Exhibit 10.1


    
      

    

    
      EXHIBIT
        10.1

      


      


      SEPARATION
        AGREEMENT

      


      


      This
        Separation Agreement (this “Agreement”)
        is
        made and entered into as of the [__] day of [__________], 2006, by and between
        Electronic Clearing House, Inc., a Nevada corporation (the “Company”)
        and
        [____________] (“Executive”).

       

      RECITALS

       

      WHEREAS,
        Executive is employed by the Company as the [___________] of the Company;
        and

      


      WHEREAS,
        the Company considers it essential to its best interests and to the best
        interests of its stockholders to foster the continuous employment of its
        key
        personnel.

      


      NOW,
        THEREFORE, in consideration of the mutual covenants and promises herein
        contained and other good and valuable consideration, receipt and sufficiency
        of
        which are hereby acknowledged, the parties hereby agree as follows:

      


      1.    Definitions.
        

       

      a.    “Anticipated
        Annual Bonus”
shall
        mean the highest possible annual bonus award to be received by Executive
        in a
        given fiscal year based upon and assuming the successful completion by each
        of
        the Company and Executive, as applicable, of performance criteria previously
        determined by the Board of Directors of the Company for such fiscal
        year.

       

      b.    “Change-in-Control”
shall
        mean the consummation of (i) a merger or consolidation of the Company with
        or
        into another entity or any other corporate reorganization, if more than 50%
        of
        the combined voting power (which voting power shall be calculated by assuming
        the conversion of all equity securities convertible (immediately or at some
        future time) into shares entitled to vote, but not assuming the exercise
        of any
        warrant or right to subscribe to or purchase those shares) of the continuing
        or
        surviving entity’s securities outstanding immediately after such merger,
        consolidation or other reorganization is owned, directly or indirectly, by
        persons who were not stockholders of the Company immediately prior to such
        merger, consolidation or other reorganization; provided,
        however,
        that in
        making the determination of ownership by the stockholders of the Company,
        immediately after the reorganization, equity securities which persons own
        immediately before the reorganization as stockholders of another party to
        the
        transaction shall be disregarded; or (ii) the sale, transfer or other
        disposition of all or substantially all of the Company’s assets.

       

      c.    “Common
        Stock”
means
        the common stock, $.01 par value of the Company.

       

      d.    “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended. References to a particular
        section of the Exchange Act include references to successor
        provisions.

       

      e.    “Involuntary
        Termination”
shall
        mean Executive's cessation of the provision of services following (i)
        a
        material reduction in Executive's function, authority, duties, or
        responsibilities, without Executive's express written consent; or (ii) a
        material reduction in salary. 

       

      f.    “Options”
shall
        mean options issued by the Company to the Executive to purchase Common Stock
        pursuant to the Company's Amended and Restated 2003 Incentive Stock Option
        Plan.


       

      g.    “Restricted
        Stock”
shall
        mean shares of Common Stock acquired by Executive pursuant to, or outside
        of,
        the Company's Amended and Restated 2003 Incentive Stock Option Plan.


       

      h.    “Sales
        Commission Plan”
shall
        mean a plan setting forth, for a given fiscal year, sales commission
        compensation payable to Executive based on performance criteria previously
        determined by the Board of Directors of the Company for such fiscal
        year.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      i.    “Subsidiary”
means
        (a) any corporation of which more than 50% of the Voting Securities are at
        the
        time, directly or indirectly, owned by the Company, (b) any partnership or
        limited liability company in which the Company has a direct or indirect interest
        (whether in the form of voting power or participation in profits or capital
        contribution) of more than 50%, and (c) any other entity designated by the
        Board
        of Directors of the Company (“Board”)
        in
        which the Company has a direct or indirect interest.

       

      j.    “Termination
        Date”
shall
        mean the date in which Executive (i) is terminated by the Company without
        Cause,
        or (ii) ceases to provide services to the Company as a result of an Involuntary
        Termination with respect to Executive. 

       

      k.    Termination
        for “Cause”
shall
        mean termination by
        reason
        of: (i) any act or omission knowingly undertaken or omitted by Executive
        with
        the intent of causing damage to the Company or its affiliates, its properties,
        assets or business, or its stockholders, officers, directors or employees;
        (ii)
        any act of Executive involving a material personal profit to Executive,
        including, without limitation, any fraud, misappropriation or embezzlement,
        involving properties, assets or funds of the Company or any of its subsidiaries;
        (iii) Executive's consistent failure to perform his normal duties or any
        obligation under any provision of this Agreement, in either case, as directed
        by
        the Board; (iv) conviction of, or pleading nolo contendere to, (A) any crime
        or
        offense involving monies or other property of the Company; (B) any felony
        offense; or (C) any crime of moral turpitude; or (v) the chronic or habitual
        use
        or consumption of drugs or alcoholic beverages.

       

      l.    “Total
        Cash Compensation”
        shall
        mean an amount equal to the sum of Executive's annual base salary for the
        prior
        fiscal year including any bonus awards. 

       

      m.    “Voting
        Securities”
shall
        mean the issued and outstanding shares of Common Stock of the Company that
        are
        entitled to vote on a particular matter.

       

      2.    Vesting.
        In the
        event of a Change in Control, and provided that Executive is employed by
        the
        Company at the time of such Change in Control: (i) all of the outstanding
        Options shall become immediately vested and exercisable, and (ii) the entire
        unvested portion of any shares of Restricted Stock shall accelerate and
        immediately vest. 

       

      3.    Payment
        of Bonus.
        In the
        event of a Change in Control, and provided that Executive is employed by
        the
        Company at the time of such Change in Control, Executive shall be entitled
        to
        receive the following: (A) (i) in the event such Change in Control occurs
        in the
        first six (6) months of the Company’s then existing fiscal year, Executive shall
        receive a one time lump-sum cash payment equal to the product of Executive’s
        Anticipated Annual Bonus, multiplied by 0.50, or (ii) in the event such Change
        in Control occurs during any period following the first six (6) months of
        the
        Company’s then existing fiscal year, Executive shall receive a one time lump-sum
        cash payment equal to a pro-rated portion of Executive’s Anticipated Annual
        Bonus, pro-rated based upon the number of months of service the Executive
        had
        provided in the then existing fiscal year (each a “Bonus
        Payment”);
        and
        (B) in the event that Executive is entitled to receive commissions based
        on
        sales under any then existing Sales Commission Plan, Executive shall be entitled
        to receive any and all then earned sales commissions (“Sales
        Commission Payments”)
        for
        the remainder of the then existing fiscal year (notwithstanding when the
        Change
        in Control occurs). Any Bonus Payment shall be payable by Company (or its
        corporate successor) to
        Executive within five (5) business days following the consummation of such
        Change in Control, and any Sales Commission Payments will be payable in
        accordance with the terms of the Sales Commission Plan. The Company shall
        cause
        any successor/acquiring entity in such Change in Control to adopt the Sales
        Commission Plan.

       

      4.    Termination.In
        the
        event that (i) a Change in Control occurs with respect to the Company (and
        provided that Executive is employed by the Company at the time of such Change
        in
        Control), and (ii) within a period of two (2) years following the closing
        of
        such Change in Control, Executive either (a) is terminated by the Company
        (or
        its corporate successor) without Cause, or (b) ceases
        to
        provide services to the Company (or its corporate successor) as a result
        of an
        Involuntary Termination with respect to Executive,
        then
        Executive shall be entitled to receive the following compensation: 

       

      (i)    a
        one
        time lump-sum cash payment in the amount of [__________ percent (__%)] of
        the
        total amount of Executive's Total Cash Compensation, payable by Company (or
        its
        corporate successor) to Executive within five (5) business days following
        the
        Termination Date; 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (ii)    for
        a
        period of [_________ (___) years] after the Termination Date, the Company
        (or
        its corporate successor) shall continue to make available to Executive medical
        benefits on a basis that is substantially similar (in benefits to Executive
        and
        costs to Company), in the aggregate, to the benefits that were available
        to the
        Executive immediately prior to the Change in Control.

      


      5.    Termination
        of Agreement.
        In
        the
        event that Executive ceases to provide services to the Company (or its
        successor) for any reason, prior to a Change of Control, this Agreement shall
        terminate without further action by the Company or Executive, and shall
        thereafter be deemed null and void.

       

      6.    General
        Release and Waiver.
        As a
        condition to any payment under this Agreement, in addition to the other
        requirements set forth herein, Executive shall enter into and deliver to
        the
        Company a general release and waiver in such form and containing such terms
        and
        conditions as the Board may require.

       

      7.    Executive
        Covenants.
        

       

      a.    For
        a
        period of one (1) year after the Termination Date (“Restricted
        Period”),
        Executive covenants not to, either directly or indirectly, for Executive
        or on
        behalf of or in conjunction with any other person, company, partnership,
        corporation, business, group, or other entity (each, a “Person”),
        solicit or attempt to solicit, recruit or attempt to recruit any employee,
        agent, or contract worker of the Company with whom Executive had contact
        during
        the course of [his or her] employment with the Company.

       

       

      b.    Executive
        further covenants and agrees that during the Restricted Period, Executive
        shall
        not, either directly or indirectly, for [himself or herself] or on behalf
        of or
        in conjunction with any other person or entity, (i) induce or attempt to
        induce
        any employee, officer or consultant of the Company to supply Confidential
        Information or Trade Secrets, as defined in Section 8 herein, of the Company
        to
        any third person, firm or corporation, or (ii) induce or attempt to induce
        any
        Person who, as of the date of the inducement or attempted inducement or within
        twelve (12) months prior to that date, is or was a customer, supplier, vendor,
        licensee, licensor or other business relation of the Company, to cease doing
        business with the Company or in any way interfere with the relationship between
        any such customer, supplier, vendor, licensee, licensor or other business
        relation and the Company. 

       

      c.    The
        covenants in this Section
        7
        are
        severable and separate, and the unenforceability of any specific covenant
        shall
        not affect the provisions of any other covenant. If any provision of this
        Section
        7 relating
        to the time period, scope, or geographic areas of the restrictive covenants
        shall be declared by a court of competent jurisdiction to exceed the maximum
        time period, scope, or geographic area, as applicable, that such court deems
        reasonable and enforceable, then this Agreement shall automatically be
        considered to have been amended and revised to reflect such
        determination.

       

      d.    All
        of
        the covenants in this Section
        7
        shall be
        construed as an agreement independent of any other provisions in this Agreement,
        and the existence of any claim or cause of action Executive may have against
        the
        Company, whether predicated on this Agreement or otherwise, shall not constitute
        a defense to the enforcement by the Company of such covenants.

       

      e.    Executive
        has carefully read and considered the provisions of this Section
        7
        and,
        having done so, agrees that the restrictive covenants in this Section
        7
        impose a
        fair and reasonable restraint on Executive and are reasonably required to
        protect the interests of the Company and its officers, directors, employees,
        and
        stockholders.

       

      8.    Trade
        Secrets and Confidential Information.
        

       

      a.    For
        purposes of this Section, “Confidential
        Information”
means
        any data or information (other than Trade Secrets) that is valuable to the
        Company (or, if owned by someone else, is valuable to that third party) and
        not
        generally known to the public or to competitors in the industry, including,
        but
        not limited to, any non-public information (regardless of whether in writing
        or
        retained as personal knowledge) pertaining to research and development; product
        costs and processes; stockholder information; pricing, cost, or profit factors;
        quality programs; annual budget and long-range business plans; marketing
        plans
        and methods; contracts and bids; and personnel. “Trade
        Secret”
means
        information including, but not limited to, any technical or nontechnical
        data,
        formula, pattern, compilation, program, device, method, technique, drawing,
        process, financial data, financial plan, product plan, list of actual or
        potential customers or suppliers or other information similar to any of the
        foregoing, which (i) derives economic value, actual or potential, from not
        being
        generally known to, and not being readily ascertainable by proper means by,
        other persons who can derive economic value from its disclosure or use and
        (ii)
        is the subject of efforts that are reasonable under the circumstances to
        maintain its secrecy.

       

      
        
          
          

        

        
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      b.    Executive
        acknowledges that [he or she] has been employed by the Company in a confidential
        relationship wherein [he or she], in the course of his employment with the
        Company, has received and has had access to Confidential Information and
        Trade
        Secrets of the Company and accordingly, [he or she] is willing to enter into
        the
        covenants contained in Sections
        8,
        9,
        and
10
        of this
        Agreement in order to provide the Company with what [he or she] considers
        to be
        reasonable protection for its interests.

       

      c.    Executive
        hereby agrees that, during
        the Restricted Period,
        [he or
        she] will hold in confidence all Confidential Information of the Company
        that
        came into [his or her] knowledge during [his or her] employment by the Company
        and will not disclose, publish or make use of such Confidential Information
        without the prior written consent of the Company.

       

      d.    Executive
        hereby agrees to hold in confidence all Trade Secrets of the Company that
        came
        into [his or her] knowledge during [his or her] employment by the Company
        and
        shall not disclose, publish, or make use of at any time after the Termination
        Date such Trade Secrets without the prior written consent of the Company
        for as
        long as the information remains a Trade Secret.

       

      e.    Notwithstanding
        the foregoing, the provisions of this Section will not apply to
        (i) Confidential Information or Trade Secrets that otherwise become
        generally known in the industry or to the public through no act of Executive
        or
        any person or entity acting by or on Executive's behalf, (ii) information
        independently developed by Executive without reference to the Company's
        Confidential Information or Trade Secrets, or (iii) disclosure of Confidential
        Information or Trade Secrets to the extent required to be disclosed by a
        court
        or governmental agency pursuant to a statute, regulation or valid order
        (provided that Executive first notifies the Company and gives it the opportunity
        to seek a protective order or to contest such required disclosure).

       

      f.    The
        parties agree that the restrictions stated in this Section
        8
        are in
        addition to and not in lieu of protections afforded to trade secrets and
        confidential information under applicable state law. Nothing in this Agreement
        is intended to or shall be interpreted as diminishing or otherwise limiting
        the
        Company's rights under applicable state law to protect its trade secrets
        and
        confidential information.

       

      9.    Return
        of Company Property.
        Upon
        the Termination Date or as promptly thereafter as is practicable, Executive
        shall deliver to the Company all correspondence, reports, records, designs,
        patents, business plans, financial statements, manuals, memoranda, customer
        lists, customer databases, charts, advertising materials, other similar data
        and
        other property delivered to or compiled by Executive by or on behalf of the
        Company or its representatives, vendors or customers which pertain to the
        business of the Company or future plans of the Company.

       

      10.   No
        Prior Agreements.
        Executive hereby represents and warrants that the execution of this Agreement
        by
        Executive and the performance of his duties hereunder will not violate or
        be a
        breach of any agreement with the Company, a former employer, client, or any
        other person or entity.

       

      11.   Assignment;
        Binding Effect.
        No
        assignment or transfer by any party of such party's rights and obligations
        under
        this Agreement will be made except with the prior written consent of the
        other
        parties to this Agreement; provided that the Company may assign this Agreement
        only to the surviving entity in a Change-in-Control, provided that any such
        assignee shall assume this Agreement in a writing delivered to Executive.
        Subject to the preceding sentence, this Agreement shall be binding upon,
        inure
        to the benefit of, and be enforceable by the parties and their respective
        heirs,
        legal representatives, successors, and permitted assigns.

       

      12.   Complete
        Agreement; Waiver; Amendment.
        Executive has no oral representations, understandings, or agreements with
        the
        Company or any of their respective officers, directors, or representatives
        covering the same subject matter as this Agreement. This Agreement is the
        final,
        complete, and exclusive statement of expression of the agreement between
        the
        Company and Executive with respect to the subject matter hereof, and cannot
        be
        varied, contradicted, or supplemented by evidence of any prior or
        contemporaneous oral or written agreements. This written Agreement may not
        be
        later modified except by a further writing signed by duly authorized officers
        of
        the Company and by Executive, and no term of this agreement may be waived
        except
        by a writing signed by the party waiving the benefit of such term.

       

      
        
          
          

        

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

       

      
        	 	
                To
                  the Company:

              	
                Electronic
                  Clearing House, Inc. 

              


      

      730
        Paseo
        Camarillo

      Camarillo,
        California 93010

      Attn:
         Board
        of
        Directors

      Facsimile
        No.: (805) 419-8682

      

        
          	
                  To
                    the Executive:

                	
                  _____________________

                
	
                   

                	
                  _____________________

                
	 	
                  _____________________

                
	 	
                  Facsimile
                    No.: (___) ________

                


        

      

       

      14.    Severability;
        Headings.
        If any
        provision of the Agreement is rendered or declared illegal or unenforceable
        by
        reason of any existing or subsequently enacted legislation or by the decision
        of
        any arbitrator or by decree of a court of last resort, the parties shall
        promptly meet and negotiate substitute provisions for those rendered or declared
        illegal or unenforceable to preserve the original intent of this Agreement
        to
        the extent legally possible, but all other provisions of this Agreement shall
        remain in full force and effect.

       

      15.    Equitable
        Remedy.
        Because
        of the difficulty of measuring economic losses to the Company as a result
        of a
        breach of the covenants set forth in Sections
        7 through 11,
        and
        because of the immediate and irreparable damage that would be caused to the
        Company for which monetary damages would not be a sufficient remedy, it is
        hereby agreed that in addition to all other remedies that may be available
        to
        the Company at law or in equity, the Company shall be entitled to specific
        performance and any injunctive or other equitable relief as a remedy for
        any
        breach or threatened breach of Executive's covenants.

       

      16.    Jointly
        Drafted.
        The
        parties and their respective counsel have participated jointly in the
        negotiation and drafting of this Agreement. In the event that an ambiguity
        or
        question of intent or interpretation arises, this Agreement shall be construed
        as if drafted jointly by the parties, and no presumption or burden of proof
        shall arise favoring or disfavoring any party by virtue of the authorship
        of any
        of the provisions of this Agreement.

       

      17.    Governing
        Law.
        This
        Agreement shall in all respects be governed by and construed in accordance
        with
        the laws of the State of California, not including the choice-of-law rules
        thereof. All disputes arising from or relating to this Agreement shall be
        subject to the exclusive jurisdiction of and be litigated in the state or
        federal courts located in the State of California. All parties hereby consent
        to
        the exclusive jurisdiction and venue of such courts for the litigation of
        all
        disputes and waive any claims of improper venue, lack of personal jurisdiction,
        or lack of subject matter jurisdiction as to any such disputes. 

       

      18.    Attorney's
        Fees.
        The
        losing party shall be liable to the prevailing party for its reasonable costs
        and attorney's fees incurred in any action to enforce this
        Agreement.

       

      N
        WITNESS
        WHEREOF, the parties hereto have caused this Agreement to be duly executed
        as of
        the date first written above.

       

      
        	 	Electronic
                Clearing House, Inc. 
	 	 	 	 
	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	 	 	 	 
	 	
                EXECUTIVE:

              
	 	 	 	 
	 	 
	 	
                [______________]

              


      

    

     

      

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