes in any asset or liability reflected in the most recent
  such balance sheet after the date of that balance sheet.
  
       4.5  Governmental Consent. To the best of ECHO's and EAC's knowledge,
  after consultation with legal counsel, no consent, approval or authorization
  of or designation, declaration or filing with any governmental authority on
  the part of ECHO or EAC is required in connection with the valid execution and
  delivery of this Agreement, or the offer, sale or delivery of the ECHO Shares,
  or the consummation of any other transaction contemplated hereby, except
  filing Articles of Merger as provided in Section 1.1, certain securities
  filings in connection with applicable exemptions from registration and/or
  qualification requirements, and certain filings required by federal securities
  regulations.
  
       4.6  Free of Liens and Encumbrances. The ECHO Shares when issued as
  provided in this Agreement will be validly issued, fully-paid and
  nonassessable, and will be free of any liens, claims, encumbrances, or other
  restrictions of any kind except those relating to applicable securities laws
  requirements and those set forth in this Agreement. Neither the execution of
  this Agreement nor the issuance of the ECHO Shares to Selling Shareholders as
  contemplated herein shall violate the Articles of incorporation or bylaws of
  ECHO or EAC, any agreement, or any law, rule or order of any governmental
  authority or any court.
  
       4.7  Truth of Representations and Warranties. All of the representations
  and warranties set forth in this Article IV shall be true as of the Effective
  Date. No representation or warranty or other statement made to Magic or any
  Selling Shareholder by ECHO or EAC contains any untrue statement of a material
  fact or omits to state a material fact necessary to make the statement, in
  light of the circumstances under which the statement was made, not misleading.
  
       4.8  Due Diligence. ECHO represents that ECHO has had the opportunity to
  ask questions of; and to receive answers from, Magic concerning the terms and
  conditions of its investment in Magic Shares and to obtain additional
  information (to the extent Magic possessed such information or could acquire
  it without unreasonable effort or expense) necessary to verify the accuracy of
  any information furnished to ECHO or to which ECHO had access.
  
       4.9  Suppliers and Customers. No substantial supplier or customer (who
  accounted for more than 2% of aggregate 1998 purchases or more than 2% of
  aggregate 1998 revenues, as the case may be) or any prospective customer, has
  indicated to ECHO or EAC that it intends to terminate its relationship with
  ECHO or EAC, nor does ECHO or EAC have knowledge that any such supplier or
  customer intends to terminate such relationship. There is no information that
  would indicate that ECHO or EAC does not have good business relations with
  each supplier and customer, or that consummation of the transactions
  contemplated by this Agreement would or might disrupt ECHO's and EAC's
  existing relationships with any such supplier or customer.
  
       4.10  Records. ECHO and EAC has made available to Magic all records
  requested by Magic in all media, including without limitation all requested
  financial records, product records, software code, written operating
  procedures, customer records, personnel records, and insurance records.
  
       4.11  No Material Adverse Effect. To the best of ECHO's and EAC's
  knowledge, there does not exist any fact or circumstance which, alone or
  together with another fact of circumstance, could reasonably be expected to
  have an effect on the business, properties, assets, condition (financial or
  otherwise), liabilities, operations, properties or prospects of ECHO or EAC
  taken as a whole in an amount in excess of $200,000.
  
       4.12  Brokers and Finders.  No broker, finder or investment banker is
  entitled to any brokerage, finder's or other fee or commission in connection
  with the transactions contemplated by this Agreement based on arrangements
  made by ECHO or EAC.
  
       4.13  Survival of Provisions. The provisions of this Article IV shall
  survive the Effective Date and the Merger.
  
       4.14  Knowledge Representation. When the words "to the best of ECHO's and
  EAC's knowledge" appear in the provisions of this Article IV, it is understood
  that no affirmative investigation has been made to confirm such "knowledge."
  
                                          V
                                 RESTRICTIVE LEGENDS
  
       5.1  Securities Act of 1933. Each certificate representing the ECHO
  Shares shall bear a legend substantially as follows:
  
        THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
        MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
        UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
        UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2) THE TRANSFER
        IS MADE IN COMPLIANCE WITH SECURITIES AND EXCHANGE
        COMMISSION RULE 144, OR (3) ECHO RECEIVES AN OPINION OF
        COUNSEL FOR THE HOLDER OF THE SECURITIES REASONABLY
        SATISFACTORY TO ECHO, STATING THAT SUCH SALE, TRANSFER,
        ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE
        REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
        ACT.
  
       5.2  Escrow Legend. While in escrow as provided in this Agreement, each
  certificate representing ECHO Shares shall bear a legend substantially as
  follows:
  
        THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
        RESTRICTIONS ON TRANSFER SET FORTH IN AN ESCROW AGREEMENT,
        A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
        COMPANY, AND CANNOT BE TRANSFERRED EXCEPT AS PROVIDED IN
        THAT ESCROW AGREEMENT.
  
       5.3  Additional Legends. Each certificate representing ECHO Shares shall
  bear any other legend required by the securities laws or other laws of any
  jurisdiction.
  
       5.4  Restrictions on Transfer. ECHO need not register a transfer of any
  of the ECHO Shares unless the conditions and requirements specified in the
  applicable legend are satisfied. in addition, ECHO shall make a notation
  regarding the restrictions on transfer of ECHO Shares in its stock books. ECHO
  Shares shall be transferred on the books of ECHO only if transferred or sold
  in compliance with the Securities Act of 1933 and applicable state securities
  and other laws.
  
                                         VI
                            SELLING SHAREHOLDER COVENANTS
  
       6.1  Covenant Regarding Competition. Each of Kris D. Winckler, Steven D.
  Kirk, Robert L. Hare, and Steven J. Freed agrees that, during the three (3)
  year period after the Closing, he will not, directly or indirectly, in any
  state or territory of the United States or in any other country:
  
        (A)  engage in any enterprise which competes with Magic or may
        reasonably result in competition with Magic;
  
        (B)  solicit any employee of Magic or any consultant engaged by Magic
        for the purpose of hiring such employee or consultant;
  
        (C)  solicit any customer of Magic for the purpose of providing any
        services or any products   to such customer similar to the products sold
        to that customer by Magic.
  
       6.2  Trade Secrets. Each of the Selling Shareholders agrees that he will
  not at any time use or disclose any Trade Secrets of ECHO or any subsidiary of
  ECHO including without limitation Magic (individually and collectively
  referred to in this Section 6.2 as "ECHO"), except as otherwise agreed in a
  writing signed by a duly authorized officer of ECHO and by the Selling
  Shareholder. Trade Secrets include ECHO's marketing plans, product plans,
  customer lists, confidential proprietary rights in ECHO's intellectual
  property, and other nonpublic proprietary information that ECHO may designate
  as a "Trade Secret." Each of the Selling shareholders further agrees that he
  will not use or disclose the nonpublic proprietary information of any other
  person that the Selling Shareholder has reason to know that ECHO has an
  obligation to protect from disclosure or use.
  
       6.3 Inventions Disclaimer and Assignment. Each of the Selling
  Shareholders disclaims any right, title or interest in any tangible or
  intangible asset of Magic including without limitation any concept, design,
  idea, method, computer program, software, system, manual, documentation or
  trade Secret of Magic ("Magic Asset"), and hereby assigns and transfers to
  Magic any right, title or interest that such Selling Shareholder may now or in
  the future have in any Magic Asset. Each of the Selling Shareholders will
  assist Magic (at Magic's expense) in obtaining and from time to time enforcing
  patents, copyrights, and other legal protection for Magic Assets in the United
  States and any other country, including without limitation by executing all
  documents confirming his assignment of any Magic Asset necessary to ensure and
  perfect Magic's right to such Magic Asset and to apply for and obtain patents,
  copyrights and other legal protection.
  
       6.4  Remedies. Each of the Selling Shareholders acknowledges that a
  breach of this Article VI may cause ECHO continuing and irreparable injury to
  its business which may not be adequately compensated for by money damages.
  Each of the Selling Shareholders therefore agrees that in the event of any
  actual or threatened breach of this Article VI, ECHO shall be entitled, in
  addition to other available remedies, to a temporary restraining order and to
  injunctive preliminary and final relief to prevent any violations of this
  Article VI. in any such injunctive proceedings, the prevailing party shall be
  entitled to recover its reasonable attorneys' fees, costs and other expenses.
  
       6.5  Survival of Provisions. The provisions of this Article VI shall
  survive and continue in effect after Effective Date.
  
                                         VII
                                      INDEMNITY
  
       7.1  Indemnity by ECHO. ECHO shall indemnify and hold harmless the
  Selling Shareholders and their heirs, representatives and assigns, from any
  claims, liabilities, losses, damages and related expenses caused by breach of
  any provision of this Agreement, including without limitation any
  representation or warranty set forth in Article IV.
  
       7.2  Indemnity by Selling Shareholders. The Selling Shareholders shall
  jointly and severally indemnify and hold harmless ECHO, and its successors and
  assigns, from any claims, liabilities, losses, damages and related expenses
  caused by breach of any provision of this Agreement, including without
  limitation any representation or warranty set forth in Article III.
  
       7.3  Further Indemnity by ECHO.  ECHO agrees to indemnify Magic and the
  Selling Shareholders from all liabilities, including reasonable attorneys fees
  and court costs, arising from an alleged non-circumvention agreement between
  ECHO and Precision Life Style International Corp.
  PLIC).
  
       7.3  Survival of Provisions. The provisions of this Article VII shall
  survive and continue in effect after the Effective Date.
  
                                        VIII
                                CONDITIONS TO CLOSING
  
  8.1 ECHO Conditions. The obligations of ECHO under this Agreement are subject
  to the fulfillment on or before the date of Closing of each of the following
  conditions, any of which may be waived by ECHO in writing:
  
          8.1.1 Delivery of Documents at Closing. All documents required to be
  delivered to ECHO at Closing shall have been tendered for delivery to ECHO.
  
          8.1.2 Compliance with Law. All consents, authorizations, permits or
  other approvals, if any, that are required by any governmental authority or
  regulatory agency (other than filing the Articles of Merger), or under any
  agreement or other document under which ECHO or Magic is obligated, shall have
  been duly obtained and shall be effective. Consummation of the transactions
  contemplated by this Agreement shall comply with all requirements of corporate
  law applicable to mergers; and shall not violate any law, regulation, or order
  of any governmental authority or any court, nor any obligation under which
  ECHO, EAC or Magic is bound.
  
          8.1.3  ECHO Director Approval. The board of directors of ECHO shall
  have approved the execution of this Agreement.
  
          8.1.4  Magic Director Approval. The board of directors of Magic shall
  have approved this Agreement and the Merger, and shall have directed that the
  Merger be submitted to the shareholders of Magic for approval, and copies of
  the resolution of such board of directors setting forth such approvals and
  direction, certified by the President and Secretary of Magic, shall have been
  delivered to ECHO.
  
          8.1.5  Magic Shareholder Approval. The shareholders of Magic shall
  have approved the Merger as required by law, and copies of the resolution of
  such shareholders setting forth such approval, certified by the President and
  Secretary of Magic, shall have been delivered to ECHO.
  
          8.1.6  Documents. All documents delivered to ECHO pursuant to this
  Agreement shall be reasonably acceptable to ECHO.
  
          8.1.7  Adverse Changes. No material adverse change shall have occurred
  in the financial condition, working capital, assets, liabilities, business,
  operations or prospects of Magic since the date of its most recent balance
  sheet delivered to ECHO as provided in this Agreement.
  
          8.1.8  Representations and Warranties True. The representations and
  warranties of Magic and the Selling Shareholders set forth in Article III
  shall be true in all material respects as of the date of Closing.
  
          8.1.9  Employee Agreements. Each of the employees of Magic designated
  by ECHO shall have signed and delivered a Nondisclosure and Inventions
  Disclaimer Agreement substantially in the form of Exhibit J.
  
          8.1.10  Resignations of Directors and Officers. Each director and
  each officer of Magic shall have signed a resignation in the form of Exhibit
  K.
  
          8.1.11  Investor Representations. Each Selling Shareholder shall have
  delivered to ECHO an executed copy of investor Representations and, based on
  those investor Representations and other information known to ECHO, ECHO shall
  have determined that issuance of ECHO Shares to the Selling Shareholders
  complies with the Securities Act and applicable State Law.
  
  8.2   Magic/Selling Shareholder Conditions. The obligations of Magic and the
  Selling Shareholders under this Agreement are subject to the fulfillment on or
  before the date of Closing of each of the following conditions, any of which
  may be waived by Magic and Selling Shareholders holding a majority of the
  Magic Shares in writing:
  
          8.2.1  Delivery of Documents at Closing. All documents required to be
  delivered to Selling Shareholders at Closing shall have been tendered for
  delivery to the Selling Shareholders.
  
          8.2.2  Compliance with Law. All consents, authorizations, permits or
  other approvals, if any, that are required by any governmental authority or
  regulatory agency (other than filing the Articles of Merger), or under any
  agreement or other document under which ECHO or Magic is obligated, shall have
  been duly obtained and shall be effective. Consummation of the transactions
  contemplated by this Agreement shall comply with all requirements of corporate
  law applicable to mergers; and shall not violate any law, regulation, or order
  of any governmental authority or any court, nor any obligation under which
  ECHO, EAC or Magic is bound.
  
          8.2.3  EAC Director Approval. The board of directors of EAC shall have
  approved this Agreement and the Merger, and shall have directed that the
  Merger be submitted to the shareholder of EAC for approval, and copies of the
  resolution of such board of directors setting forth such approval, certified
  by the President and Secretary of EAC, shall have been delivered to the
  Selling Shareholders.
  
          8.2.4  EAC Shareholder Approval. The shareholders of EAC shall have
  approved the Merger as required by law, and copies of the resolution of such
  shareholder setting forth such approval, certified by the President and
  Secretary of EAC, shall have been delivered to ECHO. 
  
          8.2.5  Adverse Changes. No material adverse change shall have occurred
  in the financial condition, working capital, assets, liabilities, business,
  operations or prospects of ECHO since the date of its most recent balance
  sheet filed with the Securities and Exchange Commission.
  
           8.2.6  Representations and Warranties True. The representations and
  warranties of ECHO as set forth in Article Iv shall be true in all material
  respects as of the date of Closing.
  
                                         IX
                                       CLOSING
  
       9.1  Date of Closing. The closing of the transactions contemplated by
  this Agreement ("Closing") shall take place on April 20, 1999 at 12:00
  o'clock, at the offices of Magic located at the address Set forth at the end
  of this Agreement, or at such other date, time and place as ECHO, Magic and
  Selling Shareholders holding a majority of the Magic Shares may agree in
  writing.
  
       9.2 Documents to be Delivered At Closing. At the Closing, the parties
  shall deliver the following.
  
     (1)  Each of the Selling Shareholders shall deliver to ECHO:
  
        (A)  Certificates for Magic Shares as provided in this Agreement, duly
        endorsed to transfer all right, title and interest in such Shares to
        ECHO along with such other documents as ECHO shall reasonably request to
        ensure the transfer to ECHO of all such right, title and interest,
        totaling all of the Magic Shares.
  
        (B)   An executed copy of the Escrow Agreement.
  
        (C)   An executed copy of this Agreement, if not previously delivered.
  
        (D)   Completed and executed Investor Representations, if not previously
        delivered.
  
     (2) ECHO shall deliver
  
        (A)  Certificates for the number of Basic Shares issued to each Selling
        Shareholder, to the Escrow Agent in accordance with the Escrow
        Agreement.
  
        (B)  An executed copy of the Employment Agreement, to Kris D. Winckler,
        Steven D. Kirk, Robert L. Hare, and    Steven J. Freed, respectively.
  
        (C)  An executed copy of the Escrow Agreement, to each Selling
        Shareholder.
  
        (D)  An executed copy of this Agreement, to each Selling Shareholder, if
        not previously delivered.
  
     (3)  Magic shall deliver to ECHO
  
        (A)  Employment, Nondisclosure and Inventions Disclaimer Agreements as
        provided in Section 8.1.9.
  
        (B)  Resignations signed by each director and officer of Magic as
        provided in Section 8.1.10.
  
        (C)  An executed copy of the Escrow Agreement.
  
        (D)  Executed copies of Employment Agreements with Kris D.
        Winckler, Steven D. Kirk, Robert L. Hare, and Steven J. Freed.
  
        (E)  An executed copy of this Agreement, if not previously delivered.
  
        (F)  Articles of Merger, signed by the President and Secretary of Magic.
  
     (4)  EAC shall deliver to Magic and to the Selling Shareholders:
  
        (A)  Copies of resolutions adopted by the board of directors of EAC
        approving this Agreement and the Merger, certified by the President and
        the Secretary of EAC.
  
        (B)  Copies of resolutions adopted by the shareholder of EAC approving
        this Agreement and the Merger, certified by the President and the
        Secretary of Magic.
  
        (C)  Articles of Merger, signed by the President and the Secretary of
        EAC.
  
     (5)  Kris D. Winckler, Steven D. Kirk, Robert L. Hare, and Steven J. Freed  
     shall each deliver an executed copy of his Employment Agreement, to ECHO.
  
                                      ARTICLE X
                              MISCELLANEOUS PROVISIONS
  
       10.1  Governing Law. This Agreement was made in and shall be governed in
  all respects by the laws of the State of California, except that the laws of
  New Mexico shall govern the Merger.
  
       10.2  Survival. The representations, warranties, covenants and agreements
  made herein shall not be waived or affected by any investigation by any party
  and shall survive the closing of the transactions contemplated hereby.
  
       10.3  Successors and Assigns. The provisions of this Agreement shall
  inure to the benefit of, and shall be binding upon, the successors, assigns,
  heirs, executors and administrators of the parties hereto.
  
       10.4  Entire Agreement. This Agreement and the other documents delivered
  pursuant hereto constitute the full and entire understanding and agreement
  between the parties with regard to the subject matter hereof
  
       10.5  Amendments. Any amendment or modification to this Agreement must be
  in writing signed by all of the parties.
  
       10.6  Notices. All notices required or permitted hereunder shall be in
  writing and shall be mailed by registered or certified mall, postage prepaid,
  or otherwise delivered by hand or by messenger, addressed to each party at the
  address set forth at the end of this Agreement, or at such other address as
  the party shall have furnished by notice hereunder.
  
       10.7  Expenses. Each party shall bear its own expenses, including legal
  fees, incurred on its behalf with respect to this Agreement and the
  transactions contemplated hereby.
  
       10.8  Counterparts. This Agreement may be executed in any number of
  counterparts, each of which shall be an original, and each of which shall be
  enforceable against the parties actually executing such counterpart, and all
  of which together shall constitute one instrument.
  
       10.9  Headings. The headings in this Agreement are for convenience of
  reference only and are not to be considered in construing this Agreement.
  
       10.10 Waivers. Any waiver of any breach or default under this Agreement,
  or any waiver of any provisions or conditions of this Agreement, must be in
  writing and shall be effective only to the extent specifically set forth in
  such writing.
  
       10.11 Severability. In the event that any provision of this Agreement
  becomes or is declared by a court of competent jurisdiction to be illegal,
  unenforceable or void, this Agreement shall continue in full force and effect
  without said provision; provided that no such severability shall be effective
  if it materially changes the economic benefit of this Agreement to any party.
  
       10.12  Attorneys Fees. If legal or other proceedings are instituted by
  any party against any other party to enforce any provision of this Agreement,
  the prevailing party shall be entitled to recover reasonable attorneys' fees,
  court costs and ancillary expenses.
  
       10.13  Assumption of Liabilities. ECHO assumes and agrees to pay amounts
  owing to Lila Hare and Debra Kirk, aggregating $53,536.60 on or before April
  1, 2000. ECHO will hold harmless Magic and the Selling Shareholders from any
  liability in connection therewith.
  
       10.14  Certain Magic Liabilities. ECHO will hold harmless Magic and
  Selling Shareholders from any liability in connection with Magic's office
  lease and its equipment loan from First Security Bank and will endeavor to get
  Selling Shareholders released from their personal guarantee of the office
  lease and equipment loan.
  
       10.15  ECHO Funding Commitment. In the event that ECHO falls to provide
  funding in at least the amounts and on or before the times set forth in
  Exhibit L, all unearned Performance Shares shall immediately vest.
  
       10.16  Selling Shareholders' Spousal Indemnity and Representations. Each
  of the Selling Shareholders will indemnify and hold harmless ECHO, its
  successors and assigns, against all liabilities, all defects in title to Magic
  Shares transferred to ECHO pursuant to this Agreement, and all related costs
  and expenses, arising out of any claim by the spouse of the Selling
  Shareholder based on marital rights of the spouse in such Magic Shares. Kris
  D. Winckler and Steven Kirk each represents that the person signing along with
  that Selling Shareholder below is the spouse of that Selling Shareholder.
  Robert L. Hare and Steven I. Freed each represents that he is not married as
  of the date of Closing. Robert Moller and Lisa Moller represent that they are
  spouses and co-owners of the Magic Shares indicated opposite their names.
  
       10.17  Further Action. Each party agrees to execute and deliver such
  documents and to take such further action after Closing as may be necessary or
  appropriate to effect the Merger and the other provisions of this Agreement.
  
       10.18  Counterparts. This Agreement may be executed in two or more
  counterparts, each of which shall be deemed an original, but all of which
  together shall constitute one and the same instrument.
  
                                     ARTICLE XI
                            SIGNATURES AND SHARE AMOUNTS
  
       The parties hereto have evidenced their agreement to the provisions of
  this Agreement by their signatures subscribed below, it being understood that
  the Selling Shareholders hold the number of Magic Shares indicated, and the
  Selling Shareholders are entitled to receive the number of Base Shares
  indicated and up to the maximum number of Performance Shares indicated, in
  accordance with and subject to the terms of this Agreement.
  
       Each spouse signing below represents that she has read and understood
  this Agreement, she consents to its terms, and she releases and assigns any
  community property or other interest she may have in any of the Magic Shares
  to ECHO pursuant to this Agreement.
  
  "ECHO"                            "MAGIC"
  
  ELECTRONIC CLEARING HOUSE, INC.   MAGIC SOFTWARE DEVELOPMENT, INC.
  
  By:  Joel M. Barry,               By: Kris D. Winckler,
       Chairman and                     President and Chief
         Chief Executive Officer         Executive Officer
  
  28001 Dorothy Drive               215 Central Avenue N.W., Suite 3A
  Agoura Hills, CA 91301-2697       Albuquerque, NM 87102
  
  "EAC"
  
  ECHO ACQUISITION CORPORATION
  
  By: Joel M. Barry,
      Chairman and Chief Executive Officer
  
  28001 Dorothy Drive
  Agoura Hills, CA 91301-2697
  MAXIMUM
                                  MAGIC   BASE      PERFORMANCE
  SELLING SHAREHOLDERS            SHARES  SHARES    SHARES
  Kris Winckler                   25      250,000   250,000
  Patricia Winckler
  
  Steven D. Kirk                  25      250,000   250,000
  Debra Kirk
  
  Robert L. Hare                  25      250,000   250,000
  
  Steven J. Freed                 18      180,000   180,000
  
  Richard Moller                   7       70,000    70,000
  Lisa Moller
  
  /TABLE
  EXHIBIT 99.1
  
        FOR IMMEDIATE RELEASE
        April 29, 1999
  
                ECHO ANNOUNCES THE COMPLETION OF THE ACQUISITION OF 
                          MAGIC SOFTWARE DEVELOPMENT, INC.
  
        Agoura Hills, Calif.--Electronic Clearing House, Inc. (NASDAQ:ECHO)
  today announced the completion of the acquisition of Magic Software
  Development, Inc. (Magic).  ECHO had announced an agreement in principle on
  March 8, 1999 and final recording of the acquisition with the appropriate
  state agencies occurred on April 27, 1999. Magic, who will operate as a wholly
  owned subsidiary of ECHO, is based in Albuquerque, New Mexico, and is a
  provider of electronic check conversion, electronic check re-presentment,
  check verification, and check guarantee solutions to financial services
  companies and retailers across the nation.
        
        Under the terms of the acquisition, ECHO issued 1,000,000 shares of ECHO
  common stock.  The shares will be held in escrow and 500,000 shares will be
  released to the Magic selling shareholders on April 1, 2001 and 500,000 shares
  will be released on April 1, 2002.
        
        An additional 1,000,000 shares of ECHO stock will be placed into escrow
  to be issued to the Magic selling shareholders under a performance clause
  wherein, should the Magic subsidiary's performance meet or exceed
  predetermined earnings goals for fiscal year 2000 and 2001, a proportionate
  number of performance based shares will be issued. Any shares issued under the
  performance clause will be held in escrow and 50% will be released on April 1,
  2003 and the balance will be released on April 1, 2004.  
        
        Mr. Kris Winckler, President of Magic, will remain the President of the
  ECHO subsidiary and Mr. Dave Griffin, Vice President of ECHO, has been
  designated Director of Check Services and will assist in the integration of
  Magic products and services with the ECHO family of products and services. 
        
        "We believe it is logical for a merchant to expect their payments
  processor to provide a full complement of payment options and, with the
  addition of Magic, ECHO will be one of a select few processors in the nation
  who will have fully integrated credit card and check services", stated Joel M.
  Barry, CEO of ECHO.  "We intend to make both forms of payment available in
  real time over the internet, which will further distinguish ECHO from other
  less technically capable processors, and maximize the benefit to our growing
  internet base of merchants", stated Mr. Barry.     
        
        Magic has been an active member of the Electronic Check Counsel, a group
  of national retailers, banks and electronic processors, that was set up by the
  National Automated Clearing House Association (NACHA) to investigate and
  advise NACHA on new electronic check products.  "NACHA just announced its
  approval of new rules relating to electronic check conversion which will
  result in substantial cost savings for both retailers and financial
  institutions", said Kris Winckler, President of Magic. 
  
        In a check conversion transaction, the consumer presents a retail
  merchant with a check which is run through an electronic reader to capture the
  consumer's bank account number, routing information, and check serial number.
  The merchant then returns the check to the consumer with a "void" stamped on
  the check.  The consumer signs a receipt authorizing the electronic
  transaction and keeps a copy as a record of the purchase.  The merchant
  initiates an Automated Clearing House (ACH) debit, using the check information
  and transaction amount, which is processed electronically through the ACH
  network. The ACH Network is commonly used for payments such as Direct Deposit
  of payroll and Social Security benefits, and automated bill payments. In 1998,
  more than 5.3 billion ACH payments were made worth over $16 trillion.
        
        The benefits to retailers of using electronic checks at the point of
  sale include reduced costs from the elimination of paper handling, faster and
  more effective redeposit and return item processing, simplified
  reconciliation, detailed settlement and transaction reporting, improved
  customer information flow, and a lower incidence of fraud.
        
        "Magic is a leader in developing and deploying electronic check services
  and, with ECHO's background and capabilities in credit card and internet-based
  processing, the combined suite of services we will be able to offer to
  merchants should make ECHO a highly preferred processor with merchants across
  the nation", stated Winckler.                                       
        
        "The Magic team of programmers and engineers match well with ECHO's
  distinction as a technically competent company", stated Mr. Barry. "We think
  some innovative products and services, especially in the internet, will
  naturally result from this combination of talent."
        
        To take advantage of the new "safe harbor" provisions of the Private
  Securities Litigation Reform Act of 1995, you are hereby cautioned that this
  release contains forward-looking statements that are based upon current
  expectations and involve a number of risks and uncertainties.  Actual
  operations and results may differ materially from those expressed in the
  forward-looking statements made by the Company.
        
        Electronic Clearing House, Inc. provides credit card processing, check
  guarantee, inventory tracking services and various Internet services to over
  19,000 retail merchants and U-Haul dealers across the nation.  ECHO also
  designs, develops and manufactures software and point-of-sale hardware that is
  utilized as credit card processing terminals, automated money order
  dispensers, inventory tracking devices, and casino cash advance systems.
  
                               #          #          #
  
  Media Contact:
  Donna Camras, Corporate Secretary                  URL: http://www.echo-inc.com
  818-706-8999, ext. 3033                               E-MAIL: corp@echo-inc.com
  Electronic Clearing House, Inc.
  Agoura Hills, Calif.