<PAGE> 1
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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)
November 17, 1999
Advanta Conduit Receivables, Inc.
(Exact name of registrant as specified in its charter)
Nevada 333-75295 88-0360305
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
Attention: General Counsel
10790 Rancho Bernardo Drive
San Diego, California 92127
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code (858) 676-3099
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Advanta Conduit Receivables, Inc., as Sponsor
on behalf of Advanta Mortgage Loan Trust 1999-4
-----------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 333-75295-01 88-0360305
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(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
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(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
Advanta Conduit Receivables, Inc. (the "Registrant" or the
"Sponsor") registered an issuance of $1,699,051,007.20 in principal amount of
Mortgage Loan Asset-Backed Certificates on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"),
by the Registration Statement on Form S-3 (File No. 333-75295) (the
"Registration Statement").
Pursuant to the Registration Statement, the Sponsor formed Advanta
Mortgage Loan Trust 1999-4 (the "Trust") which issued approximately $200,000,000
in aggregate principal amount of its Mortgage Loan Asset-Backed Notes (the
"Notes"), on November 17, 1999 (the "Closing Date").
This Current Report on Form 8-K is being filed to satisfy an
undertaking to file copies of certain opinions issued in connection with the
issuance of the Certificates, the forms of which were filed as Exhibits to the
Registration Statement.
The primary assets of the Trust are pool of closed-end mortgage
loans ("Mortgage Loans"), used predominantly to refinance an existing mortgage
loan on more favorable terms, to consolidate debt or to obtain cash proceeds by
borrowing against the related borrower's equity in the real property and
improvements pledged to secure the related Mortgage Loan, secured primarily by
mortgages on single-family residences (which may be detached, part of a two- to
four-family dwelling, a condominium unit or a unit in a planned unit
development) which were conveyed to the Trust on the Closing Date. As of the
Closing Date, the Mortgage Loans had the characteristics described in the
Prospectus dated August 10, 1999 and the Prospectus Supplement dated November 5,
1999 filed pursuant to Rule 424(b)(5) of the Act with the Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits:
5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated August 17, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated
August 17, 1999.
<PAGE> 3
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 thereunto duly authorized.
ADVANTA CONDUIT RECEIVABLES, INC.
By: /s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
ADVANTA CONDUIT RECEIVABLES, INC., as Sponsor on behalf
of Advanta Mortgage Loan Trust 1999-4.
By: /s/ Michael Coco
------------------------------
Name: Michael Coco
Title: Vice President
Dated: November 17, 1999
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated as of November 17, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated as of
November 17, 1999.
</TABLE>
<PAGE> 1
Exhibit 5.1
<PAGE> 2
November 17, 1999
To the Addressees Listed on the Appendix hereto:
Re: Advanta Mortgage Loan Trust 1999-4
Ladies and Gentlemen:
We have acted as special counsel to Advanta National Bank, a
national banking association ("ANB"), Advanta Finance Corp, a Nevada corporation
("AFC"), Advanta Mortgage Corp. USA, a Delaware corporation ("AMCUSA"), as
master servicer (the "Master Servicer") and as originator (ANB, AFC, and AMCUSA
together being the "Originators"), Advanta Conduit Receivables, Inc., a Nevada
corporation, (the "Sponsor"), and Advanta Mortgage Holding Corporation, a
Delaware corporation ("AMHC"), in connection with the issuance and sale of
$200,000,000 aggregate principal amount of Mortgage Loan Asset-Backed Notes,
Series 1999-4, (the "Notes") by the Advanta Mortgage Loan Trust 1999-4 (the
"Trust") and the execution and delivery of the following documents:
(i) Sale and Servicing Agreement dated as of November 1, 1999
(the "Sale and Servicing Agreement") among the Sponsor, the Master
Servicer, Advanta Holding Trust 1999-4 (the "Holding Trust"), the Trust
and Bankers Trust Company of California, N.A., a national banking
association, as indenture trustee (the "Indenture Trustee");
(ii) Underwriting Agreement dated November 5, 1999 (the
"Underwriting Agreement") between the Sponsor and Bear, Stearns & Co.
Inc., as the Representative of the Underwriters (the "Representative");
(iii) Indenture dated as of November 1, 1999 (the "Indenture")
between the Trust and the Indenture Trustee;
(iv) Trust Agreement dated as of November 1, 1999 (the
"Holding Trust Agreement") between the Sponsor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee");
(v) Trust Agreement dated as of November 1, 1999 (the "Trust
Agreement") among the Sponsor, the Holding Trust, as depositor, and the
Owner Trustee;
(vi) Insurance and Indemnity Agreement dated as of November
17, 1999 (the "Insurance Agreement") among the Sponsor, the Indenture
Trustee, the Trust, the Holding Trust, the Master Servicer and Ambac
Assurance Corporation, as insurer (the "Insurer");
(vii) Indemnification Agreement dated as of November 5, 1999
(the "Indemnification Agreement") among Bear, Stearns & Co. Inc. and SG
Cowen Securities Corporation (the "Underwriters") and the Insurer;
<PAGE> 3
(viii) Mortgage Loan Transfer Agreement dated as of November
1, 1999 (the "Mortgage Loan Transfer Agreement") among the Originators,
the Indenture Trustee and the Sponsor; and
(ix) Two letter agreements executed and delivered by AMHC, one
of which is dated November 17, 1999 and is addressed to the
Representative and the Insurer, and one of which is dated November 17,
1999 and is addressed to the Trust and the Insurer, pursuant to which
AMHC acknowledges its joint-and-several liability with respect to
certain of the Sponsor's obligations to the Underwriters, the Trust and
the Insurer (collectively, the "AMHC Guaranties").
Capitalized terms used herein, but not defined, shall have the
meanings assigned to them in the Sale and Servicing Agreement.
We have examined executed copies of the Sale and Servicing
Agreement, the Indenture, the Holding Trust Agreement, the Trust Agreement, the
Mortgage Loan Transfer Agreement, the Underwriting Agreement, the
Indemnification Agreement and the Insurance Agreement (collectively, the
"Documents") and of the AMHC Guaranties. We have also examined a copy of the
executed Notes. We have also examined the Registration Statement (333-75295)
filed with the Securities and Exchange Commission (the "Commission") on Form
S-3, in the form in which such Registration Statement was declared effective,
the Prospectus dated August 10, 1999 and the Prospectus Supplement dated
November 5, 1999 (together, the "Prospectus") relating to the Notes.
We have also examined originals or photostatic or certified
copies of all such corporate records of the Sponsor, the Master Servicer, the
Originators, and AMHC and such certificates of public officials, certificates of
corporate officers, and other documents, and such questions of law, as we have
deemed relevant and necessary as a basis for the opinions hereinafter expressed.
As to certain issues of fact material to the opinions expressed herein, we have,
with your consent, relied to the extent we deemed appropriate upon certificates
and representations of officers of the Sponsor, the Master Servicer, the
Originators and AMHC. In making our examinations and rendering the opinions
herein expressed, we have made the following assumptions:
(1) each party to each of the Documents (other than the
Sponsor, the Master Servicer, the Originators and AMHC, as applicable)
has the corporate power to enter into and perform all of its
obligations thereunder;
(2) the due authorization, execution and delivery of the
Documents by all parties thereto (other than the Sponsor, the Master
Servicer, the Originators and AMHC, as applicable) and the validity and
binding effect on all parties (other than the Sponsor, the Master
Servicer, the Originators and AMHC, as applicable or as otherwise
expressed herein) of each of the Documents;
(3) the genuineness of all signatures;
(4) the authenticity of all documents submitted to us as
originals and the conformity to originals of all documents submitted to
us as copies; and
<PAGE> 4
(5) as to Paragraph 29 below, we assume that the parties to
the Documents have and will perform their respective obligations
thereunder, including the delivery to the Indenture Trustee of the
Mortgage Notes relating to the Mortgage Loans following payment of
legal and sufficient consideration therefor, without any such Mortgage
Note having been discharged or the related Mortgage satisfied or
released and without the Indenture Trustee having actual or
constructive notice of the existence with respect to the Mortgage Notes
and Mortgages of any claim, lien, charge, mortgage, security interest,
encumbrance or right of the Sponsor, the Originators, or creditors of
the Sponsor, the Originators or others. Further we have assumed the
absence of any defense against enforcement of, or right of offset
against, each such Mortgage Note and the related Mortgage. We have
undertaken no independent review of the Mortgage Notes, including the
Mortgage Loans and the Mortgages and have relied solely upon the
representations of the Sponsor and of the Originators in the Sale and
Servicing Agreement and the Mortgage Loan Transfer Agreement that they
have title to the Mortgage Loans.
We have further assumed that the Mortgages and rights to
receive payment under the Mortgage Loans are not subject to any right, lien or
interest of any government or any agency or instrumentality thereof (including
without limitation any federal or state tax lien, or lien arising under Title IV
of ERISA) and that they are not subject to any lien arising by operation of law
or any judicial lien.
The opinions expressed in paragraphs 5, 7, 9, 11 and 13 with
respect to the enforceability of certain agreements are subject to the following
additional qualifications:
(a) The effect of bankruptcy, insolvency, reorganization,
moratorium, receivership, or other similar laws of general
applicability relating to or affecting creditors' rights generally or
the rights of creditors of national banking associations in the event
of bankruptcy, insolvency, reorganization, moratorium or receivership.
(b) The application of general principles of equity,
including, but not limited to, the right of specific performance
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
In addition, we wish to advise you that the enforceability of
certain provisions set forth in the Underwriting Agreement and the Insurance
Agreement which purport to provide for indemnification for losses due to
securities laws violations may be limited by public policy considerations.
We are admitted to the Bars of the States of New York and
California, and we express no opinion as to the laws of any other jurisdiction
except as to matters that are governed by federal law and the corporate and
other applicable laws of the States of Delaware and Nevada. With respect to the
corporate laws of the States of Delaware and Nevada, the opinions expressed
below are based solely on our review of statutes as in effect in those States
and judicial decisions with respect thereto. All opinions expressed herein are
based on laws, regulations and policy guidelines currently in force and may be
affected by future regulations. Furthermore, no opinion is expressed herein
regarding the applicable state Blue Sky, legal investment or real estate
syndication laws.
<PAGE> 5
Based upon the foregoing and subject to the last paragraph
hereof, we are of the opinion that:
1. The Sponsor has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Nevada, and is qualified to do business in each state necessary to
enable it to perform its obligations under the Mortgage Loan Transfer
Agreement, the Sale and Servicing Agreement, the Trust Agreement, the
Holding Trust Agreement, the Insurance Agreement and the Underwriting
Agreement. The Sponsor has the requisite power and authority to execute
and deliver, engage in the transactions contemplated by, and perform
and observe the conditions of the Mortgage Loan Transfer Agreement, the
Sale and Servicing Agreement, the Trust Agreement, the Holding Trust
Agreement, the Insurance Agreement and the Underwriting Agreement.
2. The Master Servicer has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, and is qualified to do business in each state necessary to
enable it to perform its obligations under the Insurance Agreement and
the Sale and Servicing Agreement. The Master Servicer has the requisite
power and authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of the Sale and
Servicing Agreement and the Insurance Agreement.
3. Each Originator has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and is qualified to do business in each state necessary
to enable it to perform its obligations under the Documents to which
they are a party. Each Originator has the requisite power and authority
to execute and deliver, engage in the transactions contemplated by, and
perform and observe the conditions of the Documents to which they are a
party.
4. Each of the Mortgage Loan Transfer Agreement, the Sale and
Servicing Agreement, the Insurance Agreement, the Holding Trust
Agreement, the Trust Agreement and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Sponsor, all
requisite corporate action having been taken with respect thereto.
5. Each of the Sale and Servicing Agreement, the Mortgage Loan
Transfer Agreement, the Insurance Agreement, the Holding Trust
Agreement, the Trust Agreement and the Underwriting Agreement
constitutes the valid, legal and binding agreement of the Sponsor, and
is enforceable against the Sponsor in accordance with its terms.
6. Each of the Sale and Servicing Agreement and the Insurance
Agreement has been duly and validly authorized, executed and delivered
by the Master Servicer, all requisite corporate action having been
taken with respect thereto.
7. Each of the Sale and Servicing Agreement and the Insurance
Agreement constitutes the valid, legal and binding agreement of the
Master Servicer, and is enforceable against the Master Servicer, in
accordance with its terms.
<PAGE> 6
8. Each of the Documents to which they are a party has been
duly and validly authorized, executed and delivered by each Originator,
all requisite corporate action having been taken with respect thereto.
9. Each of the Documents to which they are a party constitutes
the legal, valid and binding agreement of the Originators and is
enforceable against the Originators in accordance with its terms.
10. AMHC has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
and is qualified to do business in each state necessary to enable it to
perform its obligations under the AMHC Guaranties and where the conduct
of its business requires qualification AMHC has the requisite power and
authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of, the AMHC
Guaranties.
11. Each of the Documents to which they are a party
constitutes the legal, valid and binding agreement of the Trust and the
Holding Trust, respectively, and is enforceable against the Trust and
the Holding Trust, respectively, in accordance with its terms.
12. The AMHC Guaranties have been duly and validly authorized,
executed and delivered by AMHC, all requisite corporate action having
been taken with respect thereto.
13. Each of the AMHC Guaranties constitutes the valid, legal
and binding agreement of AMHC, and is enforceable against AMHC in
accordance with its terms.
14. The Notes, assuming the due execution by the Trust and due
authentication by the Indenture Trustee and payment therefor, are
validly issued and outstanding and are entitled to the benefits of the
Indenture.
15. With respect to the Mortgage Loans, the endorsement and
delivery of each Mortgage Note, and the preparation, delivery and
recording of an Assignment in each case with respect to each Mortgage
is sufficient to fully transfer to the Trust for the benefit of the
owners of the Notes all, right, title and interest of the Sponsor in
the Mortgage Note and Mortgage, as noteholder and mortgagee or assignee
thereof, subject to any exceptions set forth in such opinion, and will
be sufficient to permit the Trust to avail itself of all protection
available under applicable law against the claims of any present or
future creditors of the Sponsor and to prevent any other sale,
transfer, assignment, pledge or other encumbrance of the Mortgage Loans
by the Sponsor from being enforceable.
16. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court or other tribunal is required under federal laws or the laws
of the States of New York, Delaware and California, for the execution,
delivery and performance of either the Sale and Servicing Agreement or
of the Insurance Agreement or the consummation of any other transaction
contemplated thereby by the Master Servicer, except such which have
been obtained.
<PAGE> 7
17. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court or other tribunal is required under federal laws or the laws
of the States of New York, Nevada and California, for the execution,
delivery and performance of any of the Sale and Servicing Agreement,
the Underwriting Agreement, the Holding Trust Agreement, the Trust
Agreement, the Mortgage Loan Transfer Agreement and the Insurance
Agreement or the consummation of any other transaction contemplated
thereby by the Sponsor, except such which have been obtained.
18. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under federal laws or the laws of the States of
New York, Delaware, Nevada and California, for the execution, delivery
and performance of the Documents to which they are a party or the
consummation of any other transaction contemplated thereby by the
Originators, except such which have been obtained.
19. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under federal laws or the laws of the States of
New York, Delaware and California, for the execution, delivery and
performance of the AMHC Guaranties by AMHC, except such which have been
obtained.
20. To the best of our knowledge, following due inquiry made
of the appropriate officers of the Sponsor, the Master Servicer and the
Originators, there are no actions, proceedings or investigations
pending or, to our knowledge, threatened against the Sponsor, the
Master Servicer or the Originators before any court, governmental
agency or body or other tribunal (a) asserting the invalidity of the
Documents or the Notes, (b) seeking to prevent the issuance of the
Notes or the consummation of any of the transactions contemplated by
the Documents, or (c) which would materially and adversely affect the
performance by the Sponsor, the Master Servicer or the Originators, as
applicable, of obligations under, or the validity or enforceability of,
the Documents or the Notes.
21. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Notes, or the execution, delivery or
performance by the Master Servicer of the Sale and Servicing Agreement
and the Insurance Agreement (a) conflicts or will conflict with or
results or will result in a breach of, or constitutes or will
constitute a default under (i) any term or provision of the certificate
of incorporation or bylaws of the Master Servicer; (ii) any term or
provision of any material agreement, contract, instrument or indenture,
to which the Master Servicer, is a party or is bound which has been
identified to us by an officer or representative of the Master
Servicer; (iii) any order, judgment, writ, injunction or decree of any
court or governmental agency or body or other tribunal having
jurisdiction over the Master Servicer which has been identified to us
by an officer or representative of the Master Servicer; or (iv) any
law, rule or regulation of the States of New York, California or
Delaware or the federal government (including, without limitation, any
bulk sales law), or (b) results in, or will result in, the creation or
imposition of any lien, charge or encumbrance upon the Trust Estate or
upon the Notes, except as otherwise contemplated by the Indenture.
22. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Notes, or the execution, delivery or
performance by any Originator of the Documents to which any of them is
a party (a) conflicts or will conflict with or results or will result
in a
<PAGE> 8
breach of, or constitutes or will constitute a default under (i) any
term or provision of the certificate of incorporation or bylaws of any
Originator; (ii) any term or provision of any material agreement,
contract, instrument or indenture, to which any Originator is a party
or is bound, which has been identified to us by appropriate officers of
any Originator; (iii) any order, judgment, writ, injunction or decree
of any court or governmental agency or body or other tribunal having
jurisdiction over any Originator, which has been identified to us by
appropriate officers of any Originator; or (iv) any law, rule or
regulation of the States of New York, California, Nevada or Delaware or
the federal government, or (b) results or will result in the creation
or imposition of any lien, charge or encumbrance upon the Trust Estate,
except as otherwise contemplated by the Indenture.
23. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Notes, or the execution, delivery or
performance by the Sponsor of the Sale and Servicing Agreement, the
Mortgage Loan Transfer Agreement, the Holding Trust Agreement, the
Trust Agreement, the Insurance Agreement and the Underwriting Agreement
(a) conflicts or will conflict with or results or will result in a
breach of, or constitutes or will constitute a default under (i) any
term or provision of the certificate of incorporation or bylaws of the
Sponsor; (ii) any term or provision of any material agreement,
contract, instrument or indenture, to which the Sponsor is a party or
is bound, which has been identified to us by appropriate officers of
the Sponsor; (iii) any order, judgment, writ, injunction or decree of
any court or governmental agency or body or other tribunal having
jurisdiction over the Sponsor, which has been identified to us by
appropriate officers of the Sponsor; or (iv) any law, rule or
regulation of the States of New York, California or Nevada or the
federal government, or (b) results or will result in the creation or
imposition of any lien, charge or encumbrance upon the Trust Estate,
except as otherwise contemplated by the Indenture.
24. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Notes, or the execution, delivery or
performance by the Holding Trust of the Documents to which it is a
party (a) conflicts or will conflict with or results or will result in
a breach of, or constitutes or will constitute a default under (i) any
term or provision of the organization documents of the Holding Trust;
(ii) any term or provision of any material agreement, contract,
instrument or indenture, to which the Holding Trust is a party or is
bound, which has been identified to us by appropriate officers of the
Holding Trust; (iii) any order, judgment, writ, injunction or decree of
any court or governmental agency or body or other tribunal having
jurisdiction over the Holding Trust, which has been identified to us by
appropriate officers of the Holding Trust; or (iv) any law, rule or
regulation of the States of New York or Delaware or the federal
government, or (b) results or will result in the creation or imposition
of any lien, charge or encumbrance upon the Trust Estate, except as
otherwise contemplated by the Indenture.
25. The execution, delivery or performance by AMHC of the AMHC
Guaranties does not conflict with or will not conflict with and does
not result or will not result in a breach of, and does not constitute
or will not constitute a default under: (i) any term or provision of
the certificate of incorporation or bylaws of AMHC; (ii) any term or
provision of any material agreement, contract, instrument or indenture,
to which AMHC is a party or is bound, which have been identified to us
by appropriate officers of AMHC; (iii) any order,
<PAGE> 9
judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over AMHC, which have been identified to
us by appropriate officers of AMHC; or (iv) any law, rule or regulation
of the States of New York, Delaware, Nevada or California or the
federal government.
26. To the best of our knowledge, following due inquiry made
of the appropriate officers of AMHC, there are no actions, proceedings
or investigations pending or to our knowledge threatened against AMHC
before any court, administrative agency or other tribunal (a) asserting
the invalidity of the AMHC Guaranties, (b) seeking to prevent the
consummation of any of the transactions contemplated by the AMHC
Guaranties, or (c) which would materially and adversely affect the
performance by AMHC of obligations of the AMHC Guaranties.
27. The Registration Statements and the Prospectus (other than
the financial and statistical data included therein, as to which we are
not called upon to express any opinion), including the Incorporated
Documents, at the time the Registration Statements became effective and
as of the date of execution of the Underwriting Agreement comply as to
form in all material respects with the requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and the rules and regulations
thereunder, and the Exchange Act and the rules and regulations
thereunder, and we do not know of any amendment to the Registration
Statement required to be filed, or of any contracts, indentures or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be described in the
Registration Statement or the Prospectus, which has not been filed or
described as required.
28. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended. Neither the Holding Trust nor the
Trust is required to be registered pursuant to the Investment Company
Act of 1940, as amended.
29. The Indenture, upon execution and delivery, is effective
to create a valid and enforceable security interest in favor of the
Indenture Trustee, for the benefit of the Noteholders and the Insurer,
in all of the Trust's right, title and interest in the Mortgage Loans.
30. The security interest in favor of the Indenture Trustee,
for the benefit of the Noteholders and the Insurer, will constitute a
first priority perfected security interest upon the delivery of the
Mortgage Files to the Indenture Trustee, on behalf of the Noteholders,
and the recording of instruments in accordance with the provisions of
the Sale and Servicing Agreement; provided, however, that we express no
opinion (a) as to the continuation of a security interest in the
Mortgage Notes in the event that the Indenture Trustee relinquishes
possession of the Mortgage Notes, (b) as to the continuation of a
security interest in the Mortgage Notes or the Mortgages in the event
the related Originator discharges or releases the Mortgage Notes or the
Mortgages prior to delivery of the Mortgage Notes to the Indenture
Trustee and the recording of instruments of assignment in respect of
the Mortgages in the appropriate recording offices, (c) as to title in
any Mortgaged Property or the existence of priority in any lien with
respect to such property or as the to the enforceability of any remedy
that may be dependent on that title or such lien,
<PAGE> 10
or (d) as to the priority of any security interest against any liens,
claims or other interest that by operation of law take priority over
previously perfected security interest (including, in certain
circumstances, certain federal and state tax liens, liens arising under
the Employee Retirement Income Security Act of 1974, as amended, and
certain claims of the United States Government). Our conclusion that
the security interest described in above would be a "first priority
perfected security interest" is based upon (x) the Indenture Trustee's
certification, delivered on the date hereof, to the effect that the
Indenture Trustee has received the endorsed Mortgage Notes, (y) the
mortgage assignment recording requirements of the Sale and Servicing
Agreement, and (z) representations of the Originators in the Sale and
Servicing Agreement. We further note that, until such time as
assignments of mortgage are recorded in the name of the Indenture
Trustee in the appropriate jurisdictions, (x) the Indenture Trustee may
not, in certain jurisdictions, be independently able to enforce the
Mortgage against the related Property or the related Mortgagor, (y) the
Originators could record an assignment of a Mortgage in the name of a
third party or record a discharge and satisfaction of a Mortgage and
(z) any notices which may be given to the record holder of a Mortgage
would be given to the Originators.
31. Except as to any financial or statistical data contained
in the Registration Statement, the statements set forth in the
Prospectus under the captions "The Note Insurer" and "The Policy" and
Annex I to the Prospectus, as to which we are not called upon to
express any opinion or belief, to the best of our knowledge, the
Registration Statement does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
32. The statements in the Prospectus set forth under the
captions "Description of the Notes" and "Provisions of the Agreements,"
to the extent such statements purport to summarize certain provisions
of the Notes or of the Indenture or the Sale and Servicing Agreement,
are fair and accurate in all material respects.
33. The statements in the Prospectus set forth under the
captions "ERISA Considerations," "Material Federal Income Tax
Consequences" and "Legal Matters," to the extent that they constitute
matters of federal, New York or California law, or federal, New York or
California legal conclusions, provide a fair and accurate summary of
such law or conclusions.
34. To the best of our knowledge, the Commission has not
issued any stop order suspending the effectiveness of the Registration
Statement or any order directed to any prospectus or prospectus
supplement relating to the Notes (including the Prospectus), and has
not initiated or threatened any proceeding for that purpose.
35. The provision in the Sale and Servicing Agreement which
provides for the laws of New York to be the governing law would be
upheld by a court applying New York or California law, or, if not
upheld, then such court applying New York or California law would hold
that California law is the governing law for the Sale and Servicing
Agreement.
Assuming that the Trust's acquisition of any Subsequent
Mortgage Loan is effected in accordance with the provisions of the Sale and
Servicing Agreement, our opinions set forth
<PAGE> 11
above refer to such Subsequent Mortgage Loans as well as the Initial Mortgage
Loans held by the Trust.
We have rendered legal advice and assistance to the
Originators, the Sponsor and the Master Servicer in the course of the
preparation of the Registration Statement, the Prospectus, the Prospectus
Supplement, and other matters relating to the sale of the Notes. Rendering such
assistance involved, among other things, discussions and inquiries concerning
various legal and related subjects and reviews of certain records, documents,
opinions and certificates in accordance with instructions of the Originators,
the Sponsor and the Master Servicer. We also participated with the Originators,
the Sponsor and the Master Servicer in conference with representatives of the
Representative and its counsel during which the contents of the Registration
Statement, the Prospectus, the Prospectus Supplement and related matters were
discussed. Although we are not passing upon, and do not assume responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus and the Prospectus Supplement, in the
course of our examination of the Registration Statement, the Prospectus, the
Prospectus Supplement and certain other documents and our participation in the
discussions hereinabove mentioned, no facts have come to our attention which
lead us to believe that the Registration Statement, the Prospectus and the
Prospectus Supplement (other than the financial statements and other financial
and statistical data contained therein, as to which we are not called upon to
express any belief), at the time the Registration Statement became effective,
contained any untrue statement of material fact or omitted to state a material
fact necessary in order to make the statements therein not misleading, or that
the Prospectus and the Prospectus Supplement (other than the financial
statements and other financial and statistical data contained therein, as to
which we are not called upon to express any belief) as of its date and on the
date hereof contain or contains any untrue statement of a material fact, or
omits to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
This opinion is furnished by us as special counsel to the
Sponsor, the Originators, the Master Servicer and AMHC and is solely for the
benefit of the addressees hereof and their respective counsel. It may not be
relied upon by any other person or for any other purpose without our prior
written consent.
Very truly yours,
/s/ Dewey Ballantine
<PAGE> 12
APPENDIX
Advanta Conduit Receivables, Inc. Advanta Finance Corp.
10790 Rancho Bernardo Drive 10790 Rancho Bernardo Drive
San Diego, California 92127 San Diego, California 92127
Advanta Mortgage Corp. USA Bear, Stearns & Co., Inc.
10790 Rancho Bernardo Drive as Representative of the Underwriters
San Diego, California 92127 245 Park Avenue
New York, New York 10167
Ambac Assurance Corporation Bankers Trust Company of
One State Street Plaza California, N.A.,
New York, New York 10004 as Indenture Trustee
1761 E. St. Andrew Place
Santa Ana, California 92705
Moody's Investors Service, Inc. Standard & Poor's
99 Church Street Rating Services
New York, NY 10007 55 Water Street
New York, New York 100
Advanta National Bank
Brandywine Corporate Center
650 Naamans Road
Claymont, DE 19703
Advanta Mortgage
Loan Trust 1999-4
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Wilmington Trust Company,
as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
<PAGE> 1
Exhibit 8.1
<PAGE> 2
November 17, 1999
To the Addressees Listed
on Schedule I hereto
Re: Advanta Mortgage Loan Trust 1999-4
Mortgage Loan Asset-Backed Notes Series 1999-4
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the
issuance and delivery of the certain asset-backed notes denominated Advanta
Mortgage Loan Trust 1999-4, Mortgage Loan Asset-Backed Notes, Series 1999-4,
(the "Notes") pursuant to an Indenture dated as of November 1, 1999 (the
"Indenture) between Advanta Mortgage Loan Trust 1999-4 (the "Trust") and Bankers
Trust Company of California N.A., as indenture trustee (the "Indenture
Trustee").
As special tax counsel, we have examined such documents as we
deemed appropriate for the purposes of rendering the opinions set forth below,
including the following: (a) the Prospectus dated August 10, 1999 and the
Prospectus Supplement dated November 5, 1999 (together the "Prospectus") with
respect to the Notes and (b) an executed copy of the Indenture and the exhibits
attached thereto. Capitalized terms used in this opinion letter and not defined
herein shall have their respective meanings as set forth in Annex A to the Sale
and Servicing Agreement.
We have examined the question of whether the Notes will be
treated as indebtedness for federal income tax purposes. Our analysis is based
on provisions of the Internal Revenue Code of 1986, as amended, the Treasury
Regulations promulgated thereunder as in effect on the date hereof and on
existing judicial and administrative interpretations thereof. These authorities
are subject to change and to differing interpretations, which could apply
retroactively. The opinion of special tax counsel is not binding on the courts
or the Internal Revenue Service ("IRS"). Moreover, our analysis is based on
factual investigations which reveal that the parties have stated unambiguously
their intention to treat the Notes as indebtedness for federal income tax
purposes.
In general, whether instruments such as the Notes constitute
indebtedness for federal income tax purposes is a question of fact, the
resolution of which is based primarily upon the economic substance of the
instruments and the transaction pursuant to which they are issued rather than
the form of the transaction or the manner in which the instruments are labeled.
The IRS and the courts have set forth various factors to be taken into account
in determining whether or not a transaction constitutes the issuance of
indebtedness for federal income tax purposes, which we have reviewed as they
apply to this transaction.
Based on our analysis of such factors as applied to the
economic substance of this transaction, certain representations made by Advanta
Mortgage Corp. USA, Advanta Conduit Receivables, Inc. and Bear, Stearns & Co.,
Inc., and such other legal and factual investigations as we have deemed
appropriate, we are of the opinion that for federal income tax purposes: (a) the
<PAGE> 3
Notes will be treated as indebtedness, and not as an ownership interest in the
Mortgage Loans or an equity interest in the Trust and (b) so long as no election
to the contrary is made on Form 8832 or otherwise, the Trust will not be treated
as an association (or a publicly traded partnership) taxable as a corporation or
a taxable mortgage pool.
Assuming that the Trust's acquisition of any Subsequent
Mortgage Loan is effected in accordance with the provisions of the Sale and
Servicing Agreement, our opinions set forth above refer to such Subsequent
Mortgage Loans as well as the Initial Mortgage Loans held by the Trust.
We express no opinion on any matter not discussed in this
letter. This opinion letter is rendered as of the Closing Date, at the request
of the Sponsor, for the sole benefit of each addressees hereof, and no other
person or entity is entitled to rely hereon without our prior written consent.
Copies of this opinion letter may not be furnished to any other person or
entity, nor may any portion of this opinion letter be quoted, circulated or
referred to in any other document, without our prior written consent.
Very truly yours,
/s/ Dewey Ballantine
<PAGE> 4
SCHEDULE I
<TABLE>
<S> <C>
Bear, Stearns & Co., Inc. Ambac Assurance Corporation
as Representative of the Underwriters One State Street Plaza
245 Park Avenue New York, New York 10504
New York, New York 10167
Advanta Mortgage Corp. USA Moody's Investors Service, Inc.
10790 Rancho Bernardo Drive 99 Church Street
San Diego, California 92127 New York, New York 10007
Advanta Conduit Receivables, Inc. Bankers Trust Company of California, N.A.,
10790 Rancho Bernardo Drive as Indenture Trustee
San Diego, California 92127 1761 E. St. Andrew Place
Santa Ana, California 92705
Standard & Poor's Ratings Services, Advanta Mortgage
55 Water Street Loan Trust 1999-4
New York, New York 10041 c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
</TABLE>
