10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 333-121094 (1933 Act)

COLE CREDIT PROPERTY TRUST II, INC.

(Exact name of registrant as specified in its charter)

Maryland	20-1676382
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
2555 East Camelback Road, Suite 400	(602) 778-8700
Phoenix, Arizona 85016	(Registrant’s telephone number,
(Address of principal executive offices)	including area code)

N/A
(Former name)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ       No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o       No þ

As of August 10, 2005, there were 20,000 shares of common stock, par value $0.01, of Cole Credit Property Trust II, Inc. outstanding.

COLE CREDIT PROPERTY TRUST II, INC.
(A Development Stage Company)

INDEX

	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004 (Unaudited)	3
	Condensed Consolidated Statements of Stockholder’s Equity for the six months ended June 30, 2005 and for the Period September 29, 2004 (Date of Inception) to December 31, 2004 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and for the Period September 29, 2004 (Date of Inception) to June 30, 2005 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits	13
Signatures		14
EX-1.1 FORM OF DEALER MANAGER AGREEMENT
EX-10.4 ESCROW AGREEMENT
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO & CFO

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COLE CREDIT PROPERTY TRUST II, INC.
(A Development Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2005 and December 31, 2004
(Unaudited)

	June 30,		December 31,
	2005		2004
ASSETS
Cash	$	200,000	$	200,000
Total assets	$	200,000	$	200,000
LIABILITIES AND STOCKHOLDER’S EQUITY
Stockholder’s equity:
Preferred Stock, $.01 par value, 10,000,000 shares authorized, none issued and outstanding	$	—	$	—
Common stock, $.01 par value, 90,000,000 shares authorized, 20,000 shares issued and outstanding		200		200
Capital in excess of par value		199,800		199,800
Total liabilities and stockholder’s equity	$	200,000	$	200,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COLE CREDIT PROPERTY TRUST II, INC.
(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
For the Six Months Ended June 30, 2005 and
for the Period September 29, 2004 (Date of Inception) to December 31, 2004
(Unaudited)

	Common Stock
					Capital in		Total
	Number of		Par		Excess of		Stockholder’s
	Shares		Value		Par Value		Equity
Balance, September 29, 2004 (Date of Inception)		—	$	—	$	—	$	—
Issuance of Common Stock to Cole Holdings Corporation		20,000		200		199,800		200,000
Balance, June 30, 2005 and December 31, 2004		20,000	$	200	$	199,800	$	200,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COLE CREDIT PROPERTY TRUST II, INC.
(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2005 and
for the Period September 29, 2004 (Date of Inception) to June 30, 2005
(Unaudited)

			For the Period
			September 29, 2004
	Six Months Ended		(Date of Inception) to
	June 30, 2005		June 30, 2005
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	$	—	$	200,000
NET INCREASE IN CASH		—		200,000
CASH — Beginning of period		200,000		—
CASH — End of period	$	200,000	$	200,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COLE CREDIT PROPERTY TRUST II, INC.
(A Development Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 — Organization

Cole Credit Property Trust II, Inc., a development stage company (the “Company”), was formed on September 29, 2004 as a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”) beginning with the taxable year that will end December 31, 2005. The Company is the sole general partner of and owns a 99.9% partnership interest in Cole Operating Partnership II, LP (“Cole OP II”). Cole REIT Advisors II, LLC (the “Advisor”), the affiliated advisor to the Company, is the sole limited partner and owner of 0.1% of the partnership interests of Cole OP II. At June 30, 2005 and December 31, 2004, Cole OP II had no assets, liabilities or equity.

Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933, as amended, the Company intends to offer for sale to the public on a “best efforts” basis a minimum of 250,000 and a maximum of 45,000,000 shares of its common stock at a price of $10 per share (the “Offering”) and up to 5,000,000 additional shares pursuant to a distribution reinvestment plan under which its shareholders may elect to have distributions reinvested in additional shares at $9.15 per share. The Registration Statement was declared effective on June 27, 2005. As of June 30, 2005, no subscriptions for shares under the Offering had been received by the Company. As of August 10, 2005, the Company had received subscriptions for approximately 10,800 shares of its common stock for aggregate gross proceeds before offering costs and selling commissions of approximately $108,000. Because the Company has not yet met the minimum offering requirement set forth in the Registration Statement, no subscriptions have been accepted and no shares of common stock have been issued pursuant to the Offering. As discussed in the Registration Statement, the Company expects to use substantially all of the net proceeds from the Offering to acquire and operate commercial real estate primarily consisting of high quality, freestanding, single-tenant commercial properties net-leased to investment grade and other creditworthy tenants located throughout the United States.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The Company is in the development stage and has not begun operations. The consolidated statements include the accounts of the Company and its majority-owned subsidiary. The consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the statements for the unaudited interim period presented include all adjustments, which are of a normal and recurring nature, necessary to present a fair presentation of the results for such period. Results for this interim period are not necessarily indicative of full year results. Consolidated results of operations and cash flows for the six months ended June 30, 2004 have not been presented because the Company had not been formed and was not operational during that period.

Income Taxes

The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2005. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Concentration of Credit Risk

At June 30, 2005 and December 31, 2004, the Company had cash on deposit in one financial institution in excess of federally insured levels; however, the Company has not experienced any losses in such account. The Company limits investment of cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on cash.

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Offering and Related Costs

The Advisor funds all of the organization and offering costs on the Company’s behalf and may be reimbursed for such costs up to 1.5% of the cumulative capital raised by the Company in the Offering. As of June 30, 2005 and December 31, 2004, the Advisor had incurred organization and offering costs of approximately $679,000 and $463,000, respectively, on behalf of the Company. These costs are not included in the financial statements of the Company because such costs are not a liability of the Company until subscriptions for the minimum number of shares of common stock are received and accepted by the Company. When recorded by the Company, the offering costs, which include items such as legal and accounting fees, marketing, promotional and printing costs, will be recorded as a reduction of capital in excess of par value along with sales commissions and dealer manager fees of 7% and 1.5%, respectively. Organization costs will be expensed as incurred.

Stockholder’s Equity

At June 30, 2005 and December 31, 2004, the Company was authorized to issue 90,000,000 shares of common stock and 10,000,000 shares of preferred stock. All shares of such stock have a par value of $.01 per share. On September 29, 2004 (date of inception), the Company sold 20,000 shares of common stock, at $10 per share, to Cole Holdings Corporation, the indirect owner of limited liability company interests of the Advisor. The Company’s board of directors may authorize additional shares of capital stock and amend their terms without obtaining stockholder approval.

The par value of investor proceeds raised from the Offering will be classified as common stock, with the remainder allocated to capital in excess of par value. The Company’s share redemption program provides that all redemptions during any calendar year, including those upon death or qualifying disability, are limited to those that can be funded with proceeds raised from the Company’s distribution reinvestment plan.

Recent Accounting Pronouncements

Statement of Financial Accounting Standards (“SFAS”) No. 153, “Exchanges of Nonmonetary Assets,” is effective for the fiscal years beginning after June 15, 2005. This statement addresses financial accounting and reporting obligations associated with the exchange of nonmonetary assets. The statement eliminates the exception to the fair value for exchanges of similar productive assets issued in APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” and replaces it with a general exception for exchange transactions that do not have commercial substance, that is, transactions that are not expected to result in significant changes in the cash flows of the reporting entity. The adoption of this interpretation is not expected to have a significant impact on the financial position or results of operations of the Company.

SFAS No. 123R, “Share Based Payment,” is effective for the first fiscal year beginning after June 15, 2005. The Company will be required to adopt the new standard on January 1, 2006. This statement requires companies to expense the value of employee stock options and similar awards. The Company does not have an employee stock option plan. Accordingly, the Company does not believe that its adoption of SFAS 123R in 2006 will impact its consolidated financial position, results of operations or cash flows

Note 3 — Related-Party Transactions and Arrangements

Certain affiliates of the Company will receive fees and compensation in connection with the Offering, and the acquisition, management and sale of the assets of the Company. Cole Capital Corporation (“Cole Capital”), the affiliated dealer-manager, will receive a commission of up to 7% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers. Cole Capital intends to reallow 100% of commissions earned to participating broker-dealers. In addition, up to 1.5% of gross proceeds before reallowance to participating broker-dealers, will be paid to Cole Capital as a dealer-manager fee. Cole Capital in its sole discretion, may reallow a portion of its dealer-manager fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on such factors as the volume of shares sold by such participating broker-dealers and marketing support incurred as compared to those of the other participating broker-dealers.

The Advisor or its affiliates may receive up to 1.5% of gross offering proceeds for reimbursement of organization and offering expenses. All organization and offering expenses (excluding selling commissions and the dealer-manager fee) are being paid for by the Advisor or its affiliates and could be reimbursed by the Company up to 1.5% of gross offering proceeds. The Advisor or its affiliates also will receive acquisition and advisory fees of up to 2% of the contract purchase price of each asset for the acquisition, development or construction of real property and will be reimbursed for acquisition costs incurred in the process of acquiring properties. The Company expects the acquisition expenses to be approximately 0.5% of the

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purchase price of each property.

If the Advisor provides services, as determined by the independent directors, in connection with the origination or refinancing of any debt financing obtained by the Company that is used to acquire properties or to make other permitted investments, the Company will pay the Advisor a financing coordination fee equal to 1% of the amount available under such financing; provided, however, that the Advisor shall not be entitled to a financing coordination fee in connection with the refinancing of any loan secured by any particular property that was previously subject to a refinancing in which the Advisor received such a fee. Financing coordination fees payable from loan proceeds from permanent financing will be paid to the Advisor as the Company acquires such permanent financing. However, no acquisition fees will be paid on loan proceeds from any line of credit until such time as all net offering proceeds have been invested by the Company.

The Company expects to pay Fund Realty Advisors, Inc. (“Fund Realty”), its property manager, fees for the management and leasing of the Company’s properties. Such fees are expected to equal 2% of gross revenues plus leasing commissions at prevailing market rates; provided however, that the aggregate of all property management and leasing fees paid to affiliates plus all payments to third parties will not exceed the amount that other nonaffiliated management and leasing companies generally charge for similar services in the same geographic location. Fund Realty may subcontract its duties for a fee that may be less than the fee provided for in the property management agreement.

The Company will pay the Advisor an annual advisor asset management fee of 0.25% of aggregate asset value (the “Asset Management Fee”). The fee will be payable monthly in an amount equal to 0.02083% of aggregate asset value as of the last day of the immediately preceding month.

If the Advisor or its affiliates provides a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of one or more properties, the Company will pay the Advisor up to one-half of the brokerage commission paid, but in no event to exceed an amount equal to 2% of the sales price of each property sold. In no event will the combined real estate commission paid to the Advisor, its affiliates and unaffiliated third parties exceed 6% of the contract sales price. In addition, after investors have received a return on their net capital contributions and an 8% annual cumulative, non-compounded return, then the Advisor is entitled to receive 10% of remaining net sale proceeds.

Upon listing of the Company’s common stock on a national securities exchange or included for quotation on The Nasdaq National Market, a fee equal to 10% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing, exceeds the sum of the total amount of capital raised from investors and the amount of cash flow necessary to generate an 8% annual cumulative, non-compounded return to investors will be paid to the Advisor (the “Subordinated Incentive Listing Fee”).

Upon termination of the advisory agreement with the Advisor, other than termination by the Company because of a material breach of the advisory agreement by the Advisor, a performance fee of 10% of the amount, if any, by which (i) the appraised asset value at the time of such termination plus total distributions paid to stockholders through the termination date exceeds (ii) the aggregate capital contribution contributed by investors less distributions from sale proceeds plus payment to investors of an 8% annual, cumulative, non-compounded return on capital. No subordinated performance fee will be paid if the Company has already paid or become obligated to pay the Advisor a Subordinated Incentive Listing Fee.

The Company will reimburse the Advisor for all expenses it paid or incurred in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse for any amount by which it’s operating expenses (including the Asset Management Fee) at the end of the four preceding fiscal quarters exceeds the greater of (i) 2% of average invested assets, or (ii) 25% of net income other than any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. The Company will not reimburse for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions.

Note 4 — Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

8

Note 5 — Independent Director’s Stock Option Plan

The Company has a stock option plan (the “IDSOP”), which authorizes the grant of non-qualified stock options to the Company’s independent directors, subject to the absolute discretion of the board and the applicable limitations of the plan. The Company intends to grant options under the IDSOP to each qualifying director annually. The exercise price for the options granted under the IDSOP initially will be $9.15 per share (or greater, if such higher price as is necessary so that such options shall not be considered a “nonqualified deferred compensation plan” under Section 409A of the Internal Revenue Code of 1986, as amended). It is intended that the exercise price for future options granted under the IDSOP will be at least 100.0% of the fair market value of the Company’s common stock as of the date that the option is granted. As of June 30, 2005 and December 31, 2004, the Company had issued options to purchase 10,000 and no shares, respectively, at $9.15 per share. A total of 1,000,000 shares have been authorized and reserved for issuance under the IDSOP.

Note 6 — Subsequent Events

Sale of Shares of Common Stock

From July 1, 2005 through August 10, 2005, the Company received subscriptions for approximately 10,800 shares of its common stock under the Offering. Because the Company has not yet met the minimum offering requirement set forth in the Registration Statement, no subscriptions have been accepted and no shares of common stock have been issued pursuant to the Offering.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our accompanying financial statements and notes thereto.

Forward-Looking Statements

This section contains forward-looking statements, including discussion and analysis of the financial condition of us and our subsidiary, our anticipated capital expenditures required to commence operations, amounts of anticipated cash distributions to our stockholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on their knowledge and understanding of our business and industry. Words such as “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. Investors are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Report on Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Factors that could cause actual results to differ materially from any forward-looking statements made in the Form 10-Q include changes in general economic conditions, changes in real estate conditions, construction costs that may exceed estimates, construction delays, increases in interest rates, lease-up risks, inability to obtain new tenants upon the expiration of existing leases, and the potential need to fund tenant improvements or other capital expenditures out of operating cash flow. The forward-looking statements should be read in light of the risk factors identified in the “Risk Factors” section of the Registration Statement on Form S-11, relating to the Offering, as filed with the Securities and Exchange Commission.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Critical Accounting Policies and Estimates

As of June 30, 2005, we were in the development stage and had not commenced principal operations. As of June 30, 2005 and December 31, 2004, the only asset we held was cash of $200,000. The valuation of this amount does not require estimates or judgment by management.

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Liquidity and Capital Resources

We expect to meet our short-term operating liquidity requirements initially through advances from our advisor or its affiliates, from time to time, as we need to fund our operating expenses incurred before we have raised the minimum offering of 250,000 shares. After we meet the minimum offering requirement and begin admitting investors under the Offering, we expect to meet our short-term operating liquidity requirements from the proceeds of the Offering and that any advances from our advisor will be repaid as funds are available after meeting our current liquidity requirements, subject to certain limitations on reimbursement. We do not expect our operating costs to be significant until we make our initial investments. As of June 30, 2005, we have not received any advances from our advisor. We expect that any advances will be made under a revolving loan arrangement with our advisor. We expect that this arrangement will allow for repayments to be made as funds are available from the offering proceeds or from operating cash flows, but no later than two years from the date of the advance. The terms of the arrangement will be finalized upon the initial advance, if any. The offering and organizational costs associated with the Offering will initially be paid by our advisor, which may be reimbursed for such costs up to 1.5% of the capital raised by us in the Offering. As of June 30, 2005, our advisor had paid approximately $679,000 of such costs. After we make our initial investments from the proceeds of the Offering, we expect our short-term operating liquidity requirements to be met through net cash provided by property operations. Operating cash flows are expected to increase as properties are added to our portfolio.

On a long-term basis, our principal demands for funds will be for property acquisitions, either directly or through investment interests, for the payment of operating expenses and distributions and for the payment of interest on our outstanding indebtedness and other investments. Generally, cash needs for items other than property acquisitions will be met from operations and property acquisitions from funding by public offerings of our shares. However, there may be a delay between the sale of our shares and our purchase of properties that could result in a delay in the benefits to our stockholders, if any, of returns generated from our investment operations. Our advisor will evaluate potential additional property acquisitions and engage in negotiations with sellers on our behalf. Investors should be aware that after a purchase contract is executed that contains specific terms, the property will not be purchased until the successful completion of due diligence, which includes review of the title insurance commitment, an appraisal and an environmental analysis. In some instances, the proposed acquisition will require the negotiation of final binding agreements, which may include financing documents. During this period, we may decide to temporarily invest any unused proceeds from the Offering in certain investments that could yield lower returns than the properties. These lower returns may affect our ability to make distributions.

Our board of directors will determine the amount of distributions to our stockholders and will base such determination on a number of factors, including funds available for payment of distributions, financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code.

Potential future sources of capital include proceeds from the Offering, proceeds from secured or unsecured financings from banks or other lenders, proceeds from the sale of properties and undistributed funds from operations. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures. Currently, we do not have a credit facility or other third party source of liquidity. To the extent we do not secure a credit facility or other third party source of liquidity, we will be dependent upon the proceeds of the Offering and income from operations in order to meet our long-term liquidity requirements and to fund our distributions.

Results of Operations

As June 30, 2005, no significant operations had commenced because we were in our development stage. No operations will commence until we have sold 250,000 shares of our common stock under the Offering. Our management is not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally (such as lower capitalization rates, which lead to lower rents), that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition and operations of real properties and mortgage loans, other than those referred to in our Registration Statement on Form S-11.

Inflation

The real estate market has not been affected significantly by inflation in the past several years due to the relatively low inflation rate. However, in the event inflation does become a factor, the leases on the real estate we may acquire may not include provisions that would protect us from the impact of inflation.

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Related-Party Transactions and Agreements

We have entered into agreements with our Advisor and its affiliates, whereby we pay certain fees or reimbursements to our Advisor or its affiliates for acquisition fees and expenses, organization and offering costs, sales commissions, dealer manager fees, asset and management fees and reimbursement of operating costs. See Note 3 to our condensed consolidated financial statements included in this report for a discussion of the various related-party transactions, agreements and fees.

Subsequent Events

Sale of Shares of Common Stock

From July 1, 2005 through August 10, 2005, we have received subscriptions for approximately 10,800 shares of our common stock under the Offering. Because we have not yet met the minimum offering requirement set forth in the Registration Statement, no subscriptions have been accepted and no shares of common stock have been issued pursuant to the Offering.

Recent Accounting Pronouncements

SFAS No. 153, “Exchanges of Nonmonetary Assets,” is effective for the fiscal years beginning after June 15, 2005. This statement addresses financial accounting and reporting obligations associated with the exchange of nonmonetary assets. The statement eliminates the exception to the fair value for exchanges of similar productive assets issued in APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” and replaces it with a general exception for exchange transactions that do not have commercial substance, that is, transactions that are not expected to result in significant changes in the cash flows of the reporting entity. The adoption of this interpretation is not expected to have a significant impact on the financial position or results of operations of the Company.

SFAS No. 123R, “Share Based Payment,” is effective for the first fiscal year beginning after June 15, 2005. We will be required to adopt the new standard on January 1, 2006. This statement requires companies to expense the value of employee stock options and similar awards. We do not have an employee stock option plan. Accordingly, we do not believe that our adoption of SFAS 123R in 2006 will impact our consolidated financial position, results of operations or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have not commenced our planned principal operations. We plan to utilize financing to acquire ownership interests in real estate properties and will, therefore, be exposed to interest rate changes primarily as a result of its long-term debt used to acquire real estate properties.

Our objectives in managing interest rate risk will be to limit the impact of interest rate changes on operations and cash flows, and to lower overall borrowing costs. To achieve these objectives, we will borrow primarily at interest rates with the lowest margins available and, in some cases, with the ability to convert variable interest rates to fixed rates. In the future, we may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate our interest rate risk on a given financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.

We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

Item 4. Controls and Procedures

     During and subsequent to the reporting period, and under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that were in effect at the end of the period covered by this report. Based on their evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures that were in effect on June 30, 2005 were effective to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There have been no significant changes in our internal controls over financial reporting, or to our knowledge, in other factors that could significantly affect these controls subsequent to June 30, 2005.

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PART II
OTHER INFORMATION

Item 1. Legal Proceedings

No events occurred during the quarter covered by this report that would require a response to this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 27, 2005, our Registration Statement on Form S-11, covering a public offering (the “Offering”) of up to 45,000,000 shares of common stock to be offered at a price of $10 per share was declared effective under the Securities Act of 1933. The Registration Statement also covers up to 5,000,000 shares available pursuant to our distribution reinvestment plan.

We will not commence active operations until we receive and accept subscriptions for a minimum of 250,000 shares for gross offering proceeds of $2,500,000. After the initial 250,000 shares are sold, subscription proceeds will be held in escrow until investors are admitted as stockholders. We intend to admit new stockholders at least weekly. At that time, subscription proceeds may be released to us from escrow and utilized as consideration for investments and the payment or reimbursement of the dealer manager fee, selling commissions and other organization and offering expenses. Until required for such purposes, net offering proceeds will be held in short-term, liquid investments.

Until we satisfy the minimum offering requirement established for our Offering by accepting subscriptions for at least 250,000 shares of common stock, funds received for these subscriptions will continue to be escrowed. Amounts associated with these subscriptions will be reflected in restricted cash and subscriptions for common stock on our balance sheet.

Item 3. Defaults Upon Senior Securities

No events occurred during the quarter covered by this report that would require a response to this item.

Item 4. Submission of Matters to a Vote of Security Holders

No events occurred during the quarter covered by this report that would require a response to this item.

Item 5. Other Information

No events occurred during the quarter covered by this report that would require a response to this item.

Item 6. Exhibits

The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this quarterly report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Cole Credit Property Trust II, Inc.
(Registrant)
By:	/s/ Christopher H. Cole
	Christopher H. Cole
	Chief Executive Officer and President
By:	/s/ Blair D. Koblenz
	Blair D. Koblenz
	Executive Vice President and Chief Financial Officer

Date: August 12, 2005

14

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
1.1	Form of Dealer Manager Agreement
10.4	Form of Escrow Agreement between Cole Credit Property Trust, Inc. and Wells Fargo Bank, N.A.
31.1	Certification of the Chief Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

15

EX-1.1

                                                                     Exhibit 1.1

                       COLE CREDIT PROPERTY TRUST II, INC.

                     Up to 50,000,000 Shares of Common Stock

                        FORM OF DEALER MANAGER AGREEMENT

                                  June ___, 2005

Cole Capital Corporation
2555 East Camelback Road
Suite 400
Phoenix, Arizona 85016

Ladies and Gentlemen:

     Cole Credit Property Trust II, Inc., a Maryland corporation (the
"Company"), is registering for a public sale a maximum of 50,000,000 shares of
its common stock, $0.01 par value per share (the "Offering"), of which amount
45,000,000 shares are to be offered to the public for $10.00 per share
(collectively the "Shares" or the "Stock") and 5,000,000 shares are to be
offered pursuant to the Company's distribution reinvestment plan at the higher
of 91.5% of the estimated value per share as determined by the Company's Board
of Directors and $9.15 per share. There shall be a minimum purchase by any one
person of 250 Shares (except as otherwise indicated in the Prospectus or in any
letter or memorandum for the Company to Cole Capital Corporation (the "Dealer
Manager")). Terms not defined herein shall have the same meaning as in the
Prospectus. In connection therewith, the Company hereby agrees with you, the
Dealer Manager, as follows:

1.   Representations and Warranties of the Company

     The Company represents and warrants to the Dealer Manager that:

     1.1 A registration statement (File 333-121094) on Form S-11 with respect to
the Company has been prepared by the Company in accordance with applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "SEC") promulgated thereunder, covering
the Shares. Copies of such registration statement and each amendment thereto
have been or will be delivered to the Dealer Manager. (The registration
statement and prospectus contained therein, as finally amended at the effective
date of the registration statement, are respectively hereinafter referred to as
the "Registration Statement" and the "Prospectus," except that if the Company
files a Prospectus or a prospectus supplement pursuant to Rule 424(b) under the
Securities Act, or if the Company files a post-effective amendment to the
Registration Statement, the term "Prospectus" includes the prospectus filed
pursuant to Rule 424(b) or the prospectus included in such post-effective
amendment.)

     1.2 The Company has been duly and validly organized and formed as a
corporation under the laws of the state of Maryland, with the power and
authority to conduct its business as described in the Prospectus.


                                      -1-

     1.3 The Registration Statement and the Prospectus comply with the
Securities Act and the Rules and Regulations and do not contain any untrue
statements of material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided, however, that the foregoing provisions of this Section 1.3
will not extend to such statements contained in or omitted from the Registration
Statement or Prospectus as (i) are primarily within the knowledge of the Dealer
Manager or any of the Dealers and (ii) for statements contained in the
Registration Statement or Prospectus, are based upon information furnished by
the Dealer Manager in writing to the Company specifically for inclusion therein.

     1.4 The Company intends to use the funds received from the sale of the
Shares as set forth in the Prospectus.

     1.5 No consent, approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery by the
Company of this Agreement or the issuance and sale by the Company of the Shares,
except such as may be required under the Securities Act or applicable state
securities laws.

     1.6 There are no actions, suits or proceedings pending or to the knowledge
of the Company, threatened against the Company at law or in equity or before or
by any federal or state commission, regulatory body or administrative agency or
other governmental body, domestic or foreign, which will have a material adverse
effect on the business or property of the Company.

     1.7 The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Agreement
by the Company will not conflict with or constitute a default under any charter,
bylaw, indenture, mortgage, deed of trust, lease, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company, except to the extent
that the enforceability of the indemnity and/or contribution provisions
contained in Section 4 of this Agreement may be limited under applicable
securities laws.

     1.8 The Company has full legal right, power and authority to enter into
this Agreement and to perform the transactions contemplated hereby, except to
the extent that the enforceability of the indemnity and/or contribution
provisions contained in Section 4 of this Agreement may be limited under
applicable securities laws.

     1.9 At the time of the issuance of the Shares, the Shares will have been
duly authorized and validly issued, and upon payment therefor, will be fully
paid and nonassessable and will conform to the description thereof contained in
the Prospectus.

2.   Covenants of the Company

     The Company covenants and agrees with the Dealer Manager that:

     2.1 It will, at no expense to the Dealer Manager, furnish the Dealer
Manager with such number of printed copies of the Registration Statement,
including all supplements, amendments and exhibits thereto, as the Dealer
Manager may reasonably request. It will similarly furnish to the Dealer Manager
and others designated by the Dealer Manager as many copies as the Dealer Manager
may reasonably request in connection with the offering of the Shares of: (a) the
Prospectus in preliminary and final form and every form of supplemental or
amended prospectus; (b) this Agreement; and (c) any other printed sales
literature or other materials (provided that the use of said sales literature
and other materials has been first approved for use by the Company and all
appropriate regulatory agencies).


                                      -2-

     2.2 It will furnish such proper information and execute and file such
documents as may be necessary for the Company to qualify the Shares for offer
and sale under the securities laws of such jurisdictions as the Dealer Manager
may reasonably designate and will file and make in each year such statements and
reports as may be required. The Company will furnish to the Dealer Manager a
copy of such papers filed by the Company in connection with any such
qualification.

     2.3 It will: (a) use its best efforts to cause the Registration Statement
to become effective; (b) furnish copies of any proposed amendment or supplement
to the Registration Statement or Prospectus to the Dealer Manager; (c) file
every amendment or supplement to the Registration Statement or the Prospectus
that may be required by the SEC; and (d) use its best efforts to obtain the
lifting of any stop order suspending the effectiveness of the Registration
Statement that may be issued by the SEC at the earliest possible time. If at any
time when a Prospectus is required to be delivered under the Securities Act any
event occurs as a result of which, in the opinion of either the Company or the
Dealer Manager, the Prospectus or any other prospectus then in effect would
include an untrue statement of a material fact or, in view of the circumstances
under which they were made, omit to state any material fact necessary to make
the statements therein not misleading, the Company will promptly notify the
Dealer Manager thereof (unless the information shall have been received from the
Dealer Manager) and will effect the preparation of an amended or supplemental
prospectus which will correct such statement or omission. The Company will then
promptly prepare such amended or supplemental prospectus or prospectuses as may
be necessary to comply with the requirements of Section 10 of the Securities
Act.

3.   Obligations and Compensation of Dealer Manager

     3.1 The Company hereby appoints the Dealer Manager as its agent and
principal distributor for the purpose of selling for cash up to a maximum of
45,000,000 Shares through Dealers, all of whom shall be members of the National
Association of Securities Dealers, Inc. (NASD). The Dealer Manager may also sell
Shares for cash directly to its own clients and customers at the public offering
price and subject to the terms and conditions stated in the Prospectus. The
Dealer Manager hereby accepts such agency and distributorship and agrees to use
its best efforts to sell the Shares on said terms and conditions. The Dealer
Manager represents to the Company that (i) it is a member of the NASD; (ii) it
and its employees and representatives have all required licenses and
registrations to act under this Agreement; and (iii) it has established and
implemented anti-money laundering compliance programs in accordance with
applicable law, including applicable NASD rules, SEC rules, and the USA PATRIOT
Act of 2001, reasonably expected to detect and cause the reporting of suspicious
transactions in connection with the sale of Shares of the Company. The Dealer
Manager agrees to be bound by the terms of the Escrow Agreement executed as of
June 2, 2005 among Wells Fargo Bank, N.A., as escrow agent, the Dealer Manager
and the Company, a copy of which is enclosed (the "Escrow Agreement").

     3.2 Promptly after the effective date of the Registration Statement, the
Dealer Manager and the Dealers shall commence the offering of the Shares for
cash to the public in jurisdictions in which the Shares are registered or
qualified for sale or in which such offering is otherwise permitted. The Dealer
Manager and the Dealers will suspend or terminate offering of the Shares upon
request of the Company at any time and will resume offering the Shares upon
subsequent request of the Company.

     3.3 Except as provided in the "Plan of Distribution" section of the
Prospectus, as compensation for the services rendered by the Dealer Manager, the
Company agrees that it will pay to the Dealer Manager selling commissions in the
amount of 7.0% of the gross proceeds of the Shares sold plus a dealer manager
fee in the amount of 1.5% of the gross proceeds of the Shares sold; provided,
however, that there shall be no selling commissions and no dealer manager fees
paid for sales of Shares under the Company's distribution reinvestment plan.
Notwithstanding the foregoing, no commissions, payments or amount whatsoever
will be paid to the Dealer Manager under this Section 3.3 unless or until the
gross


                                      -3-

proceeds of the Shares sold are disbursed to the Company pursuant to paragraph 3
of the Escrow Agreement. Until the Required Capital or the Pennsylvania Required
Capital (as applicable and as defined in the Escrow Agreement) is obtained,
investments will be held in escrow and, if the Required Capital or the
Pennsylvania Required Capital (as applicable and as defined in the Escrow
Agreement) is not obtained, investments will be returned to the investors in
accordance with the Prospectus. The Company will not be liable or responsible to
any Dealer for direct payment of commissions to such Dealer, it being the sole
and exclusive responsibility of the Dealer Manager for payment of commissions to
Dealers. Notwithstanding the above, at its discretion, the Company may act as
agent of the Dealer Manager by making direct payment of commissions to such
Dealers without incurring any liability therefore.

     3.4 The Dealer Manager represents and warrants to the Company and each
person and firm that signs the Registration Statement that the information under
the caption "Plan of Distribution" in the Prospectus and all other information
furnished to the Company by the Dealer Manager in writing expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.

     3.5 The Dealer Manager shall use and distribute in conjunction with the
offer and sale of any Shares only the Prospectus and such sales literature and
advertising as shall have been previously approved in writing by the Company.

     3.6 The Dealer Manager and the Dealers shall cause Shares to be offered and
sold only in those jurisdictions specified in writing by the Company for whose
account Shares are then offered for sale, and such list of jurisdictions shall
be updated by the Company as additional states are added. The Company shall
specify only such jurisdictions in which the offering and sale of its Shares has
been authorized by appropriate state regulatory authorities. No Shares shall be
offered or sold for the account of the Company in any other states.

     3.7 The Dealer Manager represents and warrants to the Company that it will
not represent or imply that the escrow agent, as identified in the Prospectus,
has investigated the desirability or advisability of investment in the Company,
or has approved, endorsed or passed upon the merits of the Shares or the
Company, nor will it use the name of said escrow agent in any manner whatsoever
in connection with the offer or sale of the Shares other than by acknowledgment
that it has agreed to serve as escrow agent.

4.   Indemnification

     4.1 The Company will indemnify and hold harmless the Dealers and the Dealer
Manager, their officers and directors and each person, if any, who controls such
Dealer or Dealer Manager within the meaning of Section 15 of the Securities Act
from and against any losses, claims, damages or liabilities ("Losses"), joint or
several, to which such Dealers or Dealer Manager, their officers and directors,
or such controlling person may become subject, under the Securities Act or
otherwise, insofar as such Losses (or actions in respect thereof) arise out of
or are based upon (a) any untrue statement or alleged untrue statement of a
material fact contained (i) in any Registration Statement (including the
Prospectus as a part thereof) or any post-effective amendment thereto or in the
Prospectus or any amendment or supplement to the Prospectus or (ii) in any blue
sky application or other document executed by the Company or on its behalf
specifically for the purpose of qualifying any or all of the Shares for sale
under the securities laws of any jurisdiction or based upon written information
furnished by the Company under the securities laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (b) the omission or alleged omission to state in the
Registration Statement (including the


                                      -4-

Prospectus as a part thereof) or any post-effective amendment thereof or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, if used prior to the effective date of the Registration Statement,
or in the Prospectus or any amendment or supplement to the Prospectus of the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, and will reimburse
each Dealer or Dealer Manager, its officers and each such controlling person for
any legal or other expenses reasonably incurred by such Dealer or Dealer
Manager, its officers and directors, or such controlling person in connection
with investigating or defending such loss, claim, damage, liability or action;
provided that the Company will not be liable in any such case to the extent that
any such Loss arises out of, or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company or Dealer Manager
by or on behalf of any Dealer or Dealer Manager specifically for use with
reference to such Dealer or Dealer Manager in the preparation of the
Registration Statement or any such post-effective amendment thereof, any such
Blue Sky Application or any such preliminary prospectus or the Prospectus or any
such amendment thereof or supplement thereto; and further provided that the
Company will not be liable in any such case if it is determined that such Dealer
or Dealer Manager was at fault in connection with the Loss. Notwithstanding the
foregoing, the Company may not indemnify or hold harmless the Dealer Manager,
any Dealer or any of their affiliates in any manner that would be inconsistent
with the provisions of Section II.G. of the Statement of Policy Regarding Real
Estate Investment Trusts of the North American Securities Administrators
Association, Inc. effective September 29, 1993, as amended (the "NASAA
Guidelines"). In particular, but without limitation, the Company may not
indemnify or hold harmless the Dealer Manager, any Dealer or any of their
affiliates for liabilities arising from or out of a violation of state or
federal securities laws, unless one or more of the following conditions are met:

     (a)  there has been a successful adjudication on the merits of each count
          involving alleged securities law violations;

     (b)  such claims have been dismissed with prejudice on the merits by a
          court of competent jurisdiction; or

     (c)  a court of competent jurisdiction approves a settlement of the claims
          against the indemnitee and finds that indemnification of the
          settlement and the related costs should be made, and the court
          considering the request for indemnification has been advised of the
          position of the SEC and of the published position of any state
          securities regulatory authority in which the securities were offered
          as to indemnification for violations of securities laws.

     4.2 The Dealer Manager will indemnify and hold harmless the Company and
each person or firm which has signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act, from and against any Losses to which any of the aforesaid
parties may become subject, under the Securities Act or otherwise, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement of a material fact contained (i) in the Registration
Statement (including the Prospectus as a part thereof) or any post-effective
amendment thereof or (ii) any Blue Sky Application, or (b) the omission to state
in the Registration Statement (including the Prospectus as a part thereof) or
any post-effective amendment thereof or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (c) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, if used prior to the
effective date of the Registration Statement, or in the Prospectus, or in any
amendment or supplement to the Prospectus or the


                                      -5-

omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading in each case to the
extent, but only to the extent, that such untrue statement or omission was made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Dealer Manager specifically for use with
reference to the Dealer Manager in the preparation of the Registration Statement
or any such post-effective amendments hereof or any such Blue Sky Application or
any such preliminary prospectus or the Prospectus or any such amendment thereof
or supplement thereto, or (d) any unauthorized use of sales materials or use of
unauthorized verbal representations concerning the Shares by the Dealer Manager,
or (e) any failure to comply with applicable laws governing money laundry
abatement and anti-terrorist financing efforts, including applicable NASD rules,
SEC rules and the USA PATRIOT Act of 2001, and will reimburse the aforesaid
parties, in connection with investigation or defending such Loss or action. This
indemnity agreement will be in addition to any liability which the Dealer
Manager may otherwise have.

     4.3 Each Dealer severally will indemnify and hold harmless the Company,
Dealer Manager and each of their directors (including any person named in the
Registration Statement with his consent as about to become a director), each of
their officers who has signed the Registration Statement and each person, if
any, who controls the Company and the Dealer Manager within the meaning of
Section 15 of the Securities Act from and against any Losses to which the
Company, the Dealer Manager, any such director or officer, or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
Losses or liabilities (or actions in respect thereof) arise out of or are based
upon (a) any untrue statement or alleged untrue statement of a material fact
contained (i) in the Registration Statement (including the Prospectus as a part
thereof) or any post-effective amendment thereof or (ii) in any Blue Sky
Application, or (b) the omission or alleged omission to state in the
Registration Statement (including the Prospectus as a part thereof) or any
post-effective amendment thereof or in any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (c) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, if used prior to the
effective date of the Registration Statement, or in the Prospectus, or in any
amendment or supplement to the Prospectus or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or the Dealer Manager by or on behalf of
such Dealer specifically for use with reference to such Dealer in the
preparation of the Registration Statement or any such post-effective amendments
thereof or any such Blue Sky Application or any such preliminary prospectus or
the Prospectus or any such amendment thereof or supplement thereto, or (d) any
unauthorized use of sales materials or use of unauthorized verbal
representations concerning the Shares by such Dealer or Dealer's representatives
or agents in violation of Section VII of the Selected Dealer Agreement or
otherwise, or (e) any failure to comply with applicable laws governing money
laundry abatement and anti-terrorist financing efforts, including applicable
NASD rules, SEC rules and the USA PATRIOT Act of 2001, and will reimburse the
Company and the Dealer Manager and any such directors or officers, or
controlling person, in connection with investigating or defending any such Loss
or action. This indemnity agreement will be in addition to any liability which
such Dealer may otherwise have.

     4.4 Promptly after receipt by an indemnified party under this Section 4 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 4, notify in writing the indemnifying party of the commencement thereof
and the omission so to notify the indemnifying party will relieve such
indemnifying party from any liability under this Section 4 as to the particular
item for which indemnification is then being sought, but not from any other
liability which it may have to any


                                      -6-

indemnified party. In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to participate in the defense
thereof, with separate counsel. Such participation shall not relieve such
indemnifying party of the obligation to reimburse the indemnified party for
reasonable legal and other expenses (subject to Section 4.5) incurred by such
indemnified party in defending itself, except for such expenses incurred after
the indemnifying party has deposited funds sufficient to effect the settlement,
with prejudice, of the claim in respect of which indemnity is sought. Any such
indemnifying party shall not be liable to any such indemnified party on account
of any settlement of any claim or action effected without the consent of such
indemnifying party.

     4.5 The indemnifying party shall pay all legal fees and expenses of the
indemnified party in the defense of such claims or actions; provided, however,
that the indemnifying party shall not be obligated to pay legal expenses and
fees to more than one law firm in connection with the defense of similar claims
arising out of the same alleged acts or omissions giving rise to such claims
notwithstanding that such actions or claims are alleged or brought by one or
more parties against more than one indemnified party. If such claims or actions
are alleged or brought against more than one indemnified party, then the
indemnifying party shall only be obliged to reimburse the expenses and fees of
the one law firm that has been selected by a majority of the indemnified parties
against which such action is finally brought; and in the event a majority of
such indemnified parties is unable to agree on which law firm for which expenses
or fees will be reimbursable by the indemnifying party, then payment shall be
made to the first law firm of record representing an indemnified party against
the action or claim. Such law firm shall be paid only to the extent of services
performed by such law firm and no reimbursement shall be payable to such law
firm on account of legal services performed by another law firm.

     4.6 If the indemnity agreements contained in this Section 4 are for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any Losses or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such Losses and expenses
incurred by such indemnified party, as incurred, (a) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Dealer Manager or Dealer on the other hand from the offering of the
Shares in question or (b) if the allocation provided by clause (a) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) but also the relative fault
of the Company on the one hand and of the Dealer Manager or Dealer on the other
hand in connection with the statements or omissions which resulted in such
Losses or expenses, as well as any other relevant equitable considerations.

     The relative benefits received by the Company on the one hand and the
Dealer Manager or Dealer on the other hand in connection with the Offering shall
be deemed to be in the same respective proportions as the total net proceeds
from the Offering (before deducting expenses) received by the Company and the
total selling commission and any dealer manager fee actually received by the
Dealer Manager or Dealer, in each case as set forth on the cover of the
Prospectus, bear to the aggregate public offering price of the Shares as set
forth on such cover. The relative fault of the Company on the one hand and the
Dealer Manager or Dealer on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Dealer Manager or Dealer and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. It is understood that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of Losses and expenses incurred by an
indemnified party and referred to above in this Section 4 shall be deemed to
include any legal or other expenses reasonably incurred by such


                                      -7-

indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 4, the Dealer Manager or
Dealer shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares sold by it exceeds the amount of any
damages that such Dealer Manager or Dealer has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.

     No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

     For purposes of this Section 4, each director of the Company, each other
person who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company, and each person, if
any, who controls the Dealer Manager or any Dealer within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as such
Dealer Manager or Dealer.

5.   Survival of Provisions

     The respective agreements, representations and warranties of the Company
and the Dealer Manager set forth in this Agreement shall remain operative and in
full force and effect regardless of (a) any investigation made by or on behalf
of the Dealer Manager or any Dealer or any person controlling the Dealer Manager
or any Dealer or by or on behalf of the Company or any person controlling the
Company, and (b) the acceptance of any payment for the Shares.

6.   Applicable Law; Venue

     This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the laws of, the State of
Arizona; provided however, that causes of action for violations of federal or
state securities laws shall not be governed by this Section. Venue for any
action brought hereunder shall lie exclusively in Phoenix, Arizona.

7.   Counterparts

     This Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same Agreement.

8.   Successors and Amendment

     8.1 This Agreement shall inure to the benefit of and be binding upon the
Dealer Manager and the Company and their respective successors. Nothing in this
Agreement is intended or shall be construed to give to any other person any
right, remedy or claim, except as otherwise specifically provided herein. This
Agreement shall inure to the benefit of the Dealers to the extent set forth in
Sections 1 and 4 hereof.

     8.2 This Agreement may be amended by the written agreement of the Dealer
Manager and the Company.


                                      -8-

9.   Term

     This Agreement may be terminated by either party (i) immediately upon
notice to the other party in the event that the other party shall have
materially failed to comply with any of the material provisions of this
Agreement on its part to be performed during the term of this Agreement or if
any of the representations, warranties, covenants or agreements of such party
contained herein shall not have been materially complied with or satisfied
within the times specified or (ii) by either party on 60 days' written notice.

     In any case, this Agreement shall expire at the close of business on the
effective date that the Offering is terminated. The provisions of Section 4
hereof shall survive such termination. In addition, the Dealer Manager, upon the
expiration or termination of this Agreement, shall (i) promptly deposit any and
all funds in its possession which were received from investors for the sale of
Shares into the appropriate escrow account or, if the minimum number of Shares
have been sold and accepted by the Company, into such other account as the
Company may designate; and (ii) promptly deliver to the Company all records and
documents in its possession which relate to the Offering and are not designated
as dealer copies. The Dealer Manager, at its sole expense, may make and retain
copies of all such records and documents, but shall keep all such information
confidential. The Dealer Manager shall use its best efforts to cooperate with
the Company to accomplish an orderly transfer of management of the Offering to a
party designated by the Company. Upon expiration or termination of this
Agreement, the Company shall pay to the Dealer Manager all commissions to which
the Dealer Manager is or becomes entitled under Section 3 at such time as such
commissions become payable. In such event, participating broker-dealers shall
only be entitled to actual earned commissions to date.

10.  Confirmation

     The Company hereby agrees and assumes the duty to confirm on its behalf and
on behalf of dealers or brokers who sell the Shares all orders for purchase of
Shares accepted by the Company. Such confirmations will comply with applicable
rules of the SEC and the NASD, and will comply with applicable laws of such
other jurisdictions to the extent the Company is advised of such laws in writing
by the Dealer Manager.

11.  Suitability of Investors

     The Dealer Manager will offer Shares, and in its agreements with Dealers
will require that the Dealers offer Shares, only to persons who meet the
financial qualifications set forth in the Prospectus or in any suitability
letter or memorandum sent to it by the Company and will only make offers to
persons in the states in which it is advised in writing that the Shares are
qualified for sale or that such qualification is not required. In offering
Shares, the Dealer Manager will, and in its agreements with Dealers, the Dealer
Manager will require that the Dealers will, comply with the provisions of all
applicable rules and regulations relating to suitability of investors, including
without limitation, the provisions of Article III.C. of the NASAA Guidelines. In
making the determinations as to suitability required by the NASAA Guidelines,
the Dealer Manager may rely on representations from (i) investment advisers who
are not affiliated with a Dealer or (ii) banks acting as trustees or
fiduciaries. With respect to the maintenance of records required by the NASAA
Guidelines, the Company agrees that the Dealer Manager can satisfy its
obligations by contractually requiring such information to be maintained by the
investment advisers or banks discussed in the preceding sentence.


                                      -9-

12.  Submission of Subscriptions

     12.1 Those persons who purchase Shares will be instructed by the Dealer
Manager or the Dealer to make their checks payable to "Wells Fargo Bank, N.A./
Cole Credit Property Trust II, Inc." The Dealer Manager and any Dealer receiving
a check not conforming to the foregoing instructions shall return such check
directly to such subscriber not later than the end of the next business day
following its receipt. Checks received by the Dealer Manager or Dealer which
conform to the foregoing instructions shall be transmitted for deposit pursuant
to one of the methods described in this Section 12 and in accordance with the
requirements set forth in Rule 15c2-4 promulgated under the Securities Exchange
Act of 1934, as amended. Transmittal of received investor funds will be made in
accordance with the following procedures. The Dealer Manager may authorize
certain Dealers which are "$250,000 broker-dealers" to instruct their customers
to make their checks for Shares subscribed for payable directly to the Dealer.
In such case, the Dealer will collect the proceeds of the subscribers' checks
and issue a check for the aggregate amount of the subscription proceeds made
payable to the order of the escrow agent.

     12.2 If a Dealer conducts its internal supervisory procedures at the
location where subscription documents and checks are initially received, the
Dealer shall, by noon of the business day following receipt by the Dealer of the
subscription documents and the check, forward (i) the subscription documents to
the Dealer Manager and (ii) the checks to the escrow agent.

     12.3 If a Dealer's internal supervisory procedures are to be performed at a
different location (the "Final Review Office"), the subscription documents and
check must be transmitted to the Final Review Office by noon of the next
business day following receipt of the subscription documents and check-by the
Dealer. The Final Review Office will, by the end of the second business day
following receipt by the Dealer of the subscription documents and check, forward
(i) the subscription documents to the Dealer Manager and (ii) the checks to the
escrow agent.

13.  Selected Investment Advisor Agreement

     With respect to any provision of information concerning the Offering by a
selected investment advisor (the "Investment Advisor") presently registered
under the Investment Advisers Act of 1940, as amended, and presently and
appropriately registered in each state in which the Investment Advisor has
clients, the Company and the Investment Advisor shall enter into a Selected
Investment Advisor Agreement in substantially the form attached hereto as
Exhibit B.

14.  Notices

     Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be deemed
to be delivered when delivered in person or deposited in the United States mail,
properly addressed and stamped with the required postage, registered or
certified mail, return receipt requested, to the intended recipient as set forth
below:

          If to the Company;        Cole Credit Property Trust II, Inc.
                                    2555 East Camelback Road, Suite 400
                                    Phoenix, Arizona 85016
                                    Attention: President

          If to the Dealer Manager: Cole Capital Corporation
                                    2555 East Camelback Road, Suite 400
                                    Phoenix, Arizona 85016
                                    Attention: President


                                      -10-

     Any party may change its address specified above by giving the other party
notice of such change in accordance with this Section 14.

     If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us
as of the date first above written.

                                        Very truly yours,

                                        COLE CREDIT PROPERTY TRUST II, INC.


                                        By:
                                            ------------------------------------
                                            Christopher H. Cole, President

Accepted and agreed as of the date first above written.

COLE CAPITAL CORPORATION


By:
    ---------------------------------
    Blair D. Koblenz, President


                                      -11-

                                    EXHIBIT A

                       COLE CREDIT PROPERTY TRUST II, INC.

                     Up to 45,000,000 Shares of Common Stock

                            SELECTED DEALER AGREEMENT

Ladies and Gentlemen:

     Cole Capital Corporation, as the dealer manager ("Dealer Manager") for Cole
Credit Property Trust II, Inc. (the "Company"), a Maryland corporation, invites
you (the "Dealer") to participate in the distribution of shares of common stock
("Shares") of the Company subject to the following terms:

     I. Dealer Manager Agreement

     The Dealer Manager has entered into an agreement with the Company called
the Dealer Manager Agreement dated June ___, 2005, in the form attached hereto
as Exhibit A (the "Dealer Manager Agreement"). The terms of the Dealer Manager
Agreement relating to the Dealer are incorporated herein by reference as if set
forth verbatim and capitalized terms not otherwise defined herein shall have the
meanings given them in the Dealer Manager Agreement. By your acceptance of this
Agreement, you will become one of the Dealers referred to in the Dealer Manager
Agreement and will be entitled and subject to the indemnification provisions
contained in the Dealer Manager Agreement, including the provisions of the
Dealer Manager Agreement wherein the Dealers severally agree to indemnify and
hold harmless the Company, the Dealer Manager and each officer and director
thereof, and each person, if any, who controls the Company and the Dealer
Manager within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Except as otherwise specifically stated herein, all terms
used in this Agreement have the meanings provided in the Dealer Manager
Agreement. The Shares are offered solely through broker-dealers who are members
of the National Association of Securities Dealers, Inc. ("NASD").

     Dealer hereby agrees to use its best efforts to sell the Shares for cash on
the terms and conditions stated in the Prospectus. Nothing in this Agreement
shall be deemed or construed to make Dealer an employee, agent, representative
or partner of the Dealer Manager or of the Company, and Dealer is not authorized
to act for the Dealer Manager or the Company or to make any representations on
their behalf except as set forth in the Prospectus and such other printed
information furnished to Dealer by the Dealer Manager or the Company to
supplement the Prospectus ("supplemental information").

     II. Submission of Orders

     Those persons who purchase Shares will be instructed by the Dealer to make
their checks payable to "Wells Fargo Bank, N.A./ Cole Credit Property Trust II,
Inc." Any Dealer receiving a check not conforming to the foregoing instructions
shall return such check directly to such subscriber not later than the end of
the next business day following its receipt. Checks received by the Dealer which
conform to the foregoing instructions shall be transmitted for deposit pursuant
to one of the methods in this Article II. The Dealer Manager may authorize
Dealer if Dealer is a "$250,000 broker-dealer" to instruct its customers to make
its checks for Shares subscribed for payable directly to the Dealer, in which
case the Dealer will collect the proceeds of the subscriber's checks and issue a
check made payable to the order of the escrow agent for the aggregate amount of
the subscription proceeds. Transmittal of received investor funds will be made
in accordance with the following procedures:


                                      -1-

     (a)  If the Dealer conducts its internal supervisory procedures at the
          location where subscription documents and checks are initially
          received, the Dealer shall forward (i) the subscription documents to
          the Dealer Manager and (ii) the checks to the escrow agent by the end
          of the next business day following receipt of the subscription
          documents and the check.

     (b)  If the internal supervisory procedures are to be performed at a
          different location (the "Final Review Office"), the subscription
          documents and check must be transmitted to the Final Review Office by
          the end of the next business day following receipt by the Dealer of
          the subscription documents and check. The Final Review Office will, by
          the end of the next business day following receipt by the Final Review
          Office of the subscription documents and check, forward both the
          subscription documents and check to the Dealer Manager as processing
          broker-dealer in order that the Dealer Manager may complete its review
          of the documentation and process the subscription documents and check.

     If requested by the Company or the Dealer Manager, the Dealer shall obtain
from subscribers for the Shares, other documentation reasonably deemed by the
Company or the Dealer Manager to be required under applicable law or as may be
necessary to reflect the policies of the Company or the Dealer Manager. Such
documentation may include, without limitation, subscribers' written
acknowledgement and agreement to the privacy policies of the Company or the
Dealer Manager.

     III. Pricing

     Except for discounts described in or as otherwise provided in the "Plan of
Distribution" section of the Prospectus, 45,000,000 Shares shall be offered to
the public at the offering price of $10.00 per Share, payable in cash pursuant
to the primary offering and Shares shall be offered pursuant to the Company's
distribution reinvestment plan at the higher of 91.5% of the fair market value,
as determined by our board of directors or $9.15 per Share. Except as otherwise
indicated in the Prospectus or in any letter or memorandum sent to the Dealer by
the Company or Dealer Manager, a minimum initial purchase of 250 Shares is
required. Except as otherwise indicated in the Prospectus, additional
investments may be made in cash in minimal increments of at least 25 Shares. The
Shares are nonassessable. The Dealer hereby agrees to place any order for the
full purchase price.

     IV. Dealers' Commissions

     Except for discounts described in or as otherwise provided in the "Plan of
Distribution" section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Shares sold by Dealer which it
is authorized to sell hereunder is 7.0% of the gross proceeds of Shares sold by
it and accepted and confirmed by the Company (no selling commissions for Shares
sold pursuant to the Company's distribution reinvestment plan), which commission
will be paid by the Dealer Manager. For these purposes, a "sale of Shares" shall
occur if and only if a transaction has closed with a securities purchaser
pursuant to all applicable offering and subscription documents and the Company
has thereafter distributed the commission to the Dealer Manager in connection
with such transaction. The Dealer hereby waives any and all rights to receive
payment of commissions due until such time as the Dealer Manager is in receipt
of the commission from the Company. The Dealer affirms that the Dealer Manager's
liability for commissions payable is limited solely to the proceeds of
commissions receivable associated therewith. In addition, as set forth in the
Prospectus, the Dealer Manager may, in its sole discretion, reallow out of its
dealer manager fee a marketing fee and due diligence expense reimbursement a
portion the dealer manager fee, based on such factors as the number of Shares
sold by such participating Dealer, the assistance of such participating Dealer
in marketing the offering of Shares, and bona fide conference fees incurred.


                                      -2-

     Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer unless or until the gross proceeds of the
Shares sold are disbursed to the Company pursuant to paragraph 3(a) of the
Escrow Agreement. Until the Required Capital or the Pennsylvania Required
Capital, as applicable and as defined in the Escrow Agreement, is obtained,
investments will be held in escrow and, if the Required Capital or the
Pennsylvania Required Capital, as applicable, is not obtained, investments will
be returned to the investors in accordance with the Prospectus.

     The parties hereby agree that the foregoing commission is not in excess of
the usual and customary distributors' or sellers' commission received in the
sale of securities similar to the Shares, that Dealer's interest in the offering
is limited to such commission from the Dealer Manager and Dealer's indemnity
referred to in Section 4 of the Dealer Manager Agreement, that the Company is
not liable or responsible for the direct payment of such commission to the
Dealer.

     V. Payment

     Payments of selling commissions will be made by the Dealer Manager (or by
the Company as provided in the Dealer Manager Agreement) to Dealer within 30
days of the receipt by the Dealer Manager of the gross commission payments from
the Company. Dealer acknowledges that if the Company pays selling commissions to
the Dealer Manager, the Company is relieved of any obligation for selling
commissions to the Dealer. The Company may rely on and use the preceding
acknowledgement as a defense against any claim by Dealer for selling commissions
Company pays to Dealer Manager but that Dealer Manager fails to remit to Dealer.

     VI. Right to Reject Orders or Cancel Sales

     All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the Company, which reserves the
right to reject any order for any or no reason. Orders not accompanied by a
Subscription Agreement/Signature Page and the required check in payment for the
Shares may be rejected. Issuance and delivery of the Shares will be made only
after actual receipt of payment therefor. If any check is not paid upon
presentment, or if the Company is not in actual receipt of clearinghouse funds
or cash, certified or cashier's check or the equivalent in payment for the
Shares within 15 days of sale, the Company reserves the right to cancel the sale
without notice. In the event an order is rejected, canceled or rescinded for any
reason, the Dealer agrees to return to the Dealer Manager any commission
theretofore paid with respect to such order.

     VII. Prospectus and Supplemental Information

     Dealer is not authorized or permitted to give and will not give, any
information or make any representation concerning the Shares except as set forth
in the Prospectus and supplemental information. The Dealer Manager will supply
Dealer with reasonable quantities of the Prospectus, any amendments or
supplements thereto, as well as any supplemental information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus and all supplements
thereto and any amended Prospectus to each investor to whom an offer is made
prior to or simultaneously with the first solicitation of an offer to sell the
Shares to an investor. The Dealer agrees that it will not send or give any
supplemental information to an investor unless it has previously sent or given a
Prospectus to that investor or has simultaneously sent or given a Prospectus
with such supplemental information. Dealer agrees that it will not show or give
to any investor or prospective investor or reproduce any material or writing
which is supplied to it by the Dealer Manager and marked "dealer only" or
otherwise bearing a legend denoting that it is not to be used in connection with
the sale of Shares to any prospective investor or members of the public. Dealer
agrees that it will not use in connection with the offer or sale of Shares any
material or writing which relates to another company supplied to it by the
Company or the Dealer Manager bearing a legend which states that


                                      -3-

such material may not be used in connection with the offer or sale of any
securities other than the company to which it relates. Dealer further agrees
that it will not use in connection with the offer or sale of Shares any
materials or writings which have not been previously approved by the Dealer
Manager. Each Dealer agrees, if the Dealer Manager so requests, to furnish a
copy of any revised preliminary Prospectus to each person to whom it has
furnished a copy of any previous preliminary Prospectus, and further agrees that
it will itself mail or otherwise deliver all preliminary and final Prospectuses
required for compliance with the provisions of Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Regardless of the
termination of this Agreement, Dealer will deliver a Prospectus in transactions
in the Shares for a period of 90 days from the effective date of the
Registration Statement or such longer period as may be required by the Exchange
Act or the rules and regulations thereunder. On becoming a Dealer, and in
offering and selling Shares, Dealer agrees to comply with all the applicable
requirements under the Securities Act and the Exchange Act. Notwithstanding the
termination of this Agreement or the payment of any amount to Dealer, Dealer
agrees to pay Dealer's proportionate share of any claim, demand or liability
asserted against Dealer and the other Dealers on the basis that Dealers or any
of them constitute an association, unincorporated business or other separate
entity, including in each case Dealer's proportionate share of any expenses
incurred in defending against any such claim, demand or liability.

     VIII. License and Association Membership

     Dealer's acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Dealer is a properly registered or licensed
broker-dealer, duly authorized to sell Shares under Federal and state securities
laws and regulations and in all states where it offers or sells Shares, and that
it is a member in good standing of the NASD. This Agreement shall automatically
terminate if the Dealer ceases to be a member in good standing of such
association, or in the case of a foreign dealer, so to conform. Dealer agrees to
notify the Dealer Manager immediately if Dealer ceases to be a member in good
standing, or in the case of a foreign dealer, so to conform. The Dealer Manager
also hereby agrees to comply with the Conduct Rules of the NASD, including but
not limited to Rules 2730, 2740, 2420 and 2750.

     IX. Anti-Money Laundering Compliance Programs

     Dealer represents to the Company and the Dealer Manager that Dealer has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Shares of
the Company.

     X. Limitation of Offer

     Dealer will offer Shares only to persons who meet the qualifications set
forth in the Prospectus or in any suitability letter or memorandum sent to it by
the Company or the Dealer Manager and will only make offers to persons in the
states in which it is advised in writing that the Shares are qualified for sale
or that such qualification is not required. In offering Shares, Dealer will
comply with the provisions of the NASD Conduct Rules set forth in the NASD
Manual, as well as all other applicable rules and regulations relating to
suitability of investors, including without limitation, the provisions of
Article III.C. of the Statement of Policy Regarding Real Estate Investment
Trusts of the North American Securities Administrators Association, Inc.

     XI. Termination


                                      -4-

     Dealer will suspend or terminate its offer and sale of Shares upon the
request of the Company or the Dealer Manager at any time and will resume its
offer and sale of Shares hereunder upon subsequent request of the Company or the
Dealer Manager. Any party may terminate this Agreement by written notice. Such
termination shall be effective 48 hours after the mailing of such notice. This
Agreement is the entire agreement of the parties and supersedes all prior
agreements, if any, between the parties hereto.

     This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer, and any such amendment shall be deemed accepted by Dealer
upon placing an order for sale of Shares after he has received such notice.

     XII. Privacy Laws

     The Dealer Manager and Dealer (each referred to individually in this
section as "party") agree as follows:

     (a)  Each party agrees to abide by and comply with (i) the privacy
          standards and requirements of the Gramm-Leach-Bliley Act of 1999 ("GLB
          Act"), (ii) the privacy standards and requirements of any other
          applicable Federal or state law, and (iii) its own internal privacy
          policies and procedures, each as may be amended from time to time.

     (b)  Each party agrees to refrain from the use or disclosure of nonpublic
          personal information (as defined under the GLB Act) of all customers
          who have opted out of such disclosures except as necessary to service
          the customers or as otherwise necessary or required by applicable law;
          and

     (c)  Each party shall be responsible for determining which customers have
          opted out of the disclosure of nonpublic personal information by
          periodically reviewing and, if necessary, retrieving a list of such
          customers (the "List") as provided by each to identify customers that
          have exercised their opt-out rights. In the event either party uses or
          discloses nonpublic personal information of any customer for purposes
          other than servicing the customer, or as otherwise required by
          applicable law, that party will consult the List to determine whether
          the affected customer has exercised his or her opt-out rights. Each
          party understands that each is prohibited from using or disclosing any
          nonpublic personal information of any customer that is identified on
          the List as having opted out of such disclosures.

     XIII. Notice

     All notices will be in writing and will be duly given to the Dealer Manager
when mailed to 2555 Camelback Road, Suite 400, Phoenix, Arizona 85016, and to
Dealer when mailed to the address specified by Dealer herein.

     XIV. Attorneys' Fees, Applicable Law and Venue

     In any action to enforce the provisions of this Agreement or to secure
damages for its breach, the prevailing party shall recover its costs and
reasonable attorney's fees. This Agreement shall be construed under the laws of
the State of Arizona and shall take effect when signed by Dealer and
countersigned by the Dealer Manager. Venue for any action (including
arbitration) brought hereunder shall lie exclusively in Phoenix, Arizona.


                                      -5-

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on its behalf by its duly authorized agent.

                                        THE DEALER MANAGER:

                                        COLE CAPITAL CORPORATION


                                        By:
                                            ------------------------------------
                                            Blair D. Koblenz, President


                                      -6-

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth. We hereby represent that the list below of
jurisdictions in which we are registered or licensed as a broker or dealer and
are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.

1. Identity of Dealer:

Name: __________________________________________________________________________

Type of entity: ________________________________________________________________
                (corporation, partnership, proprietorship, etc.)

Organized in the State of: _____________________________________________________

Licensed as broker-dealer in the following States: _____________________________

________________________________________________________________________________

Tax I.D. #: ____________________________________________________________________

2. Person to receive notice pursuant to Section XIII:

Name: __________________________________________________________________________

Company: _______________________________________________________________________

Address: _______________________________________________________________________

City, State and Zip Code: ______________________________________________________

Telephone No.: _________________________________________________________________

Facsimile No.: _________________________________________________________________

Email Address: _________________________________________________________________

AGREED TO AND ACCEPTED BY THE DEALER:


- -------------------------------------
(Dealer's Firm Name)


By:
    ---------------------------------
                Signature
Name:
      -------------------------------
Title:
       ------------------------------


                                      -7-

                                    EXHIBIT B

                      SELECTED INVESTMENT ADVISOR AGREEMENT

                       COLE CREDIT PROPERTY TRUST II, INC.

     THIS SELECTED INVESTMENT ADVISOR AGREEMENT (the "Agreement") is made and
entered into as of the day indicated on Exhibit A attached hereto and by this
reference incorporated herein, between Cole Credit Property Trust II, Inc., a
Maryland corporation (the "Company"), and the selected investment advisor (the
"Investment Advisor") identified in Exhibit A hereto.

     WHEREAS, the Company is offering up to 50,000,000 shares of its common
stock (the "Shares") to the general public, pursuant to a public offering (the
"Offering") of the Shares pursuant to a prospectus (the "Prospectus") filed with
the Securities and Exchange Commission (the "SEC"), 5,000,000 of which Shares
are being offered pursuant to the Company's distribution reinvestment plan (the
"DRIP"); and

     WHEREAS, the Investment Advisor is an entity, as designated in Exhibit A
hereto, organized and presently in good standing in the state or states
designated in Exhibit A hereto, presently registered as an investment advisor
under the Investment Advisers Act of 1940, as amended, and presently registered
or licensed as an investment advisor by the appropriate regulatory agency of
each state in which the Investment Advisor has clients, or exempt from such
registration requirements; and

     WHEREAS, the Company has a currently effective registration statement on
Form S-11, including a final prospectus, for the registration of the Shares
under the Securities Act of 1933, as amended (such registration statement, as it
may be amended, and the prospectus and exhibits on file with the SEC, as well as
any post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the "Registration Statement" and the "Prospectus"); and

     WHEREAS, the offer and sale of the Shares shall be made pursuant to the
terms and conditions of the Registration Statement and the Prospectus and,
further, pursuant to the terms and conditions of all applicable federal
securities laws and the applicable securities laws of all states in which the
Shares are offered and sold; and

     WHEREAS, the Company desires to give the clients of the Investment Advisor
the opportunity to purchase the Shares, and the Investment Advisor is willing
and desires to provide its clients with information concerning the Shares and
the procedures for subscribing for the Shares upon the following terms and
conditions;

     NOW, THEREFORE, in consideration of the premises and terms and conditions
thereof, it is agreed between the Company and the Investment Advisor as follows.

1.   Purchase of Shares

     (a)  Subject to the terms and conditions herein set forth, the Company
          hereby makes available for purchase by the clients of the Investment
          Advisor a portion of the Shares described in the Registration
          Statement. The Investment Advisor hereby covenants, warrants and
          agrees that, in regard to any purchase of the Shares by its clients,
          it will comply with all of the terms and conditions of the
          Registration Statement and the Prospectus, all applicable state and
          federal laws, including the Securities Act of 1933, as amended (the


                                      -1-

          "Securities Act"), the Investment Advisers Act of 1940, as amended,
          and any and all regulations and rules pertaining thereto, heretofore
          or hereafter issued by the Securities and Exchange Commission ("SEC").
          Neither the Investment Advisor nor any other person shall have any
          authority to give any information or make any representations in
          connection with the Shares other than as contained in the Registration
          Statement and the Prospectus, as amended and supplemented, and as is
          otherwise expressly authorized in writing by the Company.

     (b)  Clients of the Investment Advisor may, following receipt of written
          notice by the Investment Advisor from the Company of the effective
          date of the Registration Statement, purchase the Shares according to
          all such terms as are contained in the Registration Statement and the
          Prospectus. The Investment Advisor shall comply with all requirements
          set forth in the Registration Statement and the Prospectus. The
          Investment Advisor shall use and distribute, in connection with the
          Shares, only the Prospectus and, if necessary, any separate prospectus
          relating solely to the DRIP, and such sales literature and advertising
          materials that shall conform in all respects to any restrictions of
          local law and the applicable requirements of the Securities Act of
          1933, as amended, and that have been approved in writing by the
          Company. The Company reserves the right to establish such additional
          procedures as it may deem necessary to ensure compliance with the
          requirements of the Registration Statement, and the Investment Advisor
          shall comply with all such additional procedures to the extent that it
          has received written notice thereof.

     (c)  All monies received for purchase of any of the Shares shall be
          forwarded by the Investment Advisor to Cole Capital Corporation for
          delivery to Wells Fargo Bank, N.A. (the "Escrow Agent"), where such
          monies will be deposited in an escrow account established by the
          Company solely for such subscriptions, except that, until such time
          (if any) that such monies are deliverable to the Company pursuant to
          the Escrow Agreement between the Company and the Escrow Agent, the
          Investment Advisor shall return any check not made payable to "Wells
          Fargo Bank, N.A./Cole Credit Property Trust II, Inc." directly to the
          subscriber who submitted the check. Subscriptions will be accepted as
          described in the Prospectus. Each Investment Advisor receiving a
          subscriber's check will deliver such check to the Escrow Agent no
          later than the close of business of the first business day after
          receipt of the subscription documents by the Investment Advisor.

     (d)  During the full term of this Agreement, the Company shall have full
          authority to take such action as it may deem advisable in respect to
          all matters pertaining to the performance of the Investment Advisor
          under this Agreement.

     (e)  The Shares may be purchased by clients of the Investment Advisor only
          where the Shares may be legally offered and sold, only by such persons
          who shall be legally qualified to purchase the Shares, and only by
          such persons in such states in which the Investment Advisor is
          registered as an investment advisor or exempt from any applicable
          registration requirements.

     (f)  The Investment Advisor shall have no obligation under this Agreement
          to advise its clients to purchase any of the Shares.

     (g)  The Investment Advisor will use every reasonable effort to assure that
          Shares are purchased only by investors who:


                                      -2-

          (1)  meet the "investor suitability" standards, including the minimum
               income and net worth standards established by the Company and set
               forth in the Prospectus, and minimum purchase requirements set
               forth in the Registration Statement;

          (2)  can reasonably benefit from an investment in the Company based on
               each prospective investor's overall investment objectives and
               portfolio structure;

          (3)  are able to bear the economic risk of the investment based on
               each prospective investor's overall financial situation; and

          (4)  have apparent understanding of: (a) the fundamental risks of the
               investment; (b) the risk that the prospective investor may lose
               the entire investment; (c) the lack of liquidity of the Shares;
               (d) the restrictions on transferability of the Shares; (e) the
               background and qualifications of the employees and agents of Cole
               REIT Advisors II, LLC, the advisor to the Company; and (f) the
               tax consequences of an investment in the Shares.

          (5)  The Investment Advisor will make the determinations required to
               be made by it pursuant to this subparagraph (g) based on
               information it has obtained from each prospective investor,
               including, at a minimum, but not limited to, the prospective
               investor's age, investment objectives, investment experience,
               income, net worth, financial situation and other investments of
               the prospective investor, as well as any other pertinent factors
               deemed by the Investment Advisor to be relevant.

     (h)  In addition to complying with the provisions of subparagraph (g)
          above, and not in limitation of any other obligations of the
          Investment Advisor to determine suitability imposed by state or
          federal law, the Investment Advisor agrees that it will comply fully
          with the following provisions:

          (1)  The Investment Advisor shall have reasonable grounds to believe,
               based upon information provided by the investor concerning his or
               her investment objectives, other investments, financial situation
               and needs, and upon any other information known by the Investment
               Advisor, that (A) each client of the Investment Advisor that
               purchases Shares is or will be in a financial position
               appropriate to enable him or her to realize to a significant
               extent the benefits (including tax benefits) of an investment in
               the Shares, (B) each client of the Investment Advisor that
               purchases Shares has a fair market net worth sufficient to
               sustain the risks inherent in an investment in the Shares
               (including potential loss and lack of liquidity), and (C) the
               Shares otherwise are or will be a suitable investment for each
               client of the Investment Advisor that purchases Shares, and the
               Investment Advisor shall maintain files disclosing the basis upon
               which the determination of suitability was made;

          (2)  The Investment Advisor shall not execute any transaction
               involving the purchase of Shares in a discretionary account
               without prior written approval of the transactions by the
               investor;

          (3)  The Investment Advisor shall have reasonable grounds to believe,
               based upon the information made available to it, that all
               material facts are adequately and accurately disclosed in the
               Registration Statement and provide a basis for evaluating the
               Shares;


                                      -3-

          (4)  In making the determination set forth in subparagraph (3) above,
               the Investment Advisor shall evaluate items of compensation,
               physical properties, tax aspects, financial stability and
               experience of the sponsor, conflicts of interest and risk
               factors, appraisals, as well as any other information deemed
               pertinent by it;

          (5)  The Investment Advisor shall inform each prospective investor of
               all pertinent facts relating to the lack of liquidity or
               marketability of the Shares.

     (i)  The Investment Advisor agrees to retain in its files, for a period of
          at least six years, information that will establish that each
          purchaser of Shares falls within the permitted class of investors.

     (j)  The Investment Advisor either (i) shall not purchase shares for its
          own account or (ii) shall hold for investment any Shares purchased for
          its own account.

     (k)  The Investment Advisor hereby confirms that it is familiar with
          Securities Act Release No. 4968 and Rule 15c2-8 under the Securities
          Exchange Act of 1934, as amended, relating to the distribution of
          preliminary and final prospectuses, and confirms that it has complied
          and will comply therewith.

     (l)  A sale of Shares shall be deemed to be completed only after the
          Company receives a properly completed subscription agreement for
          Shares from the Investment Advisor evidencing the fact that the
          investor had received a final Prospectus at least five full business
          days prior to the completion date, together with payment of the full
          purchase price of each purchased Share, from a buyer who satisfies
          each of the terms and conditions of the Registration Statement and the
          Prospectus, and only after such subscription agreement has been
          accepted in writing by the Company.

     (m)  Clients of an Investment Advisor who have been advised by such
          Investment Advisor on an ongoing basis regarding investments other
          than in the Company, and who are not being charged by such Investment
          Advisor, through the payment of commissions or otherwise, direct
          transaction based fees in connection with the purchase of the Shares,
          may reduce the amount of selling commissions payable with respect to
          the purchase of their shares down to zero.

2.   Compensation to Investment Advisor

     The Company shall pay no fees, commissions or other compensation to the
Investment Advisor.

3.   Association of the Company with Other Advisors and Dealers

     It is expressly understood between the Company and the Investment Advisor
that the Company may cooperate with broker-dealers who are registered as
broker-dealers with the National Association of Securities Dealers, Inc. (the
"NASD") or with other investment advisors registered under the Investment
Advisers Act of 1940, as amended. Such broker-dealers and investment advisors
may enter into agreements with the Company on terms and conditions identical or
similar to this Agreement and shall receive such rates of commission or other
fees as are agreed to between the Company and the respective broker-dealers and
investment advisors and as are in accordance with the terms of the Prospectus.


                                      -4-

4.   Conditions of the Investment Advisor's Obligations

     The Investment Advisor's obligations hereunder are subject, during the full
term of this Agreement and the Offering to (a) the performance by the Company of
its obligations hereunder and compliance by the Company with the covenants set
forth in Section 7 hereof and (b) the conditions that: (i) the Registration
Statement shall become and remain effective; and (ii) no stop order shall have
been issued suspending the effectiveness of the Offering.

5.   Conditions to the Company's Obligations

     The obligations of the Company hereunder are subject, during the full term
of this Agreement and the Offering, to the conditions that (a) at the effective
date of the Registration Statement and thereafter during the term of this
Agreement while any Shares remain unsold, the Registration Statement shall
remain in full force and effect authorizing the offer and sale of the Shares;
(b) no stop order suspending the effectiveness of the Offering or other order
restraining the offer or sale of the Shares shall have been issued nor
proceedings therefor initiated or threatened by any state regulatory agency or
the SEC; and (c) the Investment Advisor shall have satisfactorily performed all
of its obligations hereunder and complied with the covenants set forth in
Section 6 hereof.

6.   Covenants of the Investment Advisor

     The Investment Advisor covenants, warrants and represents, during the full
term of this Agreement, that:

     (a)  The Investment Advisor is registered as an investment advisor under
          the Investment Advisers Act of 1940, as amended, and registered or
          licensed as an investment advisor by the appropriate regulatory agency
          of each state in which the advisor has clients, or exempt from such
          registration requirements.

     (b)  Neither the Investment Advisor nor any person associated with the
          Investment Advisor is registered as a broker-dealer or registered
          representative with the NASD.

     (c)  The Investment Advisor shall comply with all applicable federal and
          state securities laws, including, without limitation, the disclosure
          requirements of the Investment Advisers Act of 1940, as amended, and
          the provisions thereof requiring disclosure of the existence of this
          Agreement and the compensation to be paid to the Investment Advisor
          hereunder.

     (d)  The Investment Advisor shall maintain the records required by Section
          204 of the Investment Advisers Act of 1940, as amended, and Rule 204-2
          thereunder in the form and for the periods required thereby.

7.   Covenants of the Company

     The Company covenants, warrants and represents, during the full term of
this Agreement, that:

     (a)  It shall use its best efforts to maintain the effectiveness of the
          Registration Statement and to file such applications or amendments to
          the Registration Statement as may be reasonably necessary for that
          purpose.

     (b)  It shall promptly inform the Investment Advisor whenever and as soon
          as it receives or learns of any order issued by the SEC, any state
          regulatory agency or any other regulatory


                                      -5-

          agency which suspends the effectiveness of the Registration Statement
          or prevents the use of the Prospectus or which otherwise prevents or
          suspends the offering or sale of the Shares, or receives notice of any
          proceedings regarding any such order.

     (c)  It shall use its best efforts to prevent the issuance of any order
          described herein at subparagraph (b) hereof and to obtain the lifting
          of any such order if issued.

     (d)  It shall give the Investment Advisor written notice when the
          Registration Statement becomes effective and shall deliver to the
          Investment Advisor such number of copies of the Prospectus, and any
          supplements and amendments thereto, which are finally approved by the
          SEC, as the Investment Advisor may reasonably request for sale of the
          Shares.

     (e)  It shall promptly notify the Investment Advisor of any post-effective
          amendments or supplements to the Registration Statement or Prospectus,
          and shall furnish the Investment Advisor with copies of any revised
          Prospectus and/or supplements and amendments to the Prospectus and/or
          any prospectus relating solely to the DRIP.

     (f)  It shall keep the Investment Advisor fully informed of any material
          development to which the Company is a party or which concerns the
          business and condition of the Company.

     (g)  It shall use its best efforts to cause, at or prior to the time the
          Registration Statement becomes effective, the qualification of the
          Shares for offering and sale under the securities laws of such states
          as the Company shall elect.

8.   Payment of Costs and Expenses

     The Investment Advisor shall pay all costs and expenses incident to the
performance of its obligations under this Agreement.

9.   Indemnification

     (a)  The Investment Advisor agrees to indemnify, defend and hold harmless
          the Company, its affiliates and their or its officers, directors,
          trustees, employees and agents, against all losses, claims, demands,
          liabilities and expenses, joint or several, including reasonable legal
          and other expenses incurred in defending such claims or liabilities,
          whether or not resulting in any liability to the Company, its
          affiliates and their or its officers, directors, trustees, employees
          or agents, which they or any of them may incur arising out of (i) the
          offer or sale (as such term is defined in the Securities Act) by the
          Investment Advisor, or any person acting on its behalf, of any Shares
          pursuant to this Agreement, if such loss, claim, demand, liability, or
          expense arises out of or is based upon an untrue statement or alleged
          untrue statement of a material fact, or any omission or alleged
          omission of a material fact, other than a statement, omission, or
          alleged omission by the Investment Advisor which is also, as the case
          may be, contained in or omitted from the Prospectus or the
          Registration Statement and which statement or omission was not based
          on information supplied to the Company by such Investment Advisor;
          (ii) the breach by the Investment Advisor, or any person acting on its
          behalf, of any of the terms and conditions of this Agreement; or (iii)
          the negligence, malpractice or malfeasance of the Investment Advisor.
          This indemnity provision shall survive the termination of this
          Agreement.


                                      -6-

     (b)  The Company agrees to indemnify, defend and hold harmless the
          Investment Advisor, its officers, directors, employees and agents,
          against all losses, claims, demands, liabilities and expenses,
          including reasonable legal and other expenses incurred in defending
          such claims or liabilities, which they or any of them may incur,
          including, but not limited to, alleged violations of the Securities
          Act, but only to the extent that such losses, claims, demands,
          liabilities and expenses shall arise out of or be based upon (i) any
          untrue statement of a material fact contained in the Prospectus or the
          Registration Statement, as filed and in effect with the SEC or in any
          amendment or supplement thereto, or in any application prepared or
          approved in writing by counsel to the Company and filed with any state
          regulatory agency in order to register or qualify the Shares under the
          securities laws thereof (the "Blue Sky Applications"), or (ii) any
          omission or alleged omission to state therein a material fact required
          to be stated in the Prospectus or the Registration Statement or the
          Blue Sky Applications, or necessary to make such statements, and any
          part thereof, not misleading; provided, further, that any such untrue
          statement, omission or alleged omission is not based on information
          included in any such document which was supplied to the Company, or
          any officer of the Company by such Investment Advisor; provided in
          each case that such claims or liabilities did not arise from
          Investment Advisor's own negligence, malpractice or malfeasance. This
          indemnity provision shall survive the termination of this Agreement.

     (c)  No indemnifying party shall be liable under the indemnity provisions
          contained in subparagraphs (a) and (b) above unless the party to be
          indemnified shall have notified such indemnifying party in writing
          promptly after the summons or other first legal process giving
          information of the nature of the claim served upon the party to be
          indemnified, but failure to notify an indemnifying party of any such
          claim shall not relieve it from any liabilities that it may have to
          the indemnified party against whom action is brought other than on
          account of its indemnity agreement contained in subparagraphs (a) and
          (b) above. In the case of any such claim, if the party to be
          indemnified notified the indemnifying party of the commencement
          thereof as aforesaid, the indemnifying party shall be entitled to
          participate at its own expense in the defense of such claim. If it so
          elects, in accordance with arrangements satisfactory to any other
          indemnifying party or parties similarly notified, the indemnifying
          party has the option to assume the entire defense of the claim, with
          counsel who shall be satisfactory to such indemnified party and all
          other indemnified parties who are defendants in such action; and after
          notice from the indemnifying party of its election so to assume the
          defense thereof and the retaining of such counsel by the indemnifying
          party, the indemnifying party shall not be liable to such indemnified
          party under subparagraphs (a) and (b) above for any legal or other
          expenses subsequently incurred by such indemnified party in connection
          with the defense thereof, other than for the reasonable costs of
          investigation.

10.  Term of Agreement

     This Agreement shall become effective on the date on which this Agreement
is executed by the Company and the Investment Advisor. The Investment Advisor
and the Company may each prevent this Agreement from becoming effective, without
liability to the other, by written notice before the time this Agreement
otherwise would become effective. After this Agreement becomes effective, either
party may terminate it at any time for any reason by giving thirty (30) days'
written notice to the other party; provided, however, that this Agreement shall
in any event automatically terminate at the first occurrence of any of the
following events: (a) the Registration Statement for offer and sale of the
Shares shall cease to be effective; (b) the Offering shall be terminated; or (c)
the Investment Advisor's license or registration to act as an investment advisor
shall be revoked or suspended by any federal, self-regulatory or state


                                      -7-

agency and such revocation or suspension is not cured within ten (10) days from
the date of such occurrence. In any event, this Agreement shall be deemed
suspended during any period for which such license is revoked or suspended.

11.  Notices

     All notices and communications hereunder shall be in writing and shall be
deemed to have been given and delivered when deposited in the United States
mail, postage prepaid, registered or certified mail, to the applicable address
set forth below.

If sent to the Company:

                       COLE CREDIT PROPERTY TRUST II, INC.
                            2555 East Camelback Road
                                    Suite 400
                             Phoenix, Arizona 85016
                              Attention: President

If sent to the Investment Advisor: to the person whose name and address are
identified in Exhibit A hereto.

12.  Successors

     This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and shall not be assigned or transferred by the Investment
Advisor by operation of law or otherwise.

13.  Miscellaneous

     (a)  This Agreement shall be construed in accordance with the applicable
          laws of the State of Arizona.

     (b)  Nothing in this Agreement shall constitute the Investment Advisor as
          in association with or in partnership with the Company.

     (c)  This Agreement, including Exhibit A hereto, embodies the entire
          understanding, between the parties to the Agreement, and no variation,
          modification or amendment to this Agreement shall be deemed valid or
          effective unless it is in writing and signed by both parties hereto.

     (d)  If any provision of this Agreement shall be deemed void, invalid or
          ineffective for any reason, the remainder of the Agreement shall
          remain in full force and effect.

     (e)  This Agreement may be executed in counterpart copies, each of which
          shall be deemed an original but all of which together shall constitute
          one and the same instrument comprising this Agreement.

                         [SIGNATURES ON FOLLOWING PAGES]


                                      -8-

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year indicated on Exhibit A hereto.

SELECTED INVESTMENT ADVISOR             COMPANY

                                        COLE CREDIT PROPERTY TRUST II, INC.
- -------------------------------------
(Name of Investment Advisor)


By:                                     By:
    ---------------------------------       ------------------------------------
Print Name:                             Print Name:
            -------------------------               ----------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------


- -------------------------------------   ----------------------------------------
Witness                                 Witness


                                      -9-

                                    EXHIBIT A
                                       TO
                      SELECTED INVESTMENT ADVISOR AGREEMENT
                                       OF
                       COLE CREDIT PROPERTY TRUST II, INC.

This Exhibit A is attached to and made a part of that certain Selected
Investment Advisor Agreement, dated as of the ___ day of ____________________,
200_, by and between Cole Credit Property Trust II, Inc., (the "Company") and
____________________________ (the "Advisor").

1.   DATE OF AGREEMENT: ____________________, 200__

2.   IDENTITY OF ADVISOR:

     Name: _____________________________________________________________________

     Type of Entity: ___________________________________________________________

     State Organized in: _______________________________________________________

     Qualified to Do Business and in Good Standing in: _________________________

     Registered as an Investment Advisor in the Following States: ______________

3.   NAME AND ADDRESS FOR NOTICE PURPOSES:

     Name: _____________________________________________________________________

     Title: ____________________________________________________________________

     Company: __________________________________________________________________

     Address: __________________________________________________________________

     City, State and Zip Code: _________________________________________________

     Telephone Number (including area code): ___________________________________

4.   PLEASE COMPLETE THE FOLLOWING FOR OUR RECORDS:

     (a)  How many registered investment advisors are with your firm? __________

          (i)  (Please enclose a current list.)


                                      -10-

     (b)  Does your firm publish a newsletter? [ ] Yes [ ] No

          What is/are the frequency of the publication(s)? [ ] Weekly
          [ ] Monthly [ ] Quarterly

          [ ] Bi-weekly [ ] Bi-monthly [ ] Other (please specify) ______________

     PLEASE PLACE COLE CREDIT PROPERTY TRUST, INC. ON YOUR MAILING LIST AND
                PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.

     (a)  Does your firm have regular internal mailings, or bulk package
          mailings to its registered investment advisors? [ ] Yes [ ] No

      PLEASE PLACE COLE CREDIT PROPERTY TRUST II, INC. ON YOUR MAILING LIST
              AND PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.

     (b)  Does your firm have a computerized electronic mail (E-Mail) system for
          your registered investment advisors? [ ] Yes [ ] No

          If so, please provide e-mail address: ________________________________

     (c)  Website address: _____________________________________________________

          Person responsible: __________________________________________________


                                      -11-

EX-10.4

                                                                    EXHIBIT 10.4

                                ESCROW AGREEMENT

Wells Fargo Bank, N.A.
Corporate Trust Services Mail Code MAC S4101-22E
100 W. Washington Street, 22nd Floor
Phoenix, Arizona 85003

     Re: Cole Credit Property Trust II, Inc.

Ladies and Gentlemen:

COLE CREDIT PROPERTY TRUST II, INC., a Maryland corporation (the "Company"),
will issue in a public offering (the "Offering") shares of its common stock (the
"Stock") pursuant to a registration statement on Form S-11 filed by the Company
with the Securities and Exchange Commission. Cole Capital Corporation, an
Arizona corporation (the "Dealer Manager"), will act as dealer manager for the
offering of the Stock. The Company is entering into this agreement to set forth
the terms on which Wells Fargo Bank, N.A. (the "Escrow Agent"), will hold and
disburse the proceeds from subscriptions for the purchase of the Stock in the
Offering until such time as: (i) in the case of subscriptions received from all
nonaffiliates of the Company, the Company has received subscriptions for Stock
resulting in a total of 250,000 shares of common stock sold in the offering (the
"Required Capital"); and (ii) in the case of subscriptions received from
residents of Pennsylvania ("Pennsylvania Subscribers"), the Company has received
subscriptions for Stock from nonaffiliates of the Company resulting in total
minimum capital raised of $25,000,000 (the "Pennsylvania Required Capital").

The Company hereby appoints Wells Fargo Bank, N.A. as Escrow Agent for purposes
of holding the proceeds from the subscriptions for the Stock, on the terms and
conditions hereinafter set forth:

1. Until such time as the Company has received subscriptions for Stock resulting
in total minimum capital raised equal to the Required Capital and such funds are
disbursed from the Escrow Account in accordance with paragraph 3(a) hereof,
persons subscribing to purchase the Stock (the "Subscribers") will be instructed
by the Dealer Manager or any soliciting dealers to remit the purchase price in
the form of checks, drafts, wires, Automated Clearing House (ACH) or money
orders (hereinafter "instruments of payment") payable to the order of "Wells
Fargo Bank, N.A., Escrow Agent for Cole Credit Property Trust II, Inc." (after
subscriptions are received resulting in total minimum capital raised equal to
the Required Capital and such funds are disbursed from the Escrow Account in
accordance with paragraph 3(a) hereof, subscriptions shall continue to be so
submitted unless otherwise instructed by the Dealer Manager). Any checks, drafts
or money orders received made payable to a party other than the Escrow Agent (or
after the Required Capital is received, made payable to a party other than the
party designated by the Dealer Manager) shall be returned to the soliciting
dealer who submitted the check, draft or money order. Within one (1) business
day after receipt of instruments of payment from the Offering, the Dealer
Manager will (a) send to the Escrow Agent: each Subscriber's name, address,
executed IRS Form W-9, number of shares purchased, and purchase price remitted,
and (b) Escrow Agent will deposit the instruments of payment from such
Subscribers (the "Subscription Materials"), into an interest-bearing deposit
account entitled "Escrow Account for the Benefit of Subscribers for Common Stock
of Cole Credit Property Trust II, Inc." (the "Escrow Account"), which deposit
shall occur within one (1) business day after the Dealer Manager's receipt of
all the Subscription Materials, until such Escrow Account has closed pursuant to
paragraph 3(a) hereof. Instruments of payment received from Pennsylvania
Subscribers (as identified as such by the Company) shall be accounted for
separately in a subaccount entitled "Escrow Account for the Benefit of
Pennsylvania Subscribers" (the "Pennsylvania Escrow Account"), until such
Pennsylvania

Escrow Account has closed pursuant to paragraph 3(a) hereof. Each of the Escrow
Account and the Pennsylvania Escrow Account will be established and maintained
in such a way as to permit the interest income calculations described in
paragraph 7.

2. The Escrow Agent agrees to promptly process for collection the instruments of
payment upon deposit into the Escrow Account or the Pennsylvania Escrow Account,
as applicable. Deposits shall be held in the Escrow Account or the Pennsylvania
Escrow Account until such funds are disbursed in accordance with paragraph 3
hereof. Prior to disbursement of the funds deposited in the Escrow Account or
the Pennsylvania Escrow Account, such funds shall not be subject to claims by
creditors of the Company or the Dealer Manager or any of their affiliates. If
any of the instruments of payment are returned to the Escrow Agent for
nonpayment prior to receipt of the Required Capital or, in connection with
subscriptions from Pennsylvania Subscribers, the Pennsylvania Required Capital,
the Escrow Agent shall promptly notify the Dealer Manager and the Company in
writing via mail, email or facsimile of such nonpayment, and is authorized to
debit the Escrow Account or the Pennsylvania Escrow Account, as applicable in
the amount of such returned payment as well as any interest earned on the amount
of such payment.

3. (a) (i) Subject to the provisions of subparagraphs 3(b)-3(f) below, once the
collected funds in the Escrow Account are an amount equal to or greater than the
Required Capital, the Escrow Agent shall promptly notify the Company and, upon
receiving written instruction from the Company, (A) disburse to the Company, by
check, ACH or wire transfer, the funds in the Escrow Account representing the
gross purchase price for the Stock, and (B) disburse to the Subscribers or the
Company, as applicable, any interest thereon pursuant to the provisions of
subparagraph 3(f). After such time the Escrow Account shall remain open and the
Company shall continue to cause subscriptions for the Stock that are not to be
deposited in the Pennsylvania Escrow Account to be deposited therein until the
Company informs the Escrow Agent in writing to close the Escrow Account, and
thereafter any subscription documents and instruments of payment received by the
Escrow Agent from Subscribers other than Pennsylvania Subscribers shall be
forwarded directly to the Company. For purposes of this Agreement, the term
"collected funds" shall mean all funds received by the Escrow Agent that have
cleared normal banking channels and are in the form of cash or cash equivalent.

          (ii) regardless of any release of funds from the Escrow Account, the
Company and the Dealer Manager shall continue to forward instruments of payment
and Subscription Materials received from Pennsylvania Subscribers for deposit
into the Pennsylvania Escrow Account to the Escrow Agent until such time as the
Company notifies the Escrow Agent in writing that total subscription proceeds
(including the amount then in the Pennsylvania Escrow Account) equal or exceed
the Pennsylvania Required Capital. Within five days, the Escrow Agent shall (A)
disburse to the Company, by check, ACH or wire transfer, the funds then in the
Pennsylvania Escrow Account representing the gross purchase price for the Stock,
and (B) disburse to the Pennsylvania Subscribers or the Company, as applicable,
any interest thereon pursuant to the provisions of subparagraph 3(f). Following
such disbursements, the Escrow Agent shall close the Pennsylvania Escrow
Account, and thereafter any Subscription Materials and instruments of payment
received by the Escrow Agent from Pennsylvania Subscribers shall be deposited
directly to the Escrow Account (or to the Company, if it has closed the Escrow
Account, as instructed in writing by the Company).

     (b) Within four business days of the close of business on the date that is
one year following commencement of the Offering (the "Expiration Date"), the
Escrow Agent shall promptly notify the Company if it is not in receipt of
evidence of Subscription Materials accepted on or before the Expiration Date,
and instruments of payment dated not later than that the Expiration Date, for
the purchase of at least the Required Capital (from all sources but exclusive of
any funds received from subscriptions for Stock from entities which the Company
has notified the Escrow Agent are affiliated with the Company). At


                                      -2-

such time, the Escrow Agent shall promptly return directly to each Subscriber
the collected funds deposited in the Escrow Account and the Pennsylvania Escrow
Account on behalf of such Subscriber (unless earlier disbursed in accordance
with paragraph 3(c)), or shall return the instruments of payment delivered, but
not yet processed for collection prior to such time, together with interest in
the amounts calculated pursuant to paragraph 7 for each Subscriber at the
address provided by the Dealer Manager or the Company. Notwithstanding the
above, in the event the Escrow Agent has not received an executed IRS Form W-9
at such time for each Subscriber, the Escrow Agent shall remit an amount to the
Subscribers in accordance with the provisions hereof, withholding thirty percent
(30%) of any interest income on subscription proceeds (determined in accordance
with paragraph 7) attributable to each Subscriber for whom the Escrow Agent does
not possess an executed IRS Form W-9. However, the Escrow Agent shall not be
required to remit any payments until funds represented by such payments have
been collected.

     (c) Notwithstanding subparagraphs 3(a) and 3(b) above, if the Escrow Agent
is not in receipt of evidence of subscriptions accepted on or before the close
of business on such date that is 120 days after commencement of the Offering
(the Company will notify the Escrow Agent of the commencement date of the
Offering) (the "Initial Escrow Period"), and instruments of payment dated not
later than that date, for the purchase of Stock providing for total purchase
proceeds from all nonaffiliated sources that equal or exceed the Pennsylvania
Required Capital, the Escrow Agent shall promptly notify the Company.
Thereafter, the Company shall send to each Pennsylvania Subscriber by certified
mail within ten (10) calendar days after the end of the Initial Escrow period a
notification in the form of Exhibit A. If, pursuant to such notification, a
Pennsylvania Subscriber requests the return of his or her subscription funds
within ten (10) calendar days after receipt of the notification (the "Request
Period"), the Escrow Agent shall promptly refund directly to each Pennsylvania
Subscriber the collected funds deposited in the Pennsylvania Escrow Account on
behalf of such Pennsylvania Subscriber or shall return the instruments of
payment delivered, but not yet processed for collection prior to such time, to
the address provided by the Dealer Manager or the Company, together with
interest income in the amounts calculated pursuant to paragraph 7.
Notwithstanding the above, if the Escrow Agent has not received an executed IRS
Form W-9 is for such Pennsylvania Subscriber, the Escrow Agent shall thereupon
remit an amount to such Pennsylvania Subscriber in accordance with the
provisions hereof, withholding thirty percent (30%) of any interest income
earned on subscription proceeds (determined in accordance with paragraph 7)
attributable to such Pennsylvania Subscriber. However, the Escrow Agent shall
not be required to remit such payments until the Escrow Agent has collected
funds represented by such payments.

     (d) The subscription funds of Pennsylvania Subscribers who do not request
the return of their subscription funds within the Request Period shall remain in
the Pennsylvania Escrow Account for successive 120-day escrow periods (a
"Successive Escrow Period"), each commencing automatically upon the termination
of the prior Successive Escrow Period, and the Company and Escrow Agent shall
follow the notification and payment procedure set forth in subparagraph 3(c)
above with respect to the Initial Escrow Period for each Successive Escrow
Period until the occurrence of the earliest of (i) the Expiration Date, (ii) the
receipt and acceptance by the Company of subscriptions for the purchase of Stock
with total purchase proceeds that equal or exceed the Pennsylvania Required
Capital and the disbursement of the Pennsylvania Escrow Account on the terms
specified herein, or (iii) all funds held in the Pennsylvania Escrow Account
having been returned to the Pennsylvania Subscribers in accordance with the
provisions hereof.

     (e) If the Company rejects any subscription for which the Escrow Agent has
collected funds, the Escrow Agent shall, upon the written request of the
Company, promptly issue a refund to the rejected Subscriber. If the Company
rejects any subscription for which the Escrow Agent has not yet collected funds
but has submitted the Subscriber's check for collection, the Escrow Agent shall
promptly return the funds in the amount of the Subscriber's check to the
rejected Subscriber after such funds have been


                                      -3-

collected. If the Escrow Agent has not yet submitted a rejected Subscriber's
check for collection, the Escrow Agent shall promptly remit the Subscriber's
check directly to the Subscriber.

     (f) At any time after funds are disbursed upon the Company's acceptance of
subscriptions pursuant to subparagraph 3(a) above on the tenth (10th) day
following the date of such acceptance, the Escrow Agent shall promptly provide
directly to each Subscriber the amount of the interest payable to the
Subscribers; provided that the Escrow Agent is in possession of such
Subscriber's executed IRS Form W-9. In the event an executed IRS Form W-9 is not
received for each Subscriber the Escrow Agent shall remit an amount to the
Subscribers in accordance with the provisions hereof, withholding thirty percent
(30%) of any interest income on subscription proceeds (determined in accordance
with paragraph 7) attributable to those Subscribers for whom the Escrow Agent
does not possess an executed IRS Form W-9. However, the Escrow Agent shall not
be required to remit any payments until the Escrow Agent has collected funds
represented by such payments. The forgoing notwithstanding, interest, if any,
earned on accepted subscription proceeds will be payable to a Subscriber only if
the Subscriber's funds have been held in escrow by the Escrow Agent for at least
35 days; interest, if any, earned on accepted subscription proceeds of
Subscribers' funds held less than 35 days will be payable to the Company.

     In the event that instruments of payment are returned for nonpayment, the
Escrow Agent is authorized to debit the Escrow Account or the Pennsylvania
Escrow Account, as applicable, in accordance with paragraph 2 hereof.

4. The Escrow Agent shall provide to the Company weekly statements (or more
frequently as reasonably requested by the Company) on the account balance in
each of the Escrow Account and the Pennsylvania Escrow Account, and the activity
in such accounts since the last report.

5. Prior to the disbursement of funds deposited in the Escrow Account or the
Pennsylvania Escrow Account in accordance with the provisions of paragraph 3
hereof, the Escrow Agent shall invest all of the funds deposited as well as
earnings and interest derived therefrom in the Escrow Account or the
Pennsylvania Escrow Account, as applicable, in the "Short-Term Investments"
specified below at the written direction of the Company, unless the costs to the
Company for the making of such investment are reasonably expected to exceed the
anticipated interest earnings from such investment in which case the funds and
interest thereon shall remain in the respective escrow account until the balance
in the respective escrow account reaches the minimum amount necessary for the
anticipated interest earnings from such investment to exceed the costs to the
Company for the making of such investment, as determined by the Company based
upon applicable interest rates.

     "Short-Term Investments" include obligations of, or obligations guaranteed
by, the United States government or bank money-market accounts or certificates
of deposit of national or state banks that have deposits insured by the Federal
Deposit Insurance Corporation (including certificates of deposit of any bank
acting as a depository or custodian for any such funds) which mature on or
before the Expiration Date, unless such instrument cannot be readily sold or
otherwise disposed of for cash by the Expiration Date without any dissipation of
the offering proceeds invested. Without limiting the generality of the
foregoing, Exhibit B hereto sets forth specific Short-Term Investments that
shall be deemed permissible investments hereunder.

The following securities are not permissible investments:

     (a)  money market funds;

     (b)  corporate equity or debt securities;

     (c)  repurchase agreements;

     (d)  bankers' acceptances;


                                      -4-

     (e)  commercial paper; and

     (f)  municipal securities.

It is hereby expressly agreed and stipulated by the parties hereto that the
Escrow Agent shall not be required to exercise any discretion hereunder and
shall have no investment or management responsibility and, accordingly, shall
have no duty to, or liability for its failure to, provide investment
recommendations or investment advice to the parties hereto. It is the intention
of the parties hereto that the Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.

6. The Escrow Agent is entitled to rely upon written instructions received from
the Company, unless the Escrow Agent has actual knowledge that such instructions
are not valid or genuine; provided that, if in the Escrow Agent's opinion, any
instructions from the Company are unclear, the Escrow Agent may request
clarification from the Company prior to taking any action, and if such
instructions continue to be unclear, the Escrow Agent may rely upon written
instructions from the Company's legal counsel in distributing or continuing to
hold any funds. However, the Escrow Agent shall not be required to disburse any
funds attributable to instruments of payment that have not been processed for
collection, until such funds are collected and then shall disburse such funds in
compliance with the disbursement instructions from the Company.

7. If the Offering terminates prior to receipt of the Required Capital, or one
or more Pennsylvania Subscribers elects to have his or her subscription returned
in accordance with paragraph 3, interest income earned on subscription proceeds
deposited in the Escrow Account (the "Escrow Income"), or the Pennsylvania
Escrow Account (the "Pennsylvania Escrow Income"), as applicable, shall be
remitted to Subscribers, or to the Company if the applicable Subscriber's funds
have been held in escrow by the Escrow Agent for less than 35 days, in
accordance with paragraph 3 and without any deductions for escrow expenses. The
Company shall reimburse the Escrow Agent for all escrow expenses. The Escrow
Agent shall remit all such Escrow Income and Pennsylvania Escrow Income in
accordance with paragraph 3. If the Company chooses to leave the Escrow Account
open after receiving the Required Capital then it shall make regular acceptances
of subscriptions therein, but no less frequently than monthly, and the Escrow
Income from the last such acceptance shall be calculated and remitted to the
Subscribers or the Company, as applicable, pursuant to the provisions of
paragraph 3(d).

8. The Escrow Agent shall receive compensation from the Company as set forth in
Exhibit C attached hereto.

9. In performing any of its duties hereunder, the Escrow Agent shall not incur
any liability to anyone for any damages, losses, or expenses, except for willful
misconduct, breach of trust, or gross negligence. Accordingly, the Escrow Agent
shall not incur any such liability with respect to any action taken or omitted
(a) in good faith upon advice of the Escrow Agent's counsel given with respect
to any questions relating to the Escrow Agent duties and responsibilities under
this Agreement, or (b) in reliance upon any instrument, including any written
instrument or instruction provided for in this Agreement, not only as to its due
execution and validity and effectiveness of its provisions but also as to the
truth and accuracy of information contained therein, which the Escrow Agent
shall in good faith believe to be genuine, to have been signed or presented by a
proper person or persons and to conform to the provisions of this Agreement.

10. The Company hereby agrees to indemnify and hold the Escrow Agent harmless
against any and all losses, claims, damages, liabilities, and expenses,
including reasonable attorneys' fees and disbursements, that may be imposed on
or incurred by the Escrow Agent in connection with acceptance of appointment as
the Escrow Agent hereunder, or the performance of the duties hereunder,
including any


                                      -5-

litigation arising from this Agreement or involving the subject matter hereof,
except where such losses, claims, damages, liabilities, and expenses result from
willful misconduct, breach of trust, or gross negligence.

11. In the event of a dispute between the parties hereto sufficient in the
Escrow Agent's discretion to justify doing so, the Escrow Agent shall be
entitled to tender into the registry or custody of any court of competent
jurisdiction all money or property in its hands under this Agreement, together
with such legal pleadings as deemed appropriate, and thereupon be discharged
from all further duties and liabilities under this Agreement. In the event of
any uncertainty as to the duties hereunder, the Escrow Agent may refuse to act
under the provisions of this Agreement pending order of a court of competent
jurisdiction and shall have no liability to the Company or to any other person
as a result of such action. Any such legal action may be brought in such court,
as the Escrow Agent shall determine to have jurisdiction thereof. The filing of
any such legal proceedings shall not deprive the Escrow Agent of its
compensation earned prior to such filing.

12. All communications and notices required or permitted by this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
or by messenger or by overnight delivery service or when received via telecopy
or other electronic transmission, in all cases addressed to the person for whom
it is intended at such person's address set forth below or to such other address
as a party shall have designated by notice in writing to the other party in the
manner provided by this paragraph:

     (a)  if to the Company:

          Cole Credit Property Trust II, Inc.
          2555 E. Camelback Road, Suite 400
          Phoenix, Arizona 85016
          Fax: (602) 778-8780
          Attention: Blair D. Koblenz

     (b)  if to the Dealer Manager:

          Cole Capital Corporation
          2555 E. Camelback Road, Suite 400
          Phoenix, Arizona 85016
          Fax: (602) 778-8780
          Attention: Blair D. Koblenz

     (c)  if to the Escrow Agent:

          Wells Fargo Bank, N.A.
          Corporate Trust Services, Mail Code MAC S4101-22E
          100 W. Washington Street, 22nd Floor
          Phoenix, Arizona 85003
          Fax: (602) 378-2333
          Attention: Brenda D. Black

Each party hereto may, from time to time, change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other parties.

13. This Agreement shall be governed by the laws of the State of Arizona as to
both interpretation and performance without regard to the conflict of laws rules
thereof.


                                      -6-

14. The provisions of this Agreement shall be binding upon the legal
representatives, successors, and assigns of the parties hereto.

15. The Company and the Dealer Manager hereby acknowledge that Wells Fargo Bank,
N.A. is serving as Escrow Agent only for the limited purposes herein set forth,
and hereby agree that they will not represent or imply that, by serving as
Escrow Agent hereunder or otherwise, have investigated the desirability or
advisability of investment in the Company or have approved, endorsed, or passed
upon the merits of the Stock or the Company, nor shall they use the name of the
Escrow Agent in any manner whatsoever in connection with the offer or sale of
the Stock other than by acknowledgment that is has agreed to serve as Escrow
Agent for the limited purposes herein set forth.

16. This Agreement and any amendment hereto may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed to be an
original.

17. Except as otherwise required for subscription funds received from
Pennsylvania Subscribers as provided herein, in the event that the Dealer
Manager receives instruments of payment after the Required Capital has been
received and the proceeds of the Escrow Account have been distributed to the
Company, the Escrow Agent is hereby authorized to deposit such instruments of
payment within one (1) business day to any deposit account as directed by the
Company. The application of said funds into a deposit account or to forward such
funds directly to the Company, in either case directed by the Company shall be a
full acquittance to the Escrow Agent, who shall not be responsible for the
application of said funds thereafter.

18. The Escrow Agent shall be bound only by the terms of this Escrow Agreement
and shall not be bound by or incur any liability with respect to any other
agreements or understanding between any other parties, whether or not the Escrow
Agent has knowledge of any such agreements or understandings.

19. Indemnification provisions set forth herein shall survive the termination of
this Agreement.

20. In the event that any part of this Agreement is declared by any court or
other judicial or administrative body to be null, void, or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect.

21. Unless otherwise provided in this Agreement, final termination of this
Escrow Agreement shall occur on the date that all funds held in the Escrow
Account and the Pennsylvania Escrow Account are distributed either (a) to the
Company or to Subscribers and the Company has informed the Escrow Agent in
writing to close the Escrow Account and the Pennsylvania Escrow Account pursuant
to paragraph 3 hereof or (b) to a successor escrow agent upon written
instructions from the Company.

22. The Escrow Agent has no responsibility for accepting, rejecting, or
approving subscriptions. The Escrow Agent shall complete an OFAC search, in
compliance with its policy and procedures, of each subscription check prior to
depositing the check in the Escrow Account or the Pennsylvania Escrow Account
and shall inform the Company if a subscription check fails the OFAC search. The
Dealer Manager shall provide a copy of each subscription check in order that the
Escrow Agent may perform such OFAC search.

23. This Agreement shall not be modified, revoked, released, or terminated
unless reduced to writing and signed by all parties hereto, subject to the
following paragraph.


                                      -7-

If, at any time, any attempt is made to modify this Agreement in a manner that
would increase the duties and responsibilities of the Escrow Agent or to modify
this Agreement in any manner which the Escrow Agent shall deem undesirable, or
at any other time, the Escrow Agent may resign by providing written notice to
the Company and until (a) the acceptance by a successor escrow agent as shall be
appointed by the Company; or (b) thirty (30) days after such written notice has
been given, whichever occurs sooner, the Escrow Agent's only remaining
obligation shall be to perform its duties hereunder in accordance with the terms
of the Agreement.

24. The Escrow Agent may resign at any time from its obligations under this
Escrow Agreement by providing written notice to the Company. Such resignation
shall be effective on the date specified in such notice, which shall be not less
than thirty (30) days after such written notice has been given. The Escrow Agent
shall have no responsibility for the appointment of a successor escrow agent.

25. The Escrow Agent may be removed for cause by the Company by written notice
to the Escrow Agent effective on the date specified in such written notice. The
removal of the Escrow Agent shall not deprive the Escrow Agent of its
compensation earned prior to such removal.

                            [Signature page follows]


                                      -8-

Agreed to as of the ___ day of _________, 200__.

                                        COLE CREDIT PROPERTY TRUST II, INC.


                                        By:
                                            ------------------------------------
                                           Christopher H. Cole
                                           Chief Executive Officer and President


                                        COLE CAPITAL CORPORATION


                                        By:
                                            ------------------------------------
                                           Blair D. Koblenz
                                           President

The terms and conditions contained above are hereby accepted and agreed to by:

WELLS FARGO BANK, N.A. AS ESCROW AGENT


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


                                      -9-

                                    EXHIBIT A

                  [Form of Notice to Pennsylvania Subscribers]

You have tendered a subscription to purchase shares of common stock of Cole
Credit Property Trust II, Inc. (the "Company"). Your subscription is currently
being held in escrow. The guidelines of the Pennsylvania Securities Commission
do not permit the Company to accept subscriptions from Pennsylvania residents
until an aggregate of $25,000,000 of gross offering proceeds have been received
by the Company. The Pennsylvania guidelines provide that until this minimum
amount of offering proceeds is received by the Company, every 120 days during
the offering period Pennsylvania Subscribers may request that their subscription
be returned.

If you wish to continue your subscription in escrow until the Pennsylvania
minimum subscription amount is received, nothing further is required.

If you wish to terminate your subscription for the Company's common stock and
have your subscription returned please so indicate below, sign, date, and return
to the Escrow Agent, Wells Fargo Bank, N.A., at Corporate Trust Services Mail
Code MAC S4101-22E, 100 W. Washington Street, 22nd Floor, Phoenix, Arizona
85003.

I hereby terminate my prior subscription to purchase shares of common stock of
Cole Credit Property Trust II, Inc. and request the return of my subscription
funds. I certify to Cole Credit Property Trust II, Inc. that I am a resident of
Pennsylvania.


                                        Signature:
                                                   -----------------------------

                                        Name:
                                              ----------------------------------
                                                        (please print)

                                        Date:
                                              ----------------------------------

Please send the subscription refund to:

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

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

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

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

                                    EXHIBIT B

                         PERMISSIBLE ESCROW INVESTMENTS

(i)  Bank accounts;

(ii) Bank money-market accounts;

(iii) Short time certificates of deposit issued by a bank; and

(iv) Short-term securities issued or guaranteed by the U.S. government

                                    EXHIBIT C

                            ESCROW AGENT COMPENSATION

                                [TO BE PROVIDED]

EX-31.1

                                                                    EXHIBIT 31.1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher H. Cole, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Cole Credit
            Property Trust II, Inc.;

      2.    Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
            registrant and have:

            a)    designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiary, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b)    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures as of the end of the period covered by this
                  report based on such evaluation; and

            c)    disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

      5.    The registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of registrant's board of directors (or persons performing
            the equivalent functions):

            a)    all significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

                                         /s/ Christopher H. Cole
                               ----------------------------------------------
                                           Christopher H. Cole
                                  Chief Executive Officer and President

Date: August 12, 2005

EX-31.2

                                                                    EXHIBIT 31.2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Blair D. Koblenz, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Cole Credit
            Property Trust II, Inc.;

      2.    Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
            registrant and have:

            a)    designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b)    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures as of the end of the period covered by this
                  report based on such evaluation; and

            c)    disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

      5.    The registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of registrant's board of directors (or persons performing
            the equivalent functions):

            a)    all significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

                                                    /s/ Blair D. Koblenz
                                             -----------------------------------
                                                      Blair D. Koblenz
                                                Executive Vice President and
                                                  Chief Financial Officer

Date: August 12, 2005

EX-32.1

                                                                    EXHIBIT 32.1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                                 (18 U.S.C 1350)

      Each of the undersigned officers of Cole Credit Property Trust II, Inc.
(the "Company") hereby certifies, for purposes of Section 1350 of Chapter 63 of
Title 18 of the United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to his knowledge:

            (i) the accompanying Quarterly Report on Form 10-Q of the Company
      for the period ended June 30, 2005 (the "Report") fully complies with the
      requirements of Section 13(a) or Section 15(d), as applicable, of the
      Securities Exchange Act of 1934, as amended; and

            (ii) the information contained in the Report fairly presents, in all
      material respects, the financial condition and results of operations of
      the Company.

                                               /s/ Christopher H. Cole
                                          --------------------------------------
                                                 Christopher H. Cole
                                             Chief Executive Officer and
                                                      President

                                                 /s/ Blair D. Koblenz
                                          --------------------------------------
                                                   Blair D. Koblenz
                                             Executive Vice President and
                                               Chief Financial Officer

Date: August 12, 2005

      The foregoing certification is being furnished with the Company's 10-Q for
the period ended June 30, 2005 pursuant to 18 U.S.C. Section 1350. It is not
being filed for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, and it is not to be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
information language in such filing.

A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.