DISTRIBUTION AGREEMENT
AGREEMENT
made as of March 31, 2009 among PNC Absolute Return Master Fund LLC, PNC
Absolute Return Fund LLC, PNC Absolute Return TEDI Fund LLC, PNC Alternative
Strategies Master Fund LLC, PNC Alternative Strategies Fund LLC, PNC
Alternative Strategies TEDI Fund LLC, PNC Long-Short Master Fund LLC, PNC
Long-Short Fund, LLC, PNC Long-Short TEDI Fund LLC , each a Delaware limited
liability company, having an xxxxxx xx Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000 (each, a “Fund”), and PNC Fund Distributor, Inc., a Delaware corporation,
having an office at 00 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
Distributor”).
WHEREAS,
the Fund is a closed-end management investment company, organized as a Delaware
limited liability company and registered with the Securities and Exchange
Commission (the “Commission”) under the Investment Company Act of 1940, as
amended (the “1940 Act”); and
WHEREAS,
it is intended that Distributor act as the distributor of the limited liability
company interests (“Interests”) of the Fund.
NOW,
THEREFORE, in consideration of the mutual premises and covenants herein set
forth, the parties agree as follows:
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1.
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Services as
Distributor.
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1.1 Distributor
will act as agent of the Fund for the distribution of the Interests covered by
the registration statement of Fund then in effect under the Securities Act of
1933, as amended (the “Securities Act”), and the 1940 Act, and will perform the
services set forth on Schedule A to this Agreement. As used in this
Agreement, the term “registration statement” shall mean the registration
statement of the Fund, then in effect, including Parts A (the “Prospectus”) and
C of each registration statement, as filed on Form N-2, or any successor form
thereto, with the Commission, together with any amendments
thereto. The term “Prospectus” shall mean the then-current form of
Prospectus used by the Fund, in accordance with the rules of the Commission, for
delivery to shareholders and prospective shareholders after the effective dates
of the above-referenced registration statement, together with any amendments and
supplements thereto. The Fund will notify Distributor in advance of
any proposed changes to the Prospectus. The Distributor’s
distribution of the Interests will be on a “best efforts” basis.
1.2 Consistent
with the Fund’s limited liability company agreement (the “LLC Agreement”), the
registration statement, this Agreement and any other written understanding
between the Fund and the Distributor, Distributor shall solicit orders for the
sale of the Interests and may undertake such advertising and promotion as it
believes reasonable in connection with such solicitation. The Fund
understands that Distributor is now and may in the future be the distributor of
the shares of many other investment companies or series, including investment
companies having investment objectives similar to those of the
Fund. The Fund further understands that shareholders and potential
shareholders in the Fund may invest in shares of such other investment
companies. The Fund agrees that Distributor’s duties to other
investment companies shall not be deemed in conflict with its duties to the Fund
under this Section 1.2.
1.3 Consistent
with the understanding between the Fund and the Distributor, and subject to the
last sentence of this Section 1.3, Distributor shall engage in such activities
as it deems appropriate in connection with the promotion and sale of the
Interests, which may include advertising, compensation of underwriters, dealers
and sales personnel, the printing and mailing of Prospectuses to prospective
shareholders other than current shareholders, and the printing and mailing of
sales literature. Distributor may enter into dealer agreements and
other selling agreements with broker-dealers and other intermediaries; provided,
however, that Distributor shall have no obligation to make any payments to any
third parties, whether as finder’s fees, compensation or otherwise, unless (i)
Distributor has received a corresponding payment from the Fund’s investment
adviser (the “Adviser”) or from another source as may be permitted by applicable
law, and (ii) such corresponding payment has been approved by the Fund’s Board
of Directors.
1.4 In its
capacity as distributor of the Interests, all activities of the Distributor and
its partners, agents, and employees shall comply with all applicable laws, rules
and regulations, including, without limitation, the 1940 Act, all applicable
rules and regulations promulgated by the Commission thereunder, and all
applicable rules and regulations adopted by any securities association
registered under the Securities Exchange Act of 1934.
1.5 The
Fund’s officers may upon reasonable notice instruct the Distributor to decline
to accept any orders for or make any sales of the Interests until such time as
those officers deem it advisable to accept such orders and to make such
sales.
1.6 The Fund
agrees to inform the Distributor from time to time of the states in which the
Fund or its administrator has registered or otherwise qualified Interests for
sale, and the Fund agrees at its own expense to execute any and all documents
and to furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the
Interests for sale in such states as the Distributor may designate.
1.7 The Fund
shall furnish from time to time, for use in connection with the sale of the
Interests, such supplemental information with respect to the Interests as
Distributor may reasonably request; and the Fund warrants that the statements
contained in any such supplemental information will fairly show or represent
what they purport to show or represent. The Fund shall also furnish
Distributor upon request with: (a) unaudited semi-annual statements
of the Fund’s books and accounts, (b) monthly balance sheets as soon as
practicable after the end of each month, and (c) from time to time such
additional information regarding the Fund as the Distributor may reasonably
request.
1.8 The Fund
represents and warrants to Distributor that all registration statements, and the
Prospectus filed by the Fund with the Commission under the Securities Act and
the 1940 Act, when declared effective by the Staff of the Commission, shall be
prepared in conformity with requirements of said Acts and rules and regulations
of the Commission thereunder. The registration statement and
Prospectus shall contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of the Commission
thereunder, and all statements of fact contained in any such registration
statement and Prospectus are true and correct in all material
respects. Furthermore, neither any registration statement nor any
Prospectus includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading to a purchaser of the Interests. The foregoing
representations and warranties shall continue throughout the term of this
Agreement and be deemed to be of a continuing nature, applicable to all
Interests distributed hereunder. The Fund may, but shall not be
obligated to, propose from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any Prospectus as,
in the light of future developments, may, in the opinion of the Fund’s counsel,
be necessary or advisable. If the Fund shall not propose any
amendment or amendments and/or supplement or supplements within 15 days after
receipt by the Fund of a written request from Distributor to do so, Distributor
may, at its option, terminate this Agreement. In such case, the
Distributor will be held harmless from, and indemnified by the Fund for, any
liability or loss resulting from the failure to implement such
amendment. The Fund shall not file any amendment to any registration
statement or supplement to any Prospectus without giving Distributor reasonable
notice thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Fund’s right to file at any time such
amendments to any registration statement and/or supplements to any Prospectus,
of whatever character, as the Fund may deem advisable, such right being in all
respects absolute and unconditional.
1.9 The Fund
authorizes the Distributor and dealers to use any Prospectus in the form
furnished by the Fund from time to time in connection with the sale of the
Interests.
1.10 The
Distributor may utilize agents in its performance of its services and, with
prior notice to the Fund, appoint in writing other parties qualified to perform
specific administration services reasonably acceptable to the Fund
(individually, a “Sub-Agent”) to carry out some or all of its responsibilities
under this Agreement; provided, however, that a Sub-Agent shall be the agent of
the Distributor and not the agent of the Fund, and that the Distributor shall be
fully responsible for the acts of such Sub-Agent and shall not be relieved of
any of its responsibilities hereunder by the appointment of a
Sub-Agent.
1.11 The
Distributor shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the Distributor’s part in the performance of its duties,
from reckless disregard by the Distributor of its obligations and duties under
this Agreement, or from the Distributor’s failure to comply with laws, rules and
regulations applicable to it in connection with its activities
hereunder. The Fund agrees to indemnify, defend and hold harmless the
Distributor, its officers, partners, employees, and any person who controls the
Distributor within the meaning of Section 15 of the Securities Act
(collectively, “Distributor Indemnitees”), from and against any and all claims,
demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) (collectively,
“Claims”) which the Distributor Indemnitees may incur under the Securities Act
or under common law or otherwise (a) as the result of the Distributor acting as
distributor of the Fund and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with
financial intermediaries on behalf of the Fund; (b) arising out of or based upon
(i) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement or any Prospectus, (ii) any omission, or
alleged omission, to state a material fact required to be stated in any
registration statement or any Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (iii) any untrue statement, or alleged untrue statement, of a
material fact in any Fund-related advertisement or sales literature, or any
omission, or alleged omission, to state a material fact required to be stated
therein to make the statements therein, in light of the circumstances under
which they were made, not misleading, in either case notwithstanding the
exercise of reasonable care in the preparation or review thereof by the
Distributor; or (c) arising out of or based upon the electronic processing of
orders over the internet at the Fund’s request; provided, however, that the
Fund’s agreement to indemnify the Distributor Indemnitees pursuant to this
Section 1.11 shall not be construed to cover any Claims (A) pursuant to
subsection (b) above to the extent such untrue statement, alleged untrue
statement, omission, or alleged omission, was furnished in writing, or omitted
from the relevant writing furnished, as the case may be, to the Fund by the
Distributor for use in the registration statement or in corresponding statements
made in the Prospectus, advertisement or sales literature; (B) arising out of or
based upon the willful misfeasance, bad faith or gross negligence of the
Distributor in the performance of its duties or the Distributor’s reckless
disregard of its obligations and duties under this Agreement; or (C) arising out
of or based upon the Distributor’s failure to comply with laws, rules and
regulations applicable to it in connection with its activities
hereunder.
In the
event of a Claim for which the Distributor Indemnitees may be entitled to
indemnification hereunder, the Distributor shall provide the Fund with written
notice of the Claim, identifying the persons against whom such Claim is brought,
promptly following receipt of service of the summons or other first legal
process, and in any event within ten (10) days of such receipt. The
Fund will be entitled to assume the defense of any suit brought to enforce any
such Claim if such defense shall be conducted by counsel of good standing chosen
by the Fund and approved by the Distributor, which approval shall not be
unreasonably withheld. In the event any such suit is not based solely
on an alleged untrue statement, omission, or wrongful act on the Fund’s part,
the Distributor shall have the right to participate in the
defense. In the event the Fund elects to assume the defense of any
such suit and retain counsel of good standing so approved by the Distributor,
the Distributor Indemnitees in such suit shall bear the fees and expenses of any
additional counsel retained by any of them, but in any case where the Fund does
not elect to assume the defense of any such suit or in case the Distributor
reasonably withholds approval of counsel chosen by the Fund, the Fund will
reimburse the Distributor Indemnitees named as defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them to the extent
related to a Claim covered under this Section 1.11. The Fund’s
indemnification agreement contained in this Section 1.11 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor Indemnitees, and shall survive the delivery of any
Interests.
1.12 The
Distributor agrees to indemnify, defend and hold harmless the Fund, its
officers, Directors, employees, and any person who controls the Fund within the
meaning of Section 15 of the Securities Act (collectively, “Fund Indemnitees”),
from and against any and all Claims which the Fund Indemnitees may incur under
the Securities Act or under common law or otherwise, arising out of or based
upon (a) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement, Prospectus, or Fund-related
advertisement or sales literature, or any omission, or alleged omission, to
state a material fact in such materials that would be necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, which untrue statement, alleged untrue statement, omission, or
alleged omission, was furnished in writing, or omitted from the relevant writing
furnished, as the case may be, to the Fund by the Distributor for use in the
registration statement or in corresponding statements made in the Prospectus, or
advertisement or sales literature; (b) the willful misfeasance, bad faith or
gross negligence of the Distributor in the performance of its duties, or the
Distributor’s reckless disregard of its obligations and duties under this
Agreement, or (c) the Distributor’s failure to comply with laws, rules and
regulations applicable to it in connection with its activities hereunder (other
than in respect of Fund-related advertisements or sales literature that fail to
comply with applicable laws despite the Distributor’s exercise of reasonable
care in the preparation and review thereof).
In the
event of a Claim for which the Fund Indemnitees may be entitled to
indemnification hereunder, the Fund shall provide the Distributor with written
notice of the Claim, identifying the persons against whom such Claim is brought,
promptly following receipt of service of the summons or other first legal
process, and in any event within ten (10) days of such receipt. The
Distributor will be entitled to assume the defense of any suit brought to
enforce any such Claim if such defense shall be conducted by counsel of good
standing chosen by the Distributor and approved by the Fund, which approval
shall not be unreasonably withheld. In the event any such suit is not
based solely on an alleged untrue statement, omission, or wrongful act on the
Distributor’s part, the Fund shall have the right to participate in the
defense. In the event the Distributor elects to assume the defense of
any such suit and retain counsel of good standing so approved by the Fund, the
Fund Indemnitees in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in any case where the Distributor does not
elect to assume the defense of any such suit or in case the Fund reasonably
withholds approval of counsel chosen by the Distributor, the Distributor will
reimburse the Fund Indemnitees named as defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them to the extent
related to a Claim covered under this Section 1.12. The Distributor’s
indemnification agreement contained in this Section 1.12 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Fund Indemnitees, and shall survive the delivery of any
Interests.
1.13 No
Interests shall be offered by either the Distributor or the Fund under any of
the provisions of this Agreement and no orders for the purchase or sale of
Interests hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act or if and so long as a current Prospectus as required by Section
10 of the Securities Act is not on file with the Commission; provided, however,
that (a) the Distributor will not be obligated to cease offering Interests until
it has received from the Fund written notice of such events, and (b) nothing
contained in this Section 1.13 shall in any way restrict or have an application
to or bearing upon the Fund’s obligation to repurchase Interests from any
shareholder in accordance with the provisions of the Fund’s Prospectus or LLC
Agreement.
1.14 The Fund
agrees to advise the Distributor as soon as reasonably practicable by a notice
in writing delivered to the Distributor:
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(a)
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of
any request by the Commission for amendments to the registration statement
or Prospectus or for additional
information;
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(b)
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in
the event of the issuance by the Commission of any stop order suspending
the effectiveness of the registration statement or Prospectus or the
initiation by service of process on the Fund of any proceeding for that
purpose;
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(c)
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of
the happening of any event that makes untrue any statement of a material
fact made in the registration statement or Prospectus or which requires
the making of a change in such registration statement or Prospectus in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading;
and
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(d)
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of
any action of the Commission with respect to any amendment to any
registration statement or Prospectus which may from time to time be filed
with the Commission, which could reasonably be expected to have a material
negative impact upon the offering of
Interests.
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For
purposes of this Section, informal requests by or acts of the Staff of the
Commission shall not be deemed actions of or requests by the Commission unless
they would reasonably be expected to have a material negative impact upon the
offering of Interests.
1.15 NOTWITHSTANDING
ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, UNDER NO CIRCUMSTANCES SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT, SPECIAL,
PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES, INCLUDING LOST REVENUE, LOST PROFITS
OR LOST OR DAMAGED DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OR LIKELIHOOD OF SUCH DAMAGES.
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2.
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Fees.
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2.1 The Fund
will pay, or will cause to be paid, all costs and expenses relating to: (a) the
preparation and photocopying or printing of the Prospectus and all amendments
and supplements thereto; (b) the exemption from registration or qualification of
Interests for offer and sale under all relevant state “blue sky” laws; (c) the
furnishing to the Distributor of copies of the Prospectus and all amendments or
supplements thereto, in such quantities as may be required hereunder, including
costs of shipping and mailing; (d) fees and disbursements of counsel to the Fund
in connection with the organization and maintenance of the Fund and the
transactions contemplated by this Agreement; and (e) any other organization and
offering expenses of the Fund which are stated in the Prospectus to be the
responsibility of the Fund, the Adviser, or other agents or service
providers.
2.2 The Fund
will not be responsible for the expenses incurred by the Distributor in the
performance of its services under this Agreement, except as may be approved by
the Fund and disclosed in the Prospectus. PNC Capital Advisors, Inc.
(formerly known as Mercantile Capital Advisors, Inc.), the investment manager to
the Fund (the “Advisor”), compensates the Distributor for services performed
with respect to the Fund pursuant to a Distribution Services Agreement dated May
14, 2004, between the Distributor and the Advisor, as amended April 5, 2006 and
March 2, 2007.
2.3 The
Distributor may, and may authorize its Sub-Agents to, charge a sales load with
respect to any subscription solicited by the Distributor or such Sub-Agent, as
the case may be, provided that such sales load shall not exceed the sales load
permitted in the Prospectus. The sales load will be deducted from a
subscriber’s minimum subscription and will be collected from such subscriber;
the Fund will not be liable for any sales loads, nor will the Distributor be
obligated to pay any Sub-Agent or other party any sales load unless it expressly
consents thereto.
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3.
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Sale and
Payment.
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3.1 Interests
of the Fund may be subject to a sales load and may be subject to the imposition
of a sales load. To the extent that Interests of the Fund are sold at
an offering price which includes a sales load or are subject to a front-end
sales load in accordance with the Prospectus, such Interests shall hereinafter
be referred to collectively as “Load Interests.” If the Fund issues
Load Interests, it shall be referred to as a “Load Fund.” Under this
Agreement, the following provisions shall apply with respect to the sale of, and
payment for, Load Interests.
3.2 The
Distributor shall have the right to offer Load Interests at their net asset
value and to sell such Load Interests to the public against orders therefor at
the applicable public offering price, as defined in Section 4
hereof. The Distributor shall also have the right to sell Load
Interests to dealers against orders therefor at the public offering price less a
concession determined by the Distributor, which concession shall not exceed the
amount of the sales load or underwriting discount, if any, referred to in
Section 4 below.
3.3 Prior to
the time of delivery of any Load Interests by a Load Fund to, or on the order
of, the Distributor, the Distributor shall pay or cause to be paid to the Load
Fund or to its order an amount in same-day funds equal to the applicable net
asset value of such Interests. The Distributor may retain so much of
any sales load or underwriting discount as is not allowed by the Distributor as
a concession to dealers.
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4.
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Public Offering
Price.
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The
public offering price of an Interest shall be the net asset value of such
Interest next determined, plus any applicable sales load, all as set forth in
the Prospectus. The net asset value of Interests shall be determined
in accordance with the Prospectus.
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5.
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Issuance of
Interests.
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The Fund
reserves the right to issue, transfer or sell Interests at net asset values (a)
in connection with the merger or consolidation of the Fund with any other
investment company or the acquisition by the Fund of all or substantially all of
the assets or of the outstanding interests of any other investment company; (b)
in connection with a pro rata distribution directly to the holders of Interests
in the nature of a stock dividend or split; (c) upon the exercise of
subscription rights granted to the holders of Interests on a pro rata basis; (d)
in connection with the issuance of Interests pursuant to any exchange and
reinvestment privileges described in the Prospectus or the LLC Agreement; and
(e) otherwise in accordance with the Prospectus.
6. Representations and
Warranties.
6.1 The
Distributor represents, warrants and covenants to the Fund that:
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(a)
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Distributor
will comply fully with the terms and conditions set forth in the
Prospectus (including any amendments thereto from time to time that relate
to the Distributor and to which the Distributor has consented in writing
in advance).
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(b)
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The
Distributor has obtained all required governmental and regulatory
licenses, registrations and approvals as may be necessary for it to act as
Distributor hereunder (including registration as a broker-dealer with the
SEC and states in which offers are made, and membership in the FINRA); and
the Distributor will comply with any other applicable laws governing its
activities in the jurisdictions in which it offers
Interests.
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(c)
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The
Distributor is duly organized and validly existing as a corporation under
the laws of the State of Delaware and has full power and authority to
perform its obligations under this
Agreement.
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(d)
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This
Agreement has been duly and validly authorized, executed and delivered on
the Distributor’s behalf and constitutes the Distributor’s binding and
enforceable obligation in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
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(e)
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The
execution and delivery of this Agreement, the satisfaction of the
Distributor’s obligations herein set forth and the consummation of the
transactions contemplated herein and in the Prospectus will not constitute
a breach of, or default under, the Distributor’s organizational documents
or under any order, rule or regulation applicable to it or any order, rule
or regulation of any court or any governmental body, administrative agency
or self-regulatory organization having jurisdiction over
it.
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(f)
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The
Distributor has written policies and procedures in place that are
reasonably designed to prevent a violation of the Federal Securities Laws
(as such term is defined in Rule 38a-1 of the 0000 Xxx) by the Distributor
and, indirectly, the Fund as a result of actions to be undertaken by the
Distributor pursuant to this
Agreement.
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Each of
the representations and warranties set forth in this Section 6.1 shall be deemed
to be of a continuing nature and applicable, among other things, in the event of
any amendment, supplement or restatement of the Prospectus or LLC
Agreement.
6.2 The
Fund represents, warrants and covenants to the Distributor that:
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(a)
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The
Fund is duly organized and validly existing as a limited liability company
under the laws of the State of Delaware and has full power and authority
to conduct its business as described in the Prospectus and to issue, sell
and deliver the Interests as contemplated therein. The terms of
the offering and the LLC Agreement do not contravene any provisions of
federal or state law and the Fund is capitalized or will be capitalized as
described in the Prospectus or in its financial
statements.
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(b)
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The
Interests, when issued and sold pursuant to the terms hereof and of the
Prospectus, will be validly issued, fully paid and not subject to further
call or assessment, and the Fund will apply the proceeds received from the
issuance and sale of the Interests in the manner set forth in the
Prospectus.
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(c)
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The
Fund has obtained all necessary governmental and regulatory approvals and
licenses and has effected all filings and registrations required to
conduct its business and perform its obligations under this Agreement and
as provided in the Prospectus.
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(d)
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The
Fund is not in contravention of any provision of the LLC Agreement and is
not in contravention of or default under any material agreement, order,
law or regulation binding upon it. The execution and delivery
of this Agreement, consummation of the transactions herein contemplated
and compliance with the terms hereof will not constitute or result in a
default under or contravene any provision of any material agreement,
order, law or regulation binding upon the
Fund.
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(e)
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The
LLC Agreement and this Agreement have been duly authorized, executed and
delivered by the Fund, and each is a valid and binding agreement of the
Fund in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties, and except to
the extent that the indemnification or exculpation provisions of such
agreements may be limited under applicable law or this
Agreement.
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(f)
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The
Prospectus as of its date of issue and at the time each subscription is
accepted will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading. This representation and warranty shall not,
however, apply to any statement or omission in the Prospectus made in
reliance upon and in conformity with information furnished in writing by
the Distributor for use therein.
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Each of
the representations and warranties set forth in this Section 6.2 shall be deemed
to be of a continuing nature and applicable, among other things, in the event of
any amendment, supplement or restatement of the Prospectus or LLC
Agreement.
7. Term, Duration and
Termination.
This
Agreement shall become effective as of the date first written above (the
“Effective Date”) and, unless sooner terminated as provided herein, shall
continue for a one-year period following the Effective
Date. Thereafter, if not terminated, this Agreement shall continue
with respect to the Fund automatically for successive one-year terms, provided
that such continuance is specifically approved at least annually (a) by the vote
of a majority of those members of the Fund’s Board of Directors who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting for the purpose of voting on such approval and (b) by the
vote of the Fund’s Board of Directors or the vote of a majority of the
outstanding voting securities of the Fund. This Agreement is
terminable without penalty with 60 days’ prior written notice, by the Fund’s
Board of Directors, by vote of a majority of the outstanding voting securities
of the Fund, or by the Distributor. This Agreement will also
terminate automatically in the event of its assignment. (As used in
this Agreement, the terms “majority of the outstanding voting securities,”
“interested persons” and “assignment” shall have the same meaning as ascribed to
such terms in the 1940 Act.)
8. Privacy.
Nonpublic
personal financial information relating to consumers or customers of the Fund
provided by, or at the direction of, the Fund to the Distributor, or collected
or retained by the Distributor to perform its duties as distributor, shall be
considered confidential information. The Distributor shall not
disclose or otherwise use any nonpublic personal financial information relating
to present or former shareholders of the Fund other than for the purposes for
which that information was disclosed to the Distributor, including use under an
exception in Rules 13, 14 or 15 of the Commission’s Regulation S-P in the
ordinary course of business to carry out those purposes. The
Distributor shall have in place and maintain physical, electronic and procedural
safeguards reasonably designed to protect the security, confidentiality and
integrity of, and to prevent unauthorized access to or use of, records and
information relating to consumers and customers of the Fund. The Fund
represents to the Distributor that it has adopted a statement of its privacy
policies and practices as required by Regulation S-P and agrees to provide the
Distributor with a copy of that statement annually.
9. Anti-Money Laundering
Compliance.
9.1 Each
of the Distributor acknowledges that it is a financial institution subject to
the USA PATRIOT Act of 2001 and the Bank Secrecy Act (collectively, the “AML
Acts”), which require, among other things, that financial institutions adopt
compliance programs to guard against money laundering. The
Distributor represents and warrants to the other that it is in compliance with
and will continue to comply with the AML Acts and applicable regulations in all
relevant respects. The Distributor shall also provide written notice
to each person or entity with which it entered an agreement prior to the date
hereof with respect to sale of the Fund’s Interests, such notice informing such
person of anti-money laundering compliance obligations applicable to financial
institutions under applicable laws and, consequently, under applicable
contractual provisions requiring compliance with laws.
9.2 The
Distributor shall include specific contractual provisions regarding anti-money
laundering compliance obligations in agreements entered into by the Distributor
with any dealer that is authorized to effect transactions in Interests of the
Fund.
9.3 Each
of Distributor and the Fund agrees that it will take such further steps, and
cooperate with the other as may be reasonably necessary, to facilitate
compliance with the AML Acts, including but not limited to the provision of
copies of its written procedures, policies and controls related thereto, if
applicable (“AML Operations”). Distributor undertakes that it will
grant to the Fund, the Fund’s officers, agents and regulatory agencies,
reasonable access to copies of Distributor’s AML Operations, books and records
pertaining to the Fund only. It is expressly understood and agreed
that the Fund and the Fund’s officers and agents shall have no access to any of
Distributor’s AML Operations, books or records pertaining to other clients of
Distributor.
10. Notices.
Any
notice provided hereunder shall be sufficiently given when sent by registered or
certified mail to the party required to be served with such notice at the
following address: if to the Fund, to it at c/o PNC Capital Advisors,
Inc., Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000; with a copy to Xxxxxxxx
Xxxxxxx, Esq., c/o PNC Legal Department, 1600 Market 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX; and if to Distributor, to it at 00 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Broker Dealer Chief Compliance Officer,
with a copy to Foreside Distribution Services, L.P. 000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxx 00000, Attention: President, or at such other address as such
party may from time to time specify in writing to the other party pursuant to
this Section.
11. Confidentiality.
During
the term of this Agreement, the Distributor and the Fund may have access to
confidential information relating to such matters as either party’s business,
trade secrets, systems, procedures, manuals, products, contracts, personnel, and
clients. As used in this Agreement, “Confidential Information” means
information belonging to the Distributor or the Fund which is of value to such
party and the disclosure of which could result in a competitive or other
disadvantage to either party, including, without limitation, financial
information, business practices and policies, know-how, trade secrets, market or
sales information or plans, customer lists, business plans, and all provisions
of this Agreement. Confidential Information includes information
developed by either party in the course of engaging in the activities provided
for in this Agreement, unless: (i) the information is or becomes publicly known
without breach of this Agreement, (ii) the information is disclosed to the other
party by a third party not under an obligation of confidentiality to the party
whose Confidential Information is at issue of which the party receiving the
information should reasonably be aware, or (iii) the information is
independently developed by a party without reference to the other’s Confidential
Information. Each party will protect the other’s Confidential
Information with at least the same degree of care it uses with respect to its
own Confidential Information, and will not use the other party’s Confidential
Information other than in connection with its duties and obligations
hereunder. Notwithstanding the foregoing, a party may disclose the
other’s Confidential Information if (i) required by law, regulation or legal
process or if requested by any governmental agency; (ii) it is advised by
counsel that it may incur liability for failure to make such disclosure; (iii)
it is requested to do so by the other party; provided that in the event of (i)
or (ii) the disclosing party shall give the other party reasonable prior notice
of such disclosure to the extent reasonably practicable and cooperate with the
other party (at such other party’s expense) in any efforts to prevent such
disclosure.
12. Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the applicable provisions of the 1940 Act.
13. Prior
Agreements.
This
Agreement constitutes the complete agreement of the parties as to the subject
matter covered by this Agreement, and supersedes all prior negotiations,
understandings and agreements bearing upon the subject matter covered by this
Agreement.
14. Amendments.
No
amendment to this Agreement shall be valid unless made in writing and executed
by both parties hereto.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
KL2 2610973.1
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their officers designated below as of the day and year first written
above.
PNC
Absolute Return Master Fund LLC, PNC Absolute Return Fund LLC, PNC Absolute
Return TEDI Fund LLC, PNC Alternative Strategies Master Fund LLC, PNC
Alternative Strategies Fund LLC, PNC Alternative Strategies TEDI Fund LLC, PNC
Long-Short Master Fund LLC, PNC Long-Short Fund, LLC, PNC Long-Short TEDI Fund
LLC
By:
Name: Xxxxx
X. XxXxxxxxx
Title: President
PNC Fund
Distributor LLC
By:
Name: Xxxxxxx
Xxxxxx
Title: Vice
President
KL2 2610973.1
SCHEDULE
A
SERVICES
The
Services to be provided by the Distributor pursuant to this Agreement shall
include those set forth below and such additional services that the parties may
from time to time agree upon:
|
·
|
The
Distributor will conduct at least quarterly branch audits in connection
with its ongoing compliance
program.
|
|
·
|
The
Distributor will provide legal review, in addition to principal sign off,
of Fund sales literature (including on any website operated by the Adviser
or its affiliates, if applicable) to ensure compliance with the
advertising rules of the relevant regulatory authorities. The
Distributor will file such materials with the FINRA and advise the Fund
with respect to resolving any FINRA comments regarding such
materials.
|
|
·
|
The
Distributor will review subscription documents submitted with respect to
the Fund for completeness; provided, however, that the Fund shall be
responsible for determining whether an investor is qualified to purchase
Interests.
|
|
·
|
The
Distributor will conduct initial and on-going due diligence on
dealers/sellers that will sell Interests or provide ongoing services to
investors in the Fund, and will provide the Fund with access to
Dealer-Link for tracking agreements between the Distributor and such
parties.
|
|
·
|
The
Distributor will provide the following support services relating to
certain employees of the Adviser (“Adviser
Employees”):
|
|
(a)
|
Processing,
maintaining, and updating all FINRA and state registrations for the
Adviser Employees as representatives of the
Distributor;
|
|
(b)
|
Maintaining
a continuing education compliance calendar and furnishing the Adviser
Employees with required continuing education training, including, but not
limited to, annual “Firm Element” training and ongoing “Regulatory
Element” training;
|
|
(c)
|
Assigning
the Adviser Employees, in their capacity as registered representatives of
the Distributor, to a supervisory principal who will: (i) provide required
supervision of the Adviser Employees under the Distributor’s supervisory
system designed to promote compliance with applicable laws, rules and
regulations, (ii) raise and address applicable regulatory issues with (and
notify and request any specific regulatory information which may be
required from) Adviser and/or the Adviser Employees, (iii) review and
approve (as appropriate) sales-related correspondence and promotional
materials, and (iv) serve as a liaison between the Distributor and Adviser
with respect to supervisory issues;
and
|
|
(d)
|
Commission
calculation and processing (as well as processing any commission/incentive
fee calculation and processing for payments from the Distributor to
Adviser Employees).
|
KL2 2610973.1
KL2 2610973.1
