SECOND AMENDED AND RESTATED SELLING AGREEMENT CITIGROUP DIVERSIFIED FUTURES FUND L.P. 2,000,000 Units of Limited Partnership Interest

Exhibit 1.1

SECOND AMENDED AND RESTATED SELLING AGREEMENT

CITIGROUP DIVERSIFIED FUTURES FUND L.P.

2,000,000 Units of Limited Partnership Interest

AGREEMENT made as of the              day of             , 2004, by and among CITIGROUP DIVERSIFIED FUTURES FUND L.P., a New York limited partnership (the “Partnership”), CITIGROUP MANAGED FUTURES LLC, a Delaware limited liability company (“CMF”) and CITIGROUP GLOBAL MARKETS INC., a New York corporation (“CGM”).

W I T N E S S E T H :

WHEREAS, the Partnership has filed a registration statement on Form S-1 (File No. 333-            ) with the Securities and Exchange Commission (the “SEC”) in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), and as a part thereof a form of preliminary prospectus relating to the offer and sale of up to 2,000,000 Units of Limited Partnership Interest in the Partnership (the “Units”) (the registration statement in the form in which it becomes effective under the Act being hereinafter referred to as the “Registration Statement” and the prospectus in the form included therein being hereinafter referred to as the “Prospectus”; provided that (i) if the Partnership files a post-effective amendment to such registration statement, then the term “Registration Statement” shall refer to the registration statement as amended by such post-effective amendment, and the term “Prospectus” shall refer to the amended prospectus then on file with the SEC and (ii) if a prospectus filed by the Partnership pursuant to either Rule 424(b) or (c) promulgated under the Act shall differ from the prospectus on file at the time the Registration Statement or any post-effective amendment thereof shall have become effective, the term “Prospectus” shall refer to the prospectus filed pursuant to Rule 424(b) or (c), from and after the date on which it shall have been filed); and

WHEREAS, consistent with SEC Rule 429, the Registration Statement relates to Units covered by prior Registration Statement 333-110076; and

WHEREAS, the Partnership has entered into management agreements with each of Aspect Capital Limited, Capital Fund Management SA, Drury Capital, Inc., Graham Capital Management, L.P., John W. Henry & Company, Inc. and Willowbridge Associates Inc. (each an “Advisor,” collectively, the “Advisors”) and CMF, pursuant to which commodity trading decisions will be made by the Advisors as described in the Prospectus; and

WHEREAS, CMF, the Partnership and CGM entered into a Selling Agreement dated as of February 12, 2003, as amended and restated in its entirety by that certain Amended and Restated Selling Agreement, dated as of November 11, 2003 (the “Amended and Restated Selling Agreement”) in order to set forth the terms and conditions upon which CGM agreed to assist in the offer and sale of the Units upon the terms and in reliance upon the representations, warranties and agreements set forth in the Amended and Restated Selling Agreement; and

WHEREAS, CMF, the Partnership and CGM wish to amend and restate the Amended and Restated Selling Agreement in its entirety upon the terms and in reliance upon the representations, warranties and agreements set forth herein;

NOW, THEREFORE, the parties hereto agree as follows:

1. Appointment of Selling Agent; Money Laundering Prevention

(a) The Partnership hereby appoints CGM as its exclusive agent to offer and sell the Units on the terms and conditions set forth herein and in the Registration Statement and the Prospectus during the offering period (the “Offering Period”), a period commencing on the date the Registration Statement is declared effective by the SEC and ending upon the earlier of the date two years from the date the Registration Statement is declared effective and the date on which 2,000,000 Units are sold, unless CMF, the general partner of the Partnership, terminates the offering at an earlier date.

(b) CGM hereby accepts appointment as selling agent for the Partnership to effect sales of up to 2,000,000 Units as provided herein, in the Registration Statement and in the Prospectus. CGM represents and hereby confirms that in selling to subscribers and otherwise carrying out its obligations under this agreement it will comply with Paragraphs (b)(2) and (b)(3) of Rule 2810 of the Conduct Rules of NASD, Inc., as set forth in Schedule I hereto. CGM agrees that CMF has the right to reject any subscription for Units for any reason and to suspend sales of Units during the Offering Period.

(c) The Partnership agrees to bear all expenses in connection with the Offering Period including, without limitation, fees and expenses of its counsel, SEC and other filing fees, blue sky fees and expenses, printing expenses, fees and expenses of independent public accountants and escrow fees.

(d) CGM agrees that all funds received by CGM from subscribers shall be promptly delivered to JPMorgan Chase Bank as escrow agent for the benefit of the subscribers (the “Escrow Agent”) by noon of the second business day after receipt. Furthermore, CGM will require all soliciting dealers to forward to CGM, for delivery to the Escrow Agent, all checks received by them from subscribers for Units by noon of the next business day after their receipt of the checks. CGM represents and hereby confirms that if it receives checks from customers it will act as processing broker-dealer in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended, and NASD Notices to Members 84-7 and 84-64.

(e) CGM represents and confirms that it is registered with the Commodity Futures Trading Commission (“CFTC”) as a futures commission merchant and is a member of the National Futures Association (“NFA”) in that capacity. Further, any associated person of CGM who receives continuing compensation in the form of a portion of the commodity brokerage fees paid by the Partnership shall be registered with the CFTC as an associated person of a futures commission merchant or an introducing broker and shall be an associate member of the NFA (qualified as an associated person by having taken the Series 3 or Series 31 Commodities Exam or having been “grandfathered” as an associated person qualified to do commodity brokerage).

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(f) CGM represents and confirms that it is in compliance with applicable anti-money laundering laws (including the USA Patriot Act) and related regulations and agrees that it shall be responsible for compliance with such laws and regulations with respect to purchasers of Units.

2. Agreements of the Partnership. The Partnership agrees with CGM as follows:

(a) The Partnership will advise CGM, promptly after it receives notice thereof, (i) of the time when the Registration Statement has become effective and when any amendment thereto becomes effective, (ii) of the issuance by the SEC of any stop order or of any order preventing or suspending the use of any Prospectus, or the initiation or threat of any proceeding for any such purpose and (iii) of any request by the SEC for amendments or supplements to the Registration Statement or Prospectus or for additional information. In the event of the issuance of any stop order or of any order preventing or suspending the use of any Prospectus, the Partnership will promptly use its best efforts to obtain its withdrawal.

(b) The Partnership will furnish to CGM, without charge, two signed copies of the Registration Statement as originally filed and each amendment thereto, including all exhibits.

(c) The Partnership will not file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus of which CGM shall not previously have been advised or to which CGM shall reasonably object in writing.

(d) The Partnership will furnish CGM with copies of any preliminary prospectus and of the Prospectus in such quantities as they may from time to time reasonably request. If at any time when the Prospectus is required to be delivered under the Act any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with the Act, the Partnership will notify CGM and upon its request prepare and furnish without charge to it as many copies as it may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance.

(e) The Partnership will take such action as CGM may reasonably request to qualify the Units for offering and sale under the securities or blue sky laws of such jurisdictions as it may request and will comply with such laws so as to permit the continuance of sales in such jurisdictions for as long as may be necessary to complete the distribution.

3. Representations and Warranties.

The Partnership represents and warrants to CGM that:

(a) Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto complied or when so filed will comply in all material respects with the requirements of the Act and the Commodity Exchange Act (“CEA”).

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(b) At the time the Registration Statement becomes effective and at all times subsequent thereto up to the termination of the Offering Period, the Registration Statement and the Prospectus, and any amendments or supplements thereto, will comply in all material respects with the provisions of the Act and the CEA and neither the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, provided, however, that the representations and warranties contained in subparagraphs (a) and (b) above do not apply to any statements or omissions in the Registration Statement or Prospectus, or any amendment or supplement thereto, made in reliance upon information furnished to the Partnership by CGM or on its behalf expressly for use therein.

(c) The Partnership is duly formed and validly existing as a limited partnership under the New York Revised Limited Partnership Act (the “Partnership Law”), with full partnership power and authority to carry out its obligations under this Agreement, its Certificate of Limited Partnership, as amended from time to time (the “Partnership Certificate”), and its Limited Partnership Agreement, as amended from time to time (the “Partnership Agreement”), and to conduct its business as described in the Prospectus. The Partnership conducts no business and owns or leases no properties which would require it to qualify to do business as a foreign organization in any jurisdiction.

(d) The offer and sale of the Units has been duly authorized by the Partnership and the Units constitute valid limited partnership interests in the Partnership which conform to the description thereof contained in the Prospectus; and the liability of each limited partner will be limited as set forth in the Prospectus, and no limited partner will be subject to personal liability for the debts, obligations, or liabilities of the Partnership by reason of his being a limited partner other than as described in the Prospectus.

(e) The offer and sale of the Units and the compliance by the Partnership with all of the provisions of this Agreement will not conflict with or result in a breach of any of the terms or provisions of any agreement to which the Partnership is a party or by which it is bound, nor will such action result in a violation of the provisions of the Partnership Agreement or Partnership Certificate or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Partnership or any of its properties.

(f) A separate escrow account has been opened at the Escrow Agent and will be maintained for all funds received from subscribers for Units. All payments received from persons desiring to purchase Units will be deposited in such account and held in accordance with the terms of the escrow agreement governing such account between the Partnership, CMF, CGM and the Escrow Agent.

(g) KPMG LLP, who have certified certain financial statements contained in the Registration Statement, are independent public accountants as required by the Act.

4. Conditions. The obligations of the parties hereunder shall at all times be subject to the continued accuracy of all representations and warranties of the parties contained herein as though such representations and warranties had been made at and as of such times, and the additional conditions that the Registration Statement shall have become effective and no stop order

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suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the SEC; and all requests for additional information on the part of the SEC shall have been complied with.

5. Indemnification.

CGM agrees to indemnify and hold harmless the Partnership against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) arising out of or based upon any untrue or alleged untrue statement of material fact contained in any preliminary prospectus, the Registration Statement or the Prospectus (as from time to time amended and supplemented), or any related sales material used by CGM in connection with this offering of Units, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that such statement or omission was made in reliance upon and in conformity with information furnished to the Partnership by CGM, expressly for use in any preliminary prospectus, the Registration Statement or Prospectus or any amendment or supplement thereto.

6. Term.

(a) This Agreement may be terminated by CGM, at its option, by giving notice to the Partnership, if:

(i) there shall have been, since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, of the Partnership or CMF, which change in its judgment shall render it inadvisable to proceed with the offer and sale of the Units; or

(ii) any of the conditions specified in Section 4 hereof shall not have been fulfilled when and as required by this Agreement to be fulfilled.

(b) The termination of this Agreement for any reason set forth in this Section 6 shall not affect the obligations of the Partnership contained in Section 2 hereof.

7. Miscellaneous.

(a) All representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any party, (ii) delivery of and payment for the Units, or (iii) termination of this Agreement.

(b) Except as otherwise expressly provided, this Agreement is made solely for the benefit of, and shall be binding upon, the parties hereto and their respective successors and assigns, and no other person shall have any right or obligation under it. The terms “successors” and “assigns” shall not include any purchasers, as such, of Units in the Partnership.

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(c) Whenever notice is required to be given by the provisions of this Agreement, such notice shall be in writing and delivered personally or by registered or certified mail, return receipt requested, postage prepaid, and properly addressed as follows:

If to the Partnership to:

Citigroup Diversified Futures Fund L.P.

c/o Citigroup Managed Futures LLC

399 Park Avenue, 7^th Floor

New York, New York 10022

If to CGM to:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

If to CMF to:

Citigroup Managed Futures LLC

399 Park Avenue, 7^th Floor

New York, New York 10022

(d) No party is authorized by the Partnership to give any information or make any representation in connection with the offering of Units other than those contained in the Prospectus and such sales literature the use of which has been authorized in writing by the Partnership.

(e) This Agreement may be signed in counterpart.

(f) This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of the parties as of the day and year first above mentioned.

SCHEDULE I

Suitability

(b)(2)(A) A member or person associated with a member shall not underwrite or participate in a public offering of a direct participation program unless standards of suitability have been established by the program for participants therein and such standards are fully disclosed in the prospectus and are consistent with the provisions of subparagraph (B) below.

          (B) In recommending to a participant the purchase, sale or exchange of an interest in a direct participation program, a member or person associated with a member shall:

(i) have reasonable grounds to believe, on the basis of information obtained from the participant concerning his investment objectives, other investments, financial situation and needs, and any other information known by the member or associated person, that:

a. the participant is or will be in a financial position appropriate to enable him to realize to a significant extent the benefits described in the prospectus, including the tax benefits where they are a significant aspect of the program:

b. the participant has a fair market net worth sufficient to sustain the risks inherent in the program, including loss of investment and lack of liquidity; and

c. the program is otherwise suitable for the participant; and

(ii) maintain in the files of the member documents disclosing the basis upon which the determination of suitability was reached as to each participant.

          (C) Notwithstanding the provisions of subparagraphs (A) and (B) hereof, no member shall execute any transaction in a direct participation program in a discretionary account without prior written approval of the transaction by the customer.

          (D) Subparagraphs (A) and (B), and, only in situations where the member is not affiliated with the direct participation program, subparagraph (C), shall not apply to:

(i) a secondary public offering of or a secondary market transaction in a unit, depositary receipt, or other interest in a direct participation program for which quotations are displayed on Nasdaq or which is listed on a registered national securities exchange; or

(ii) an initial public offering of a unit, depositary receipt or other interest in a direct participation program for which an application for inclusion on Nasdaq or listing on a registered national securities exchange has been approved by Nasdaq or such exchange and the applicant makes a good faith representation that it believes such

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inclusion on Nasdaq or listing on an exchange will occur within a reasonable period of time following the formation of the program.

Disclosure

(b)(3)(A) Prior to participating in a public offering of a direct participation program, a member or person associated with a member shall have reasonable grounds to believe, based on information made available to him by the sponsor through a prospectus or other materials, that all material facts are adequately and accurately disclosed and provide a basis for evaluating the program.

          (B) In determining the adequacy of disclosed facts pursuant to subparagraph (A) hereof, a member or person associated with a member shall obtain information on material facts relating at a minimum to the following, if relevant in view of the nature of the program:

(i) items of compensation;

(ii) physical properties;

(iii) tax aspects;

(iv) financial stability and experience of the sponsor;

(v) the program’s conflict and risk factors; and

(vi) appraisals and other pertinent reports.

          (C) For purposes of subparagraphs (A) or (B) hereof, a member or person associated with a member may rely upon the results of an inquiry conducted by another member or members, provided that:

(i) the member or person associated with a member has reasonable grounds to believe that such inquiry was conducted with due care;

(ii) the results of the inquiry were provided to the member or person associated with a member with the consent of the member or members conducting or directing the inquiry; and

(iii) no member that participated in the inquiry is a sponsor of the program or an affiliate of such sponsor.

          (D) Prior to executing a purchase transaction in a direct participation program, a member or person associated with a member shall inform the prospective participant of all pertinent facts relating to the liquidity and marketability of the program during the term of the investment; provided, however, that this paragraph (b) shall not apply to an initial or secondary public offering of or a secondary market transaction in a unit, depositary receipt or other interest in a direct participation program which complies with subparagraph (2)(D).

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