Collateral Trust Agreement

EXHIBIT 10.30


COLLATERAL
TRUST AGREEMENT


by and among


ACE CASH EXPRESS, INC.,


AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.,


PRINCIPAL MUTUAL LIFE INSURANCE COMPANY


and


WILMINGTON TRUST COMPANY


--------------------------


Dated as of November 15, 1996


TABLE OF CONTENTS


Page
----


PARTIES .................................................................... 1


RECITALS ................................................................... 1


DECLARATION OF TRUST ....................................................... 1


SECTION 1 DEFINITIONS AND OTHER MATTERS ............................... 3


SECTION 2 CERTAIN OBLIGATIONS AND DUTIES OF THE TRUSTEE
AND THE DEBTOR; POWERS OF ATTORNEY ......................... 13 Section 2.1. Authorization to Execute Security Documents .................. 13 Section 2.2. Certain Representations and Warranties ....................... 13 Section 2.3. Actions: Control of the Trustee .............................. 14 Section 2.4. Additional Security Documents ................................ 16 Section 2.5. Powers of Attorney ........................................... 16 Section 2.6. Copies of Letters and Documents .............................. 16


SECTION 3 ACTIONABLE DEFAULTS; REMEDIES ............................... 17 Section 3.1. Actionable Default ........................................... 17 Section 3.2. Remedies ..................................................... 17 Section 3.3. Right to Initiate Judicial Proceedings, etc .................. 18 Section 3.4. Appointment of a Receiver .................................... 19 Section 3.5. Exercise of Powers ........................................... 19 Section 3.6. Remedies Not Exclusive ....................................... 19 Section 3.7. Waiver of Certain Rights ..................................... 20 Section 3.8. Limitation on Trustee's Duties in Respect
of Collateral .............................................. 20 Section 3.9. Limitation by Law ............................................ 20 Section 3.10. Absolute Rights of the Beneficiaries ........................ 21


SECTION 4 COLLATERAL ACCOUNT; APPLICATION OF MONEYS ................... 21 Section 4.1. The Collateral Account ....................................... 21 Section 4.2. Grant of Security Interest; Control of
Collateral Account ......................................... 22 Section 4.3. Investment of Funds Deposited in Collateral
Account .................................................... 22 Section 4.4. Application of Moneys ........................................ 24


SECTION 5 AGREEMENTS WITH THE TRUSTEE ................................. 26 Section 5.1. Delivery of Debt Instruments ................................. 26 Section 5.2. Information as to Beneficiaries .............................. 26 Section 5.3. Compensation and Expenses .................................... 27 Section 5.4. Stamp and Other Similar Taxes ................................ 27 Section 5.5. Filing Fees, Excise Taxes, etc ............................... 28 Section 5.6. Indemnification .............................................. 28 Section 5.7. Further Assurances ........................................... 28


i


SECTION 6 THE TRUSTEE ................................................. 29 Section 6.1. Acceptance of Trust .......................................... 29 Section 6.2. Exculpatory Provisions ....................................... 29 Section 6.3. Delegation of Duties ......................................... 30 Section 6.4. Reliance by Trustee .......................................... 30 Section 6.5. Limitations on Duties of the Trustee ......................... 31 Section 6.6. Moneys to Be Held in Trust ................................... 32 Section 6.7. Resignation and Removal of the Trustee ....................... 32 Section 6.8. Status of Successors to the Trustee .......................... 34 Section 6.9. Merger of the Trustee ........................................ 34 Section 6.10. Additional Co-Trustees; Separate Trustees ................... 34


SECTION 7 RELEASE OF COLLATERAL ....................................... 36 Section 7.1. Conditions to Release of Collateral .......................... 36 Section 7.2. Actions Following Release of the Collateral .................. 36


SECTION 8 AGREEMENTS AMONG BENEFICIARIES .............................. 37 Section 8.1. Limited Subordination of Liens ............................... 37 Section 8.2. Bankruptcy Issues ............................................ 37 Section 8.3. Miscellaneous Agreements Among Beneficiaries ................. 38 Section 8.4. Cap on Principal Mutual Obligations .......................... 39 Section 8.5. Cap on Revolving Commitment Advances ......................... 39 Section 8.6. Payment of Trustee's Fees .................................... 40 Section 8.7. Assignment ................................................... 40 Section 8.8. Invalidation of Payments ..................................... 40 Section 8.9. Restrictions on the Admission of Other
Beneficiaries .............................................. 40


SECTION 9 MISCELLANEOUS ............................................... 42 Section 9.1. Amendments, Supplements and Waivers .......................... 42 Section 9.2. Notices ...................................................... 42 Section 9.3. Guaranties ................................................... 43 Section 9.4. Trust Funds Remittance Statutes .............................. 44 Section 9.5. Restricted Actions ........................................... 44 Section 9.6. Headings ..................................................... 44 Section 9.7. Severability ................................................. 44 Section 9.8. Dealings with the Debtor ..................................... 44 Section 9.9. Claims Against the Trustee ................................... 44 Section 9.10. Binding Effect .............................................. 45 Section 9.11. Conflict with Other Agreements .............................. 45 Section 9.12. Governing Law ............................................... 45 Section 9.13. Counterparts ................................................ 45


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SCHEDULES

Schedule 1: Centers
Schedule 2: Custodial Agents and Agreements
Schedule 3: Trade Names
Schedule 4: Deposit Accounts
Schedule 5: Locations of Collateral
Schedule 6: Financing Statements
Schedule 7-A: Form of Guaranty
Schedule 7-B: Form of Guaranty


EXHIBITS
Exhibit A: Form of Long Letter to Depositories
Exhibit B: Form of Short Letter to Depositories
Exhibit C: Form of Letter to Custodial Agents
Exhibit D: Form of Advance Request


iii


COLLATERAL TRUST AGREEMENT


This COLLATERAL TRUST AGREEMENT (this "Agreement") dated as of
--------- November 15, 1996 is by and among ACE CASH EXPRESS, INC. (doing business sometimes under the name of Ace America's Cash Express), a Texas corporation (the "Debtor"), AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., a New
------ York corporation ("AMEX"), PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa
---- corporation ("Principal Mutual"), and WILMINGTON TRUST COMPANY, a Delaware
---------------- banking corporation (the "Trustee"), and such other beneficiaries who may
------- become a party to this Agreement from time to time.


W I T N E S S E T H:


WHEREAS, the Debtor and AMEX have entered into the Master Agreement (as hereinafter defined) and the AMEX Security Agreement (as hereinafter defined);


WHEREAS, the Debtor and Principal Mutual have entered into the Principal Mutual Note Agreement (as hereinafter defined);


WHEREAS, the senior secured notes issued pursuant to the Principal Mutual Note Agreement in the initial aggregate principal amount of $20,000,000 (as such notes may be amended, restated, modified, replaced or extended from time to time, the "Notes") will, from time to time, be held by Principal Mutual
----- and/or other Persons (collectively, the "Noteholders");
-----------


WHEREAS, in consideration of AMEX entering into the Third Master Agreement Amendment (as hereinafter defined) and Principal Mutual entering into the Principal Mutual Note Agreement, the Debtor has agreed to enter into the Security Agreement (as hereinafter defined) with the Trustee to secure, subject to the terms and conditions of this Agreement and the Security Documents (as hereinafter defined), the payment of the Secured Debt (as hereinafter defined); and


WHEREAS, the closing of each of the Third Master Agreement Amendment and the Principal Mutual Note Agreement is conditioned upon this Agreement and the related Security Documents having been duly executed and delivered.


DECLARATION OF TRUST:


NOW, THEREFORE, to secure the payment, observance and performance of the Secured Debt and in consideration of the premises and the mutual agreements set forth herein, the Trustee does hereby declare that it holds as trustee in trust under this


Agreement all of its right, title and interest in, to and under all the following (and the Debtor does hereby consent thereto):


(A) the Assignment of Deposit Accounts and Security Agreement dated as
of the date hereof and the security interests granted to the Trustee
thereunder;


(B) the Uniform Commercial Code financing statements listed on
Schedule 6 hereto;
----------


(C) each agreement entered into and delivered, from time to time,
pursuant to Sections 2.4, 5.7 or 9.1(b) of this Agreement and the
------------ --- ------
collateral granted to the Trustee thereunder;


(D) the Guaranties;


(E) the Trust Agreement Collateral (as hereinafter defined); and


(F) the Proceeds (as hereinafter defined) of each of the foregoing.


TO HAVE AND TO HOLD the foregoing Security Documents and the Collateral (as hereinafter defined) and the Proceeds of any and all thereof (the right, title and interest of the Trustee in the Security Documents and the Collateral and such Proceeds being hereinafter referred to as the "Trust Estate") unto the
------------ Trustee and its successors in trust under this Agreement and its assigns and the assigns of its successors in trust forever.


IN TRUST NEVERTHELESS, under and subject to the terms and conditions set forth herein and in the Security Documents, and for the benefit of the Beneficiaries (as hereinafter defined) and for the enforcement of the payment of all Secured Debt, and for the performance of and compliance with the covenants and conditions of this Agreement, the Master Agreement, the Principal Mutual Note Agreement, each other Beneficiary Agreement (as hereinafter defined) and each of the Security Documents.


PROVIDED, HOWEVER, that these presents are upon the condition that if the Debtor, or its successors or assigns, shall satisfy all of the conditions set forth in Section 7 of this Agreement with respect to all or any part of the
--------- Collateral, as the case may be, then (if with respect to all of the Collateral) this Agreement, and the estates and rights assigned in the Security Documents, shall cease, determine and be void or (if with respect to part of the Collateral) this Agreement, and the estates and rights assigned in the Security Documents, shall cease, determine and be void with respect to such part of the Collateral; otherwise they shall remain and be in full force and effect.


2


IT IS HEREBY FURTHER COVENANTED AND DECLARED that the Trust Estate is to be held and applied by the Trustee, subject to the further covenants, conditions and trust hereinafter set forth.


SECTION 1


DEFINITIONS AND OTHER MATTERS


(a) As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


"Actionable Default" shall mean (i) with respect to AMEX, an AMEX Event
------------------
of Default exists or has occurred and, as a result thereof, there has been
an acceleration of the AMEX Obligations; (ii) with respect to the
Noteholders, a Principal Mutual Event of Default exists or has occurred and,
as a result thereof, there has been an acceleration of the Principal Mutual
Obligations; or (iii) with respect to any other Beneficiary, an Event of
Default (as defined in such other Beneficiary's Beneficiary Agreement)
exists or has occurred and, as a result thereof, there has been an
acceleration of such Beneficiary's Beneficiary Obligations.


"Advance Request" shall mean a written request substantially in the
---------------
form of Exhibit D hereto delivered by the Debtor to AMEX in accordance with
---------
the Master Agreement (with a copy delivered to the Trustee, and copies of
which shall be sent by the Trustee to each Beneficiary upon such
Beneficiary's request), pursuant to which the Debtor requests Advances,
provides current information concerning the Liquid Security Amount,
certifies that following such Advance the Coverage Ratio will not be less
than 1 to 1 and further certifies to the best of its knowledge the accuracy
of such information.


"Advances" shall mean, in addition to the Advances (as defined in the
--------
Master Agreement) outstanding as of the date hereof, the loans from time to
time advanced to the Debtor pursuant to Advance Requests delivered by the
Debtor to AMEX in accordance with the Master Agreement, which Advances shall
be for the purposes permitted by Section 3.4 of the Master Agreement as in
effect on the date hereof. Any loan or advance made to the Debtor pursuant
to an Advance Request shall be an Advance and AMEX shall have no obligation
or duty to any Person to verify or review the accuracy of the information
contained in such Advance Request.


3


"Affiliate" shall mean, with respect to any Person, any other Person
---------
which directly or indirectly controls, is controlled by or is under common
control with such Person.


"Agreement" shall mean this Collateral Trust Agreement, as it may be
---------
amended, restated or otherwise modified from time to time.


"AMEX" shall mean American Express Travel Related Services Company,
----
Inc., a New York corporation.


"AMEX Event of Default" shall have the meaning attributed to the term
---------------------
"Event of Default" set forth in Section 9 of the First Master Agreement
Amendment.


"AMEX Obligations" shall mean all existing and future obligations and
----------------
liabilities of the Debtor to AMEX and/or its assignee under the Master
Agreement, the AMEX Security Agreement and any and all other agreements,
documents and instruments heretofore, now or hereafter executed in
connection therewith or which relate thereto other than the principal amount
of Revolving Commitment Advances made in excess of $18.5 million (plus
interest, fees and expenses thereon) without the consent required pursuant
to Section 8.5 of this Agreement.
-----------


"AMEX Priority Fees and Expenses" shall mean such portion of the total
-------------------------------
fees and expenses incurred by AMEX in connection with the collection or
enforcement of the AMEX Obligations which on the date of distribution,
pursuant to Section 4.4 of this Agreement, shall equal the amount obtained
-----------
by multiplying the total of such fees and expenses by a fraction of which
the numerator is equal to the AMEX Priority Obligations (less all fees and
expenses incurred by AMEX) and the denominator is equal to the AMEX
Obligations (less all fees and expenses incurred by AMEX). For purposes of
this definition, fees and expenses incurred by AMEX shall not include any
penalties, premiums, commitment fees, breakage fees or similar types of
fees, if any, charged by AMEX.


"AMEX Priority Obligations" shall mean that portion of the AMEX
-------------------------
Obligations equal to the sum, without duplication, of (i) Trust Amount, plus
----
(ii) the outstanding unpaid balance of all Advances (provided that Advances,
--------
for the purpose of determining AMEX Priority Obligations, shall not exceed
the Maximum Advances), plus (iii) all accrued and unpaid interest (including
----
default interest) on the amounts in subsections (i) and (ii) of this
paragraph, plus (iv) the AMEX Priority Fees and Expenses.
----


4


"AMEX Security Agreement" shall have the meaning set forth in the
-----------------------
recitals to the Security Agreement.


"Approved Account" shall mean, with respect to any Depository, any of
----------------
the Deposit Accounts identified in, or listed on an exhibit to, an effective
letter agreement (substantially in the form of Exhibit A or B to this
--------- -
Agreement) executed by such Depository.


"Bankruptcy Code" shall mean the federal Bankruptcy Code, as amended
---------------
from time to time.


"Beneficiary" shall mean AMEX, each Noteholder, the Trustee and any
-----------
other Person for whose benefit there is now or hereafter granted a security
interest in the Collateral pursuant to the Security Agreement. For purposes
of determining the actions taken by a Beneficiary which is a Class of
Beneficiaries (other than the Noteholders), all of the Beneficiaries making
up such Class shall be deemed to have taken or be bound by any action
approved by the Required Beneficiaries of such Class.


"Beneficiary Agreement" shall mean the Master Agreement, the Principal
---------------------
Mutual Note Agreement and, with respect to any other Beneficiary, the
agreement between the Debtor and such Beneficiary under which such
Beneficiary agrees to loan money to the Debtor and, in return, such
Beneficiary agrees in writing to be bound by the provisions of this
Agreement and the Security Agreement.


"Beneficiary Obligations" shall mean the AMEX Obligations, the
-----------------------
Principal Mutual Obligations and all existing and future obligations and
liabilities of the Debtor to any and all Beneficiaries under all Beneficiary
Agreements and any and all agreements, documents and instruments executed in
connection therewith or which relate thereto other than (i) with respect to
AMEX, the principal amount of Revolving Commitment Advances made in excess
of $18.5 million (plus interest, fees and expenses thereon) without the
consent required pursuant to Section 8.5 of this Agreement, (ii) with
-----------
respect to Principal Mutual and the other Noteholders, the principal amount
advanced or loaned by Principal Mutual or any other Noteholder made in
excess of $20 million (plus interest, fees and expenses thereon) without the
consent required pursuant to Section 8.4 of this Agreement and (iii) with
-----------
respect to any other Beneficiary, the principal amount advanced or loaned by
such Beneficiary made in excess of the limitation agreed to by such
Beneficiary pursuant to Section 8.9(c)(Z) of this Agreement (plus interest,
-----------------
fees and expenses thereon) without the consent required by Section 8.9(d) of
--------------
this Agreement.


5


"Business Day" shall mean (i) any day excluding Saturday, Sunday and
------------
any day which is a legal holiday under the law of the State of New York or
Delaware or is a day on which banking institutions located in either such
State are required or authorized by law or other governmental action to
close, and (ii) a day of the year on which the Trustee is not required or
authorized to close.


"Centers" shall have the meaning set forth in Section 1.3 of the
-------
Security Agreement. All of the Debtor's Centers (which includes all
locations where the Debtor transacts business) are identified on Schedule 1
----------
hereto.


"Class" shall mean two or more Beneficiaries which hold Beneficiary
-----
Obligations arising out of the same Beneficiary Agreement.


"Collateral" shall have the meaning set forth in Section 1.5 of the
----------
Security Agreement.


"Collateral Account" shall have the meaning set forth in Section 4.1 of
------------------
this Agreement.


"Concentration Account" shall have the meaning set forth in Section 4.1
--------------------- -----------
of this Agreement.


"Coverage Ratio" shall mean the ratio of (a) the Liquid Security Amount
--------------
to (b) the sum of (i) the Trust Amount plus (ii) Advances.
----


"Custodial Agent" shall have the meaning set forth in Section 1.6 of
---------------
the Security Agreement. All of the Debtor's Custodial Agents and all of the
Debtor's agreements with its Custodial Agents are identified on Schedule 2
----------
hereto.


"Debt Instrument" shall mean any promissory note or other instrument,
---------------
document or agreement evidencing any Secured Debt.


"Debtor" shall mean Ace Cash Express Inc., a Texas corporation, and all
------
other trade names under which Ace Cash Express Inc. transacts business as
identified on Schedule 3 hereto.
----------


"Depository" shall mean each financial institution at which a Deposit
----------
Account is maintained.


"Deposit Accounts" shall have the meaning set forth in Section 1.9 of
----------------
the Security Agreement. All of the Debtor's Deposit Accounts are identified
on Schedule 4 hereto.
----------


6


"Distribution Dates" shall mean the Business Days fixed by the Trustee
------------------
(the first of which shall occur as soon as practicable but in no event more
than ninety (90) days after the giving of a Notice of Actionable Default
which has not theretofore been withdrawn and the balance of which shall, so
long as such Notice of Actionable Default shall not have been withdrawn, be
on the corresponding date (of if not a Business Day, the next Business Day)
in each calendar month thereafter) for the distribution of all moneys held
by the Trustee in the Collateral Account.


"First Data" shall mean First Data Corporation, a Delaware corporation.
----------


"First Master Agreement Amendment" shall have the meaning set forth in
--------------------------------
the recitals to the Security Agreement. "GAAP" shall mean United States
generally accepted accounting principles in effect at the applicable date.


"Governmental Authority" shall mean any nation or government, any state
----------------------
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.


"Guaranty" shall mean the guaranty executed by each of the Debtor's
Subsidiaries for the benefit of all Beneficiaries, which guaranty shall be
substantially in the form of Schedule 7-A or 7-B to this Agreement.
------------ ---


"Hurdle" shall equal $12,500,000.
------


"IPS" shall mean Integrated Payment Systems Inc., a Delaware
---
corporation.


"Liquid Security Amount" shall mean the sum of (i) the amount of
----------------------
collected balances and uncollected balances (represented by provisional
credits) in all bank accounts, deposits in transit (representing one day's
volume of checks cashed during weekday operations and up to three days'
volume of checks cashed during weekend and holiday operations), other cash
equivalents, negotiable instruments and other instruments and liquid assets
of the Debtor in which the Trustee shall have been granted a security
interest (excluding any such instruments or assets as may be related to
consumer loans), plus (ii) the amount of cash at the end of each day in the
Debtor's locations at which Money Orders are sold, but excluding the
aggregate sum of any cash that the Debtor is prevented by agreement from
pledging to any Person.


7


"Locations of Collateral" shall include all the properties on which
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