Document:

exv10w3

Exhibit 10.3

ADVISORY AGREEMENT

          AGREEMENT dated as of the 3rd day of April 2006 among CITIGROUP MANAGED FUTURES LLC, a
Delaware limited liability company (“CMF” or the “General Partner”), SALOMON SMITH BARNEY AAA
ENERGY FUND L.P. II, a New York limited partnership (the “Partnership”) and AAA CAPITAL MANAGEMENT
ADVISORS, LTD., a Texas limited partnership (the “Advisor”).

W I T N E S S E T H:

          WHEREAS, CMF is the general partner of SALOMON SMITH BARNEY AAA ENERGY FUND L.P. II, a limited
partnership organized for the purpose of speculative trading of commodity interests, including
futures contracts, options and forward contracts with the objective of achieving substantial
capital appreciation initially through an investment in AAA Master Fund LLC (the “Master Fund”);
and

          WHEREAS, the Limited Partnership Agreement establishing the Partnership (the “Limited
Partnership Agreement”) permits CMF to delegate to one or more commodity trading advisors CMF’s
authority to make trading decisions for the Partnership; and

          WHEREAS, the Advisor is registered as a commodity trading advisor with the Commodity Futures
Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”); and

          WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a member of the
NFA; and

          WHEREAS, CMF, the Partnership and AAA Capital Management, Inc., a Texas corporation, entered
into an advisory agreement dated as of May 31, 2002 (the “Initial Advisory Agreement”), pursuant to
which AAA Capital Management, Inc. agreed to render and implement advisory services to the
Partnership; and

          WHEREAS, the Advisor and AAA Capital Management, Inc. have the same beneficial ownership; and

          WHEREAS, AAA Capital Management, Inc. wishes to transfer all of its rights and obligations
under the Initial Advisory Agreement to the Advisor, and the Advisor wishes to assume all of such
rights and obligations of AAA Capital Management, Inc. under the Initial Advisory Agreement; and

          WHEREAS, CMF, the Partnership and the Advisor wish to enter into this Agreement in order to
set forth the terms and conditions upon which the Advisor will (i) render and implement advisory
services in connection with the conduct by the Partnership of its commodity trading activities
during the term of this Agreement and (ii) assume the rights and obligations of AAA Capital
Management, Inc. under the Initial Advisory Agreement;

          NOW, THEREFORE, the parties agree as follows:

 

 

          1. DUTIES OF THE ADVISOR. (a) Upon the commencement of trading operations by the
Partnership and for the period and on the terms and conditions of this Agreement, the Advisor shall
have sole authority and responsibility, as one of the Partnership’s agents and attorneys-in-fact,
for directing the investment and reinvestment of the assets and funds of the Partnership allocated
to it by the General Partner in commodity interests, including commodity futures contracts,
options, swaps and forward contracts. All such trading on behalf of the Partnership shall be in
accordance with the trading strategies and trading policies set forth in the Private Placement
Memorandum and Disclosure Document dated September 30, 2005, as supplemented (the “Memorandum”),
and as such trading policies may be changed from time to time upon receipt by the Advisor of prior
written notice of such change and pursuant to the trading strategy selected by CMF to be utilized
by the Advisor in managing the Partnership’s assets. CMF has initially selected the Advisor’s
Energy Program-Futures and Swaps (the “Program”) to manage the Partnership’s assets allocated to
it. Any open positions or other investments at the time of receipt of such notice of a change in
trading policy shall not be deemed to violate the changed policy and shall be closed or sold in the
ordinary course of trading. The Advisor may not deviate from the trading policies set forth in the
Memorandum without the prior written consent of the Partnership given by CMF. The Advisor makes no
representation or warranty that the trading to be directed by it for the Partnership will be
profitable or will not result in losses.

          (b) CMF acknowledges receipt of the Advisor’s draft Disclosure Document dated March 31, 2006,
as filed with the NFA and the CFTC. All trades made by the Advisor for the account of the
Partnership, whether directly or indirectly through the Master Fund, shall be made through such
commodity broker or brokers as CMF shall direct, and the Advisor shall have no authority or
responsibility for selecting or supervising any such broker in connection with the execution,
clearance or confirmation of transactions for the Partnership or for the negotiation of brokerage
rates charged therefor. However, the Advisor, with the prior written permission (by either
original or fax copy) of CMF, may direct all trades in commodity futures and options to a futures
commission merchant or independent floor broker it chooses for execution with instructions to
give-up the trades to the broker designated by CMF, provided that the futures commission merchant
or independent floor broker and any give-up or floor brokerage fees are approved in advance by CMF.
All give-up or similar fees relating to the foregoing shall be paid by the Partnership after all
parties have executed the relevant give-up agreements (by either original or fax copy).

          (c) The allocation of the Partnership’s assets to the Advisor will be made to the Program. In
the event the Advisor wishes to use a trading system or methodology other than or in addition to
the system or methodology outlined in the Memorandum in connection with its trading for the
Partnership, either in whole or in part, it may not do so unless the Advisor gives CMF prior
written notice of its intention to utilize such different trading system or methodology and CMF
consents thereto in writing. In addition, the Advisor will provide five days’ prior written notice
to CMF of any change in the trading system or methodology to be utilized for the Partnership which
the Advisor deems material. If the Advisor deems such change in system or methodology or in
markets traded to be material, the changed system or methodology or markets traded will not be
utilized for the Partnership without the prior written consent of CMF. In addition, the Advisor
will notify CMF of any changes to the trading system or methodology that would require a change in
the description of the trading strategy or methods described in the

2

 

Memorandum. Further, the Advisor will provide the Partnership with a current list of all
commodity interests to be traded for the Partnership’s account and will not trade any additional
commodity interests for such account without providing notice thereof to CMF and receiving CMF’s
written approval. The Advisor also agrees to provide CMF, on a monthly basis, with a written
report of the assets under the Advisor’s management together with all other matters deemed by the
Advisor to be material changes to its business not previously reported to CMF.

          (d) The Advisor agrees to make all material disclosures to the Partnership regarding itself
and its principals as defined in Part 4 of the CFTC’s regulations (“principals”), partners,
shareholders, directors, officers and employees, their trading performance and general trading
methods, its customer accounts (but not the identities of or identifying information with respect
to its customers) and otherwise as are required in the reasonable judgment of CMF to be made in any
filings required by Federal or state law or NFA rule or order. Notwithstanding Sections 1(d) and
4(d) of this Agreement, the Advisor is not required to disclose the actual trading results of
proprietary accounts of the Advisor or its principals unless CMF reasonably determines that such
disclosure is required in order to fulfill its fiduciary obligations to the Partnership or the
reporting, filing or other obligations imposed on it by Federal or state law or NFA rule or order.
The Partnership and CMF acknowledge that the trading advice to be provided by the Advisor is a
property right belonging to the Advisor and that they will keep all such advice confidential.
Further, CMF agrees to treat as confidential any results of proprietary accounts and/or proprietary
information with respect to trading systems obtained from the Advisor.

          (e) The Advisor understands and agrees that CMF may designate other trading advisors for the
Partnership and apportion or reapportion to such other trading advisors the management of an amount
of Net Assets (as defined in Section 3(b) hereof) as it shall determine in its absolute discretion.
The designation of other trading advisors and the apportionment or reapportionment of Net Assets
to any such trading advisors pursuant to this Section 1 shall neither terminate this Agreement nor
modify in any regard the respective rights and obligations of the parties hereunder.

          (f) CMF may, from time to time, in its absolute discretion, select additional trading advisors
and reapportion funds among the trading advisors for the Partnership as it deems appropriate. CMF
shall use its best efforts to make reapportionments, if any, as of the first day of a month. The
Advisor agrees that it may be called upon at any time promptly to liquidate positions in CMF’s sole
discretion so that CMF may reallocate the Partnership’s assets, meet margin calls on the
Partnership’s account, fund redemptions, or for any other reason, except that CMF will not require
the liquidation of specific positions by the Advisor. CMF will use its best efforts to give two
days’ prior notice to the Advisor of any reallocations or liquidations.

          (g) The Advisor will not be liable for trading losses in the Partnership’s account including
losses caused by errors; provided, however, that (i) the Advisor will be liable to the Partnership
with respect to losses incurred due to errors committed or caused by it or any of its principals or
employees in communicating improper trading instructions or orders to any broker on behalf of the
Partnership and (ii) the Advisor will be liable to the Partnership with respect to losses incurred
due to errors committed or caused by any executing broker (other than

3

 

any CMF affiliate) selected by the Advisor, (it also being understood that CMF, with the
assistance of the Advisor, will first attempt to recover such losses from the executing broker).

          2. INDEPENDENCE OF THE ADVISOR. For all purposes herein, the Advisor shall be deemed
to be an independent contractor and, unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Partnership in any way and shall not be deemed an agent,
promoter or sponsor of the Partnership, CMF, or any other trading advisor.

          3. COMPENSATION. (a) In consideration of and as compensation for all of the services
to be rendered by the Advisor to the Partnership under this Agreement, the Partnership shall (i)
pay the Advisor a monthly fee for professional advisory services equal to 1/6 of 1% (2% per year)
of the month-end Net Assets of the Partnership allocated to the Advisor; and (ii) allocate to the
Advisor an annual Profit Share to its capital account in the Partnership equal to 20% of New
Trading Profits (as such term is defined in the Limited Partnership Agreement) earned by the
Advisor for the Partnership during each calendar year in the form of Units; provided, that
in the event that the Limited Partnership Agreement is amended to provide that the Profit Share
allocation shall be made on a quarterly rather than an annual basis, this Section 3(a)(ii) shall be
deemed to be amended accordingly.

          (b) “Net Assets” shall have the meaning set forth in Paragraph 7(d)(1) of the Limited
Partnership Agreement dated as of March 25, 2002 and without regard to further amendments thereto,
provided that in determining the Net Assets of the Partnership on any date, no adjustment shall be
made to reflect any distributions, redemptions or Profit Share allocable as of the date of such
determination.

          (c) Monthly Advisory fees shall be paid within twenty (20) business days following the end of
the period, for which such fee is payable. In the event of the termination of this Agreement as of
any date which shall not be the end of a fiscal year or a calendar month, as the case may be, the
monthly Advisory fee shall be prorated to the effective date of termination. If, during any month,
the Partnership does not conduct business operations or the Advisor is unable to provide the
services contemplated herein for more than two successive business days, the monthly Advisory fee
shall be prorated by the ratio which the number of business days during which CMF conducted the
Partnership’s business operations or utilized the Advisor’s services bears in the month to the
total number of business days in such month.

          (d) The provisions of this Paragraph 3 shall survive the termination of this Agreement.

          4. RIGHT TO ENGAGE IN OTHER ACTIVITIES. (a) The services provided by the Advisor
hereunder are not to be deemed exclusive. CMF on its own behalf and on behalf of the Partnership
acknowledges that, subject to the terms of this Agreement, the Advisor and its officers, directors,
employees and shareholder(s), may render advisory, consulting and management services to other
clients and accounts. The Advisor and its officers, directors, employees and shareholder(s) shall
be free to trade for their own accounts and to advise other investors and manage other commodity
accounts during the term of this Agreement and to use the same information, computer programs and
trading strategies, programs or

4

 

formulas which they obtain, produce or utilize in the performance of services to CMF for the
Partnership. However, the Advisor represents, warrants and agrees that it believes the rendering
of such consulting, advisory and management services to other accounts and entities will not
require any material change in the Advisor’s basic trading strategies and will not affect the
capacity of the Advisor to continue to render services to CMF for the Partnership of the quality
and nature contemplated by this Agreement.

          (b) If, at any time during the term of this Agreement, the Advisor is required to aggregate
the Partnership’s commodity positions with the positions of any other person for purposes of
applying CFTC- or exchange-imposed speculative position limits, the Advisor agrees that it will
promptly notify CMF in writing if the Partnership’s positions are included in an aggregate amount
which exceeds the applicable speculative position limit. The Advisor agrees that, if its trading
recommendations are altered because of the application of any speculative position limits, it will
not modify the trading instructions with respect to the Partnership’s account in such manner as to
affect the Partnership substantially disproportionately as compared with the Advisor’s other
accounts. The Advisor further represents, warrants and agrees that under no circumstances will it
knowingly or deliberately use trading strategies or methods for the Partnership that are inferior
to strategies or methods employed for any other client or account and that it will not knowingly or
deliberately favor any client or account managed by it over any other client or account in any
manner, it being acknowledged, however, that different trading strategies or methods may be
utilized for differing sizes of accounts, accounts with different trading policies, accounts
experiencing differing inflows or outflows of equity, accounts which commence trading at different
times, accounts which have different portfolios or different fiscal years, accounts utilizing
different executing brokers and accounts with other differences, and that such differences may
cause divergent trading results.

          (c) It is acknowledged that the Advisor and/or its officers, employees, directors and
shareholder(s) presently act, and it is agreed that they may continue to act, as advisor for other
accounts managed by them, and may continue to receive compensation with respect to services for
such accounts in amounts which may be more or less than the amounts received from the Partnership.

          (d) The Advisor agrees that it shall make such information available to CMF respecting the
performance of the Partnership’s account as compared to the performance of other accounts managed
by the Advisor or its principals as shall be reasonably requested by CMF. The Advisor presently
believes and represents that existing speculative position limits will not materially adversely
affect its ability to manage the Partnership’s account given the potential size of the
Partnership’s account and the Advisor’s and its principals’ current accounts and all proposed
accounts for which they have contracted to act as trading manager.

          5. TERM. (a) This Agreement shall continue in effect until June 30, 2006. CMF may,
in its sole discretion, renew this Agreement for additional one-year periods upon notice to the
Advisor not less than 30 days prior to the expiration of the previous period. At any time during
the term of this Agreement, CMF may terminate this Agreement at any month-end upon 30 days’ notice
to the Advisor. At any time during the term of this Agreement, CMF may elect to immediately
terminate this Agreement upon 30 days’ notice to the Advisor if (i) the Net Asset Value per Unit
shall decline as of the close of business on any day to $400 or less; (ii) the

5

 

Net Assets allocated to the Advisor (adjusted for redemptions, distributions, withdrawals or
reallocations, if any) decline by 50% or more as of the end of a trading day from such Net Assets’
previous highest value; (iii) limited partners owning at least 50% of the outstanding Units shall
vote to require CMF to terminate this Agreement; (iv) the Advisor fails to comply with the terms of
this Agreement; (v) CMF, in good faith, reasonably determines that the performance of the Advisor
has been such that CMF’s fiduciary duties to the Partnership require CMF to terminate this
Agreement; or (vi) CMF reasonably believes that the application of speculative position limits will
substantially affect the performance of the Partnership. At any time during the term of this
Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges,
consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or
insolvent, (ii) A. Anthony Annunziato dies, becomes incapacitated, leaves the employ of the
Advisor, ceases to control the Advisor or is otherwise not managing the trading programs or systems
of the Advisor, or (iii) the Advisor’s registration as a commodity trading advisor with the CFTC or
its membership in the NFA or any other regulatory authority, is terminated or suspended. This
Agreement will immediately terminate upon dissolution of the Partnership or upon cessation of
trading prior to dissolution.

          (b) The Advisor may terminate this Agreement by giving not less than 30 days’ notice to CMF
(i) in the event that the trading policies of the Partnership as set forth in the Memorandum are
changed in such manner that the Advisor reasonably believes will adversely affect the performance
of its trading strategies; (ii) after June 30, 2006; or (iii) in the event that the General Partner
or Partnership fails to comply with the terms of this Agreement. The Advisor may immediately
terminate this Agreement if CMF’s registration as a commodity pool operator or its membership in
the NFA is terminated or suspended.

          (c) Except as otherwise provided in this Agreement, any termination of this Agreement in
accordance with this Paragraph 5 or Paragraph 1(e) shall be without penalty or liability to any
party, except for any fees due to the Advisor pursuant to Section 3 hereof.

          6. INDEMNIFICATION. (a) (i) In any threatened, pending or completed action, suit,
or proceeding to which the Advisor was or is a party or is threatened to be made a party arising
out of or in connection with this Agreement or the management of the Partnership’s assets by the
Advisor or the offering and sale of units in the Partnership, CMF shall, subject to subparagraph
(a)(iii) of this Paragraph 6, indemnify and hold harmless the Advisor against any loss, liability,
damage, cost, expense (including, without limitation, attorneys’ and accountants’ fees), judgments
and amounts paid in settlement actually and reasonably incurred by it in connection with such
action, suit, or proceeding if the Advisor acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the Partnership, and provided that its conduct did
not constitute negligence, intentional misconduct, or a breach of its fiduciary obligations to the
Partnership as a commodity trading advisor, unless and only to the extent that the court or
administrative forum in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all circumstances of the case, the
Advisor is fairly and reasonably entitled to indemnity for such expenses which such court or
administrative forum shall deem proper; and further provided that no indemnification shall be
available from the Partnership if such indemnification is prohibited by Section 16 of the
Partnership Agreement. The termination of any action, suit or proceeding by judgment, order or
settlement shall not, of itself, create a presumption that the Advisor did not

6

 

act in good faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Partnership.

     (i) Without limiting sub-paragraph (i) above, to the extent that the Advisor has been
successful on the merits or otherwise in defense of any action, suit or proceeding referred
to in subparagraph (i) above, or in defense of any claim, issue or matter therein, CMF shall
indemnify it against the expenses (including, without limitation, attorneys’ and
accountants’ fees) actually and reasonably incurred by it in connection therewith.

     (ii) Any indemnification under subparagraph (i) above, unless ordered by a court or
administrative forum, shall be made by CMF only as authorized in the specific case and only
upon a determination by independent legal counsel in a written opinion that such
indemnification is proper in the circumstances because the Advisor has met the applicable
standard of conduct set forth in subparagraph (i) above. Such independent legal counsel
shall be selected by CMF in a timely manner, subject to the Advisor’s approval, which
approval shall not be unreasonably withheld. The Advisor will be deemed to have approved
CMF’s selection unless the Advisor notifies CMF in writing, received by CMF within five days
of CMF’s telecopying to the Advisor of the notice of CMF’s selection, that the Advisor does
not approve the selection.

     (iii) In the event the Advisor is made a party to any claim, dispute or litigation or
otherwise incurs any loss or expense as a result of, or in connection with, the
Partnership’s or CMF’s activities or claimed activities unrelated to the Advisor, CMF shall
indemnify, defend and hold harmless the Advisor against any loss, liability, damage, cost or
expense (including, without limitation, attorneys’ and accountants’ fees) incurred in
connection therewith.

     (iv) As used in this Paragraph 6(a), the term “Advisor” shall include the Advisor, its
principals, officers, directors, stockholders and employees and the term “CMF” shall include
the Partnership.

          (b) (i) The Advisor agrees to indemnify, defend and hold harmless CMF, the Partnership and
their affiliates against any loss, liability, damage, cost or expense (including, without
limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually
and reasonably incurred by them (A) as a result of the material breach of any material
representations and warranties made by the Advisor in this Agreement, or (B) as a result of the
material breach of any material representation, warranty or covenant made by AAA Capital
Management, Inc. under the Initial Advisory Agreement, or (C) as a result of any act or omission of
the Advisor or AAA Capital Management, Inc. relating to the Partnership if there has been a final
judicial or regulatory determination or, in the event of a settlement of any action or proceeding
with the prior written consent of the Advisor or AAA Capital Management, Inc., a written opinion of
an arbitrator pursuant to Paragraph 14 hereof, to the effect that such acts or omissions violated
the terms of this Agreement in any material respect or involved negligence, bad faith, recklessness
or intentional misconduct on the part of the Advisor or AAA Capital Management Inc. (except as
otherwise provided in Section 1(g)).

7

 

     (ii) In the event CMF or the Partnership is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in connection with,
the activities or claimed activities of the Advisor, AAA Capital Management Inc. or their
principals, officers, directors, shareholder(s) or employees unrelated to CMF’s or the
Partnership’s business, the Advisor shall indemnify, defend and hold harmless CMF, the
Partnership or any of their affiliates against any loss, liability, damage, cost or expense
(including, without limitation, attorneys’ and accountants’ fees) incurred in connection
therewith.

          (c) In the event that a person entitled to indemnification under this Paragraph 6 is made a
party to an action, suit or proceeding alleging both matters for which indemnification can be made
hereunder and matters for which indemnification may not be made hereunder, such person shall be
indemnified only for that portion of the loss, liability, damage, cost or expense incurred in such
action, suit or proceeding which relates to the matters for which indemnification can be made.

          (d) None of the indemnifications contained in this Paragraph 6 shall be applicable with
respect to default judgments, confessions of judgment or settlements entered into by the party
claiming indemnification without the prior written consent, which shall not be unreasonably
withheld, of the party obligated to indemnify such party.

          (e) The provisions of this Paragraph 6 shall survive the termination of this Agreement.

          7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          (a) The Advisor represents and warrants that:

     (i) All references to the Advisor and its principals in the Memorandum are accurate in
all material respects and as to them the Memorandum does not contain any untrue statement of
a material fact or omit to state a material fact which is necessary to make the statements
therein not misleading, except that with respect to Table B in the Memorandum, this
representation and warranty extends only to the underlying data made available by the
Advisor for the preparation thereof and not to any hypothetical or pro forma adjustments.

     (ii) The information with respect to the Advisor set forth in the actual performance
tables in the Memorandum is based on all of the customer accounts managed on a discretionary
basis by the Advisor’s principals and/or the Advisor during the period covered by such
tables and required to be disclosed therein.

     (iii) The Advisor will be acting as a commodity trading advisor with respect to the
Partnership and not as a securities investment adviser and is duly registered with the CFTC
as a commodity trading advisor, is a member of the NFA, and is in compliance with such other
registration and licensing requirements as shall be necessary to enable it to perform its
obligations hereunder, and agrees to maintain and renew such registrations and licenses
during the term of this Agreement.

8

 

     (iv) The Advisor is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Texas and has full limited partnership power and
authority to enter into this Agreement and to provide the services required of it hereunder.

     (v) The Advisor will not, by acting as a commodity trading advisor to the Partnership,
breach or cause to be breached any undertaking, agreement, contract, statute, rule or
regulation to which it is a party or by which it is bound.

     (vi) This Agreement has been duly and validly authorized, executed and delivered by the
Advisor and is a valid and binding agreement enforceable in accordance with its terms.

     (vii) At any time during the term of this Agreement that a memorandum relating to the
Units is required to be delivered in connection with the offer and sale thereof, the Advisor
agrees upon the request of CMF to provide the Partnership with such information as shall be
necessary so that, as to the Advisor and its principals, such memorandum is accurate.

     (viii) In the event that the Advisor forms another commodity pool unrelated to CMF with
substantially similar investors, whether or not the Advisor terminates this Agreement or
continues trading for the Partnership, the Advisor shall pay to CMF all expenses incurred by
CMF and the Partnership in connection with the organization and offering of the Partnership,
including but not limited to attorneys’, accountants’ and filing fees, to the extent that
CMF has not previously been reimbursed by the Partnership.

          (ix) The Advisor agrees that it shall be responsible for any liability of AAA Capital
Management, Inc. that arises under the Initial Advisory Agreement.

          (b) CMF represents and warrants for itself and the Partnership that:

     (i) The Memorandum (as from time to time amended or supplemented, which amendment or
supplement is approved by the Advisor as to descriptions of itself and its actual
performance) does not contain any untrue statement of a material fact or omit to state a
material fact which is necessary to make the statements therein not misleading, except that
the foregoing representation does not apply to any statement or omission concerning the
Advisor in the Memorandum, made in reliance upon, and in conformity with, information
furnished to CMF by or on behalf of the Advisor expressly for use in the Memorandum (it
being understood that the hypothetical and pro forma adjustments in Table B were not
furnished by the Advisor).

     (ii) It is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full limited liability company
power and authority to perform its obligations under this Agreement.

     (iii) CMF and the Partnership have the capacity and authority to enter into this
Agreement on behalf of the Partnership.

9

 

     (iv) This Agreement has been duly and validly authorized, executed and delivered on
CMF’s and the Partnership’s behalf and is a valid and binding agreement of CMF and the
Partnership enforceable in accordance with its terms.

     (v) CMF will not, by acting as General Partner to the Partnership and the Partnership
will not, breach or cause to be breached any undertaking, agreement, contract, statute, rule
or regulation to which it is a party or by which it is bound which would materially limit or
affect the performance of its duties under this Agreement.

     (vi) It is registered as a commodity pool operator and is a member of the NFA, and it
will maintain and renew such registration and membership during the term of this Agreement.

     (vii) The Partnership is a limited partnership duly organized and validly existing
under the laws of the State of New York and has full limited partnership power and authority
to enter into this Agreement and to perform its obligations under this Agreement.

     8. COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.

     (a) The Advisor agrees as follows:

     (i) In connection with its activities on behalf of the Partnership, the Advisor will
comply with all applicable rules and regulations of the CFTC, NFA and/or the commodity
exchange on which any particular transaction is executed.

     (ii) The Advisor will promptly notify CMF of the commencement of any material suit,
action or proceeding involving it, whether or not any such suit, action or proceeding also
involves CMF. The Advisor will provide CMF with copies of any correspondence from or to the
CFTC, NFA or any commodity exchange in connection with an investigation or audit of the
Advisor’s business activities.

     (iii) In the placement of orders for the Partnership’s account and for the accounts of
any other client, the Advisor will utilize a pre-determined, systematic, fair and reasonable
order entry system, which shall, on an overall basis, be no less favorable to the
Partnership than to any other account managed by the Advisor. The Advisor acknowledges its
obligation to review the Partnership’s positions, prices and equity in the account managed
by the Advisor daily and within two business days to notify, in writing, the broker and CMF
and the Partnership’s brokers of (i) any error committed by the Advisor or its principals or
employees; (ii) any trade which the Advisor believes was not executed in accordance with its
instructions; and (iii) any discrepancy with a value of $10,000 or more (due to differences
in the positions, prices or equity in the account) between its records and the information
reported on the account’s daily and monthly broker statements.

     (iv) The Advisor will maintain a net worth of not less than $1,000,000 during the term
of this Agreement.

10

 

     (v) The Advisor will make no representations, other than those contained in the
Memorandum, to investors or prospective investors in the Partnership with respect to the
offering and sale of Units in the Partnership without the prior written approval of CMF.

     (b) CMF agrees for itself and the Partnership that:

     (i) CMF and the Partnership will comply with all applicable rules and regulations of
the CFTC and/or the commodity exchange on which any particular transaction is executed.

     (ii) CMF will promptly notify the Advisor of the commencement of any material suit,
action or proceeding involving it or the Partnership, whether or not such suit, action or
proceeding also involves the Advisor.

     (iii) CMF will be responsible for compliance with the USA Patriot Act and related anti-money
laundering regulations with respect to the Partnership and its limited partners.

     9. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof.

     10. ASSIGNMENT. This Agreement may not be assigned by any party without the express
written consent of the other parties.

     11. AMENDMENT. This Agreement may not be amended except by the written consent of the
parties.

     12. NOTICES. All notices, demands or requests required to be made or delivered under
this Agreement shall be in writing and delivered personally or by registered or certified mail or
expedited courier, return receipt requested, postage prepaid, to the addresses below or to such
other addresses as may be designated by the party entitled to receive the same by notice similarly
given:

11

 

If to CMF:

Citigroup Managed Futures LLC

731 Lexington Avenue

25th Floor

New York, New York 10022

Attention: David J. Vogel

If to the Advisor:

AAA Capital Management Inc.

1300 Post Oak Boulevard

Suite 350

Houston, Texas 77056

Attention: A. Anthony Annunziato

with a copy to:

David R. Allen, Esq.

407 East Main Street

Murfreesboro, TN 37130

     13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

     14. ARBITRATION. The parties agree that any dispute or controversy arising out of or
relating to this Agreement or the interpretation thereof, shall be settled by arbitration in
accordance with the rules, then in effect, of the NFA or, if the NFA shall refuse jurisdiction,
then in accordance with the rules, then in effect, of the American Arbitration Association;
provided, however, that the power of the arbitrator shall be limited to
interpreting this Agreement as written and the arbitrator shall state in writing his reasons for
his award. Judgment upon any award made by the arbitrator may be entered in any court of competent
jurisdiction.

     15. NO THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to this
Agreement

12

 

     IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the
undersigned as of the day and year first above written.

	 	 	 	 	 
	 	CITIGROUP MANAGED FUTURES LLC

 	 
	 	By  	/s/ David J. Vogel
 	 
	 	 	David J. Vogel 	 
	 	 	President and Director 	 
	 

SALOMON SMITH BARNEY AAA ENERGY FUND L.P. II

By: Citigroup Managed Futures LLC

(General Partner)

	 	 	 	 	 
	 	By  	                                   /s/ David J. Vogel
 	 
	 	 	David J. Vogel 	 
	 	 	President and Director 	 
	 

AAA CAPITAL MANAGEMENT ADVISORS, LTD.

By: AAA Capital Management, Inc.

     (General Partner)

	 	 	 	 	 
	 	By  	
/s/ A. Anthony Annunziato
 	 
	 	 	A. Anthony Annunziato 	 
	 	 	President 	 
	 

Acknowledged and agreed to by:

AAA CAPITAL MANAGEMENT, INC.

	 	 	 	 	 	 	 
	By:	 	/s/ A. Anthony Annunziato	 	 
	 	 	 	 	 
	 

	 	Name:
	 	A. Anthony Annunziato	 	 
	 

	 	Title:
	 	Presidentexv10w4

Exhibit 10.4

AMENDED AND RESTATED AGENCY AGREEMENT

AAA CAPITAL ENERGY FUND L.P. II

(A NEW YORK LIMITED PARTNERSHIP)

UNITS OF LIMITED PARTNERSHIP INTEREST

November 11, 2009

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Morgan Stanley Smith Barney LLC,

on behalf of its Smith Barney Channel

2000 Westchester Avenue

Purchase, New York 10577

Re: AAA Capital Energy Fund L.P. II

Ladies and Gentlemen:

     AAA Capital Energy Fund L.P. II (formerly known as Citigroup AAA Energy Fund L.P. II) (the
“Partnership”) is organized as a limited partnership under the New York Revised Uniform Limited
Partnership Act, as amended and in effect on the date hereof (the “Partnership Act”) for the
purpose of speculative trading, either directly or indirectly, in commodity interests including,
but not limited to futures contracts, swaps, options, spot, and forward contracts. Citigroup
Global Markets Inc.’s predecessor entity, Salomon Smith Barney Inc., the Partnership and Ceres
Managed Futures LLC (formerly known as Citigroup Managed Futures LLC), a Delaware limited liability
company (the “General Partner”), have been party to an agency agreement dated May 31, 2002 (as
amended, the “Initial Agency Agreement”). This Amended and Restated Agency Agreement (the
“Agreement”) supersedes the Initial Agency Agreement in all respects.

     The General Partner desires to raise additional capital for the Partnership by the continued
sale of units of limited partnership interest therein (the “Units”) to certain qualified investors
pursuant to Rule 506 of Regulation D (“Reg. D”) under section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”). The General Partner, the Partnership, the business of the
Partnership and the Units are described in a Private Placement Offering Memorandum and Disclosure
Document dated August 1, 2009, prepared by the General Partner. As used in this Agreement,
“Memorandum” refers to that Private Placement Offering Memorandum and Disclosure Document,
including the appendices thereto, unless such memorandum or appendices have been supplemented or
amended, in which case the term shall refer, from and after the time the supplement or amendment is
delivered to each of you, to the

 

 

memorandum and appendices as so amended and supplemented. The commodity trading advisor to
the Partnership is currently AAA Capital Management Advisors, Ltd.

     The subscribers for Units will be required to execute the Subscription Agreement, a copy of
which is attached as an appendix to the Memorandum, and to tender or cause to be tendered for each
Unit subscribed cash in the amount of the net asset value per Unit on the date of purchase.
Subscribers for Units whose Subscription Agreements are accepted by the General Partner will become
limited partners of the Partnership (the “Limited Partners”) upon the execution by the General
Partner as attorney-in-fact for each such subscriber of a Limited Partnership Agreement, as may be
amended and restated from time to time, a copy of which is attached as an appendix to the
Memorandum (the “Partnership Agreement”), and at the time such subscribers’ names are entered in
the books and records of the Partnership.

     Section 1. Appointment of Agent.

     On the basis of the representations, warranties and covenants contained in this Agreement, but
subject to the terms and conditions set forth in it, Citigroup Global Markets Inc. and Morgan
Stanley Smith Barney LLC, on behalf of its Smith Barney Channel, are hereby appointed non-exclusive
agents of the Partnership during the offering period specified in this Section, for the purpose of
finding subscribers for the Units for the account and risk of the Partnership through a private
offering. The offering period will continue until the General Partner terminates it (with
reasonable advance notice) or until up to 350,000 Units, or such additional duly authorized amount,
have been subscribed (the “Continuous Offering”). Units or partial Units sold during the
Continuous Offering will be sold at net asset value per Unit as of the last day of each month,
provided that the General Partner may determine to not accept any offers to purchase Units in a
particular month. Subject to the performance by the General Partner of all of its obligations to
be performed under this Agreement and to the completeness and accuracy of all material
representations and warranties of the General Partner contained in this Agreement, you each hereby
accept such agency and agree on the terms and conditions set forth in this Agreement to use
reasonable efforts during the Continuous Offering to find subscribers for the Units subject to
market demand. Such offering of Units shall be subject to prior approval in accordance with your
internal policies. Each of you agree that your agency under this Agreement, which is coupled with
an interest and, therefore, is not terminable by the General Partner without your permission, will
continue until the termination of the Continuous Offering or until such time as all Units sold by
you have been redeemed, whichever is later.

	 	 	Section 2. Representations and Warranties of the Partnership and the General
Partner.

     The Partnership and the General Partner jointly and severally represent and warrant to each of
you, individually, for your benefit, and for the benefit of the purchasers of the Units sold by you
that:

     (a) They will deliver to you such number of copies of the Memorandum as you may reasonably
request, regardless of whether the Units are offered solely to “accredited investors” as defined in
Rule 501(a) of Reg. D. They will not make any amendment or

-2-

 

supplement to the Memorandum until they have given you a copy thereof and reasonable notice of
the same, and no such amendment or supplement, if material, will be made if you reasonably object
thereto.

     (b) The Memorandum complies with Rule 502(b)(2) of Reg. D and the information to be made
available or furnished to each purchaser of a Unit pursuant to Section 5(f) hereof or otherwise
will be sufficient to comply with Rule 502(b)(2)(iv) and 502(b)(2)(v) of Reg. D.

     (c) The Memorandum will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     (d) All action required under the Partnership Agreement or otherwise to be taken by the
General Partner before the subscription for and sale of the Units to subscribers therefor has been
taken or before the Monthly Closing dates, as defined in Section 4 hereof, will have been taken,
and upon (i) payment of the consideration therefor specified in the Subscription Agreement, (ii)
acceptance by the General Partner of each subscriber acceptable to the General Partner, and (iii)
the payment of any required filing fee, the subscribers will become Limited Partners of the
Partnership entitled to all the rights of Limited Partners under the Partnership Agreement and the
Partnership Act. The Units, when sold and paid for as contemplated by the Memorandum, will
represent validly authorized and duly issued limited partnership interests in the Partnership and
will conform to all statements relating thereto contained in the Memorandum, including the
Partnership Agreement. The General Partner shall maintain records required of a registered
commodity pool operator pursuant to the rules of each of the Commodity Futures Trading Commission
(“CFTC”) and the National Futures Association.

     (e) The Partnership is a limited partnership duly and validly organized pursuant to the
Partnership Agreement and the laws of New York, and is validly existing under, and subject to, the
laws of New York with full power and authority to conduct the business in which it proposes to
engage as described in the Memorandum. A Limited Partner will have no liability in excess of his
capital contribution and his share of Partnership assets and undistributed profits except as set
forth in Section 7(f)(2) of the Partnership Agreement and in the Partnership Act.

     (f) There is no action, suit, litigation or proceeding before or by any court or governmental
agency, federal, state or local, pending or threatened against or affecting or involving the
property or business of the General Partner, or the business of the Partnership, that would
materially and adversely affect the condition (financial or otherwise), business or prospects of
the General Partner or the Partnership.

     (g) Other than as disclosed to you, neither the Partnership, the General Partner, nor any
person directly or indirectly affiliated with either of them has, either directly or through an
agent, sold or offered for sale or solicited offers to subscribe for or buy, or approached
potential investors for or otherwise negotiated in respect of, the Units except for the activities
of the General Partner in approaching potential investors undertaken in cooperation with Citigroup
Global Markets Inc. and Morgan Stanley Smith Barney LLC, on behalf of its Smith Barney

-3-

 

Channel, after advance consultation with either Citigroup Global Markets Inc. or Morgan
Stanley Smith Barney LLC, on behalf of its Smith Barney Channel, as applicable; and neither the
Partnership, the General Partner nor any person directly or indirectly affiliated with any of them
has, either directly or through an agent, participated in the organization or management of any
partnership or other entity, or has engaged in any other activity, in a manner or under
circumstances that would jeopardize the status of the offering of the Units as an exempted
transaction under the Securities Act or under the laws of any state in which it is represented by
the General Partner that the offering may be made.

     (h) This Agreement and the Partnership Agreement have been duly and validly authorized,
executed and delivered by and on behalf of the General Partner and constitute valid and binding
agreements of the General Partner enforceable in accordance with their terms. This Agreement and
the Subscription Agreements have been or will be duly and validly authorized, executed and
delivered by and on behalf of the Partnership and constitute or will constitute valid and binding
agreements of the Partnership enforceable in accordance with their terms.

     (i) The execution and delivery of this Agreement, the Subscription Agreements and the
Partnership Agreement, and the consummation of the transactions contemplated in this Agreement and
in the Memorandum, do not conflict with and will not constitute a breach of, or default under, the
certificate of formation or limited liability company agreement of the General Partner or any
agreement or instrument by which the General Partner is bound by any order, rule or regulation
applicable to it of any court or any governmental body or administrative agency having jurisdiction
over it.

     (j) A separate escrow account has been opened at JPMorgan Chase Bank, New York, New York (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 entered into with the Escrow Agent.
During the Continuous Offering, the General Partner may elect to hold subscription proceeds at a
different bank. If the General Partner elects to hold subscription proceeds at a different bank,
it will notify you promptly and provide you with details of the new account.

     Section 3. Representations and Warranties of Citigroup Global Markets Inc. and Morgan
Stanley Smith Barney LLC.

     Each of you represent and warrant, individually, to and for the benefit of the Partnership and
the General Partner that:

     (a) You will not offer or sell the Units by any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Reg. D.

     (b) Where required by applicable state law or regulation, you will initiate contact with a
prospective offeree only after determining that the suitability and sophistication standards
described in the Memorandum are likely to be satisfied with respect to such prospective offeree

-4-

 

and, where applicable, only after having obtained an executed Purchaser Representative
Questionnaire.

     (c) You will make offers to sell Units to, or solicit offers to subscribe for Units from,
persons in only those states or other jurisdictions where the General Partner has either qualified
or registered the offering for sale or where the General Partner has determined that an exemption
from such qualification or registration is available under the applicable securities or “blue sky”
statutes of such states or other jurisdictions. You will not offer or sell Units to any person
unless, immediately before making such offers or sales, you reasonably believe such person (i)
would be able to represent that such person is acquiring the Units for such person’s own account as
principal for investment and not with a view to resale or distribution, (ii) qualifies as an
accredited investor under Rule 501 of Reg. D (unless otherwise permitted by the General Partner)
and (iii) meets such other suitability standards as are specified in the Memorandum under the
caption “Who May Invest” and the other conditions contained in the Subscription Agreement.

     (d) You will not offer the Units for sale to, or solicit any offers to subscribe for the Units
from, any offeree who resides in a state whose securities or “blue sky” laws require offerees to
meet specified qualifications unless such offeree meets such qualifications or which laws require
offerees to receive disclosure documents until you have delivered (or directed the General Partner
to deliver) the Memorandum, the Partnership Agreement, and any other agreement or document that may
be attached as an exhibit or appendix referred to in and distributed with the Memorandum or any
other information provided by the General Partner which is required to be delivered to purchasers
pursuant to Rule 502(b)(2) of Reg. D to such offeree, and within a reasonable time prior to the
Monthly Closing you shall deliver (or cause the General Partner to deliver) all such documents to
all persons who are to purchase the Units, to the extent they have not theretofore received such
documents. In connection with the offering, you will not represent to any person acquiring Units
any material facts relating to the offering unless such facts are contained in the Memorandum or
have been provided to you in writing by the General Partner.

     (e) You will maintain a record of all information obtained by you indicating that subscribers
for Units placed by you meet the suitability standards referred to in Section 3(c) hereof. The
General Partner, in its sole discretion, will approve or reject the subscriptions and notify you of
the same.

     (f) You are a member in good standing of the Financial Industry Regulatory Authority, Inc.

     (g) You are in compliance with applicable anti-money laundering laws (including the USA
PATRIOT Act) and related regulations.

     (h) You acknowledge that, in its sole discretion, the General Partner may in the future engage
additional selling agents for the Partnership. Compensation of any additional selling agents shall
be determined by the General Partner in its sole discretion.

-5-

 

     (i) You shall be responsible for compliance with all applicable anti-money laundering laws
(including the USA PATRIOT Act) and related regulations with respect to all purchasers of Units
placed by you. Each of you agree that you will fully cooperate with each other and provide all
information, subject to applicable privacy and confidentiality obligations, as is necessary to
permit Citigroup Global Markets Inc. and Morgan Stanley Smith Barney LLC to comply with the
foregoing representation and warranty.

     Section 4. Closings.

     During the Continuous Offering, closings may be held as of the last business day of each month
(“Monthly Closings”) for each month the General Partner accepts subscriptions.

     Section 5. Covenants of the Partnership and the General Partner.

     Each of the Partnership and the General Partner covenant with each of you, separately, that:

     (a) If any event occurs that relates to or affects the business or condition (financial or
other) of the General Partner or the Partnership which makes it necessary to amend or supplement
the Memorandum in order that the Memorandum will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a subscriber, the General
Partner forthwith will prepare and furnish to you a reasonable number of copies of the amendment or
amendments of, or supplement or supplements to, the Memorandum (in form and substance satisfactory
to you and your counsel) that will so amend or supplement the Memorandum.

     (b) They will qualify or register the Units for offering and sale under, or establish the
exemption of the offering and sale of the Units from qualification or registration under, the
applicable securities or “blue sky” laws of the jurisdictions listed in Appendix I hereto
and use reasonable efforts to qualify in such other jurisdictions as you may reasonably request in
writing; provided, however, that none of them will be obligated to qualify as a
dealer in securities in any jurisdiction in which it is not so qualified. The General Partner will
promptly notify you in writing of such qualification, registration or exemption in each such
jurisdiction and of any modification, rescission or withdrawal of any such qualification,
registration or exemption. The General Partner will not consummate a sale of a Unit in any
jurisdiction in which such sale may not be lawfully made and will not consummate any sale otherwise
than in accordance with the restrictions and limitations, if any, set forth or referred to in such
survey.

     (c) The General Partner will notify you promptly if it becomes aware that the Memorandum
contains any untrue statement of material fact or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading.

-6-

 

     (d) The Partnership will apply the proceeds from the sale of the Units for the purposes set
forth under “Use of Proceeds” in the Memorandum in substantially the amounts and in the manner
indicated thereunder.

     (e) Neither they nor any person directly or indirectly affiliated with any of them is or will
be engaged, as a general partner, sponsor or otherwise (i) in the organization or management of any
partnership, fund or other entity, in a manner or under circumstances which, in the opinion of
their counsel, will jeopardize the status of the offering of the Units as an exempted transaction
under the Securities Act or under the laws of any state in which it is represented by them that the
offering may be made or (ii) in any offering of securities which, when integrated with the offering
of the Units in the manner prescribed by Rule 501(a) of Reg. D and SEC Release No. 33-4552 (Nov. 6,
1962) will jeopardize the status of the offering of the Units as an exempted transaction under Reg.
D.

     (f) Subject to Section 11 hereof, at all times during the Continuous Offering, they will (i)
make available to each potential purchaser and to the purchaser’s representative, if any, such
information (in addition to that contained in the Memorandum) concerning themselves, the offering
and any other relevant matters, as they possess or can acquire without unreasonable effort or
expense, and (ii) provide to each potential purchaser and to any purchaser representatives the
opportunity to ask questions of, and receive answers from, them concerning the terms and conditions
of the offering and the business of the Partnership and to obtain any other additional information,
to the extent they possess the same or can acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information furnished to the potential purchaser or any
purchaser representatives.

     (g) They will provide to each purchaser the information required to be delivered by Rule
502(b)(2)(iii) and 502(b)(iv).

     (h) Within 15 days of receiving copies from you of information indicating that subscribers
meet the suitability standards, the General Partner will approve or reject the subscriptions and
notify you of the same.

     (i) The General Partner shall file a Form D with the Securities and Exchange Commission
pursuant to Rule 503 under Reg. D in a timely manner with respect to all subscriptions accepted by
the General Partner. The General Partner shall comply with any filing requirement imposed by the
laws of any state or jurisdiction in which sales are made. The General Partner shall furnish you
and your counsel with copies of all filings made on Form D pursuant hereto.

     (j) The General Partner shall notify you within a reasonable period of time if it engages an
additional selling agent for the Partnership.

-7-

 

	 	 	Section 6. Acknowledgment of Payment of Compensation to You and Your Financial
Advisors.

     Pursuant to the Customer Agreement between Citigroup Global Markets Inc. and the Partnership,
the Partnership shall pay to Citigroup Global Markets Inc. a brokerage commission equal to $18 per
round-turn on futures transactions and $9 per side on options transactions. The Partnership shall
pay Citigroup Global Markets Inc. the same brokerage commission on a futures equivalent basis for
forward transactions entered on its behalf. The Partnership shall also pay Citigroup Global
Markets Inc. a brokerage commission equal to $5.00 per swap transaction. The Partnership and the
General Partner acknowledge that during the term of the Partnership a portion of such brokerage
commissions will be paid to Morgan Stanley Smith Barney LLC (or an additional selling agent) by
Citigroup Global Markets Inc. and each of you will use a portion of the brokerage commissions to
pay your respective financial advisors who place Units and who are registered with the CFTC as
associated persons.

     Section 7. Conditions of Your Obligations.

     Your respective obligations under this Agreement are subject to the accuracy of and compliance
in all material respects with the representations and warranties of the Partnership and the General
Partner made in Section 2 hereof and to the performance by the Partnership and the General Partner
in all material respects of their obligations to you under this Agreement.

     If any of the conditions specified in this Section 7 have not been fulfilled when and as
required by this Agreement to be fulfilled by the Partnership or the General Partner with respect
to a party to this Agreement, such party may withdraw as a party to this Agreement by notifying the
General Partner of such withdrawal in writing at any time at or before any Monthly Closing and any
such withdrawal will be without liability or obligation of any party to any other party except as
otherwise provided in Section 5 and Section 9 hereof.

     For the avoidance of doubt, if one of you withdraws as a party to this Agreement pursuant to
this Section 7, the Agreement shall continue in full force and effect with respect to the remaining
parties to the Agreement.

	 	 	Section 8. Conditions of the Obligations of the Partnership and the General
Partner.

     The obligations of the Partnership and the General Partner under this Agreement with respect
to each of you are subject to the performance by you of your respective obligations under the same
in all material respects and to the further condition that you have offered the Units for sale, or
solicited offers to subscribe for or buy Units, or otherwise negotiated with any person with
respect to the Units, only in such manner and under such circumstances as are in compliance with
the securities or “blue sky” laws of the jurisdictions designated by you in accordance with Section
5(b) hereof.

     For the avoidance of doubt, if the Partnership’s and the General Partner’s obligations with
respect to either of you cease pursuant to this Section 8, the Partnership’s and

-8-

 

General Partner’s obligations with respect to the other party to the Agreement shall continue
in accordance with the terms of this agreement.

     Section 9. Indemnification and Contribution.

     Each of you agree to indemnify and hold harmless the Partnership and the General Partner and
their officers, directors and employees, against any and all loss, liability, claim, damage,
expense, judgment or amount paid in settlement (including reasonable attorneys’ fees) with respect
to statements or omissions in the Memorandum made with respect to you or your respective
obligations under this Agreement made in reliance upon and in conformity with information furnished
to the General Partner by you expressly for use in the Memorandum.

     Section 10. Representations, Warranties and Agreements to Survive Delivery.

     All representations, warranties and agreements contained in this Agreement or contained in
certificates or opinions delivered pursuant to this Agreement will remain operative and in full
force and effect, regardless of any investigation made by or on behalf of either of you or by or on
behalf of the General Partner and will survive the Monthly Closings.

     Section 11. Confidentiality.

     Each party shall keep confidential any non-public information in respect of the Limited
Partners and any confidential information relating to the business of each other party to this
Agreement.

     Section 12. Notices and Authority to Act.

     All communications required to be given pursuant to this Agreement shall be in writing and, if
sent to Citigroup Global Markets Inc., will be mailed, delivered or transmitted by facsimile and
confirmed to Citigroup Global Markets Inc. at:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attention: General Counsel (Managed Futures)

or, if sent to Morgan Stanley Smith Barney LLC, on behalf of its Smith Barney Channel, will be
mailed, delivered or telegraphed and confirmed to Morgan Stanley Smith Barney LLC, on behalf of its
Smith Barney Channel, at:

Morgan Stanley Smith Barney LLC,

on behalf of its Smith Barney Channel

2000 Westchester Avenue

Purchase, New York 10577

Attention: Jeremy Beal

-9-

 

or if sent to the General Partner, will be mailed, delivered or telegraphed and confirmed to the
General Partner at:

Ceres Managed Futures LLC

55 East 59th Street — 10th Floor

New York, New York 10022

Attention: Jennifer Magro

or at such other address as may be provided in writing to the other parties.

     Section 13. Parties.

     This Agreement will inure to the benefit of and be binding upon each of you, the Partnership
and the General Partner and each of your and their respective successors, heirs and
representatives. This Agreement and its conditions and provisions are intended to be and are for
the sole and exclusive benefit of the parties to it and their respective successors, heirs and
representatives, and not for the benefit of any other person, firm or corporation unless expressly
stated otherwise.

     Section 14. Governing Law.

     This Agreement shall be governed by and construed under the laws of the State of New York.

     Section 15. Waiver.

     Any party to this Agreement may waive compliance by the other with any of the terms,
provisions and conditions set forth in this Agreement.

     Section 16. Entire Agreement.

     This Agreement contains the entire agreement between the parties to it, and is intended to
supersede any and all prior agreements between those parties, relating to the same subject matter.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

-10-

 

     If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us a counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among you, the Partnership and the General Partner, in accordance with
its terms.

Sincerely,

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	AAA CAPITAL ENERGY FUND L.P. II
	 
	 	 	 	 	 	 
	 	 	By: Ceres Managed Futures LLC

(General Partner)
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jennifer Magro	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jennifer Magro	 	 
	 

	 	Title:
	 	Chief Financial Officer and Director	 	 
	 
	 	 	 	 	 	 
	 	 	CERES MANAGED FUTURES LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jennifer Magro	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jennifer Magro	 	 
	 

	 	Title:
	 	Chief Financial Officer and Director	 	 

Confirmed, accepted and agreed to as of the

date first above written.

	 	 	 	 	 	 	 	 	 
	MORGAN STANLEY SMITH BARNEY LLC	 	CITIGROUP GLOBAL MARKETS INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael McGrath
	 	By:
	 	/s/ Laurie Hesslein	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Michael McGrath
	 	Name:
	 	Laurie Hesslein	 	 
	Title:

	 	Managing Director
	 	Title:
	 	Managing Director	 	 

-11-

 

APPENDIX I

Blue Sky Memorandum

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]