Exhibit 10.6
COLE CREDIT PROPERTY TRUST II, INC.
THIRD AMENDED AND RESTATED
DISTRIBUTION REINVESTMENT PLAN
Effective July 1, 2010
     Cole Credit Property Trust II, Inc., a Maryland corporation (the
“Company”), has adopted this Third Amended and Restated Distribution
Reinvestment Plan (the “Plan”), to be administered by the Company or an
unaffiliated third party (the “Administrator”) as agent for participants in the
Plan (“Participants”), on the terms and conditions set forth below.
     1. Election to Participate. Any holder of shares of common stock of the
Company, par value $.01 per share (the “Shares”), and, subject to Section 8(b)
herein, any participant in any previous or subsequent publicly offered limited
partnership, real estate investment trust or other real estate program sponsored
by an affiliate of Cole REIT Advisors II, LLC, the Company’s advisor (an
“Affiliated Program”), may become a Participant in the Plan by making a written
election to participate in the Plan by completing and executing an authorization
form obtained from the Administrator or any other appropriate documentation as
may be acceptable to the Administrator. Participants in the Plan generally are
required to have the full amount of their cash distributions (other than
“Excluded Distributions” as defined below) with respect to all Shares, or shares
of stock or units of limited partnership interest of an Affiliated Program
(collectively, “Securities”), owned by them reinvested pursuant to the Plan.
However, the Administrator shall have the sole discretion, upon the request of a
Participant, to accommodate a Participant’s request for less than all of the
Participant’s Securities to be subject to participation in the Plan.
     2. Distribution Reinvestment. The Administrator will receive all cash
distributions (other than Excluded Distributions) paid by the Company or an
Affiliated Program with respect to Securities of Participants (collectively, the
“Distributions”). Participation will commence with the next Distribution payment
after receipt of the Participant’s election pursuant to Paragraph 1 hereof,
provided it is received on or prior to the last day of the period to which such
Distribution relates. A holder of Securities will become a Participant in the
Plan effective on the first day of the period following such election, and the
election will apply to all Distributions attributable to such period and to all
periods thereafter. As used in this Plan, the term “Excluded Distributions”
shall mean those cash or other distributions designated as Excluded
Distributions by the Company’s board of directors, or the board of directors or
general partner of an Affiliated Program, as applicable.
     3. General Terms of Plan Investments.
          (a) The Administrator will invest Distributions in Shares at a price
equal to the Estimated Share Value (as defined herein), as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to the Shares. For purposes of establishing the purchase price for
Shares pursuant to the Plan, “Estimated Share Value” shall mean the most
recently disclosed reasonable estimated value of the Shares as determined by the
Company’s board of directors, including a majority of the independent directors.
If the Company has sold property and has made one or more special distributions
to stockholders of all or a portion of the net proceeds from such sales
subsequent to the establishment of the Estimated Share Value, the purchase price
for Shares will be reduced by the net sale proceeds per share distributed to
investors prior to the investment date. The Company’s board of directors will,
in its sole discretion, determine which distributions, if any, constitute a
special distribution. No advance notice of pricing pursuant to this Paragraph
3(a) shall be required, other than to the extent the issue is a material event,
requiring the public filing of a Form 8-K.
          (b) The Administrator will invest Distributions in Shares that are
registered with the Securities and Exchange Commission (the “Commission”)
pursuant to an effective registration statement for Shares for use in the Plan
(a “Registration Statement”).
          (c) Selling commissions will not be paid for the Shares purchased
pursuant to the Plan.
          (d) Dealer manager fees will not be paid for the Shares purchased
pursuant to the Plan.
          (e) For each Participant, the Administrator will maintain an account
which shall reflect for each period for which Distributions are paid (a
“Distribution Period”) the Distributions received by the Administrator on behalf
of such Participant. A Participant’s account shall be reduced as purchases of
Shares are made on behalf of such Participant.

 

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          (f) Distributions shall be invested in Shares by the Administrator on
the payment date with respect to such Distributions to the extent Shares are
available for purchase under the Plan. If sufficient Shares are not available,
any such funds that have not been invested in Shares within 30 days after
receipt by the Administrator and, in any event, by the end of the fiscal quarter
in which they are received, will be distributed to Participants. Any interest
earned on such accounts will be returned to the respective Participant.
          (g) Participants may acquire fractional Shares, computed to four
decimal places, so that 100% of the Distributions will be used to acquire
Shares. The ownership of the Shares shall be reflected on the books of the
Company or its transfer agent.
          (h) A Participant will not be able to acquire Shares under the Plan to
the extent that such purchase would cause the Participant to exceed the
ownership limits set forth in the Company’s charter, as amended, unless exempted
by the Board.
     4. Absence of Liability. Neither the Company nor the Administrator shall
have any responsibility or liability as to the value of the Shares or any change
in the value of the Shares acquired for the Participant’s account. Neither the
Company nor the Administrator shall be liable for any act done in good faith, or
for any good faith omission to act hereunder.
     5. Suitability. Each Participant shall notify the Administrator in the
event that, at any time during his participation in the Plan, there is any
material change in the Participant’s financial condition, as compared to
information previously provided to the shareholder’s broker or financial
advisors or inaccuracy of any representation under the subscription agreement
for the Participant’s initial purchase of Securities. A material change shall
include any anticipated or actual material decrease in net worth or annual gross
income, or any other material change in circumstances that is likely to cause
the Participant’s broker or financial advisor to determine that an investment in
Shares is no longer suitable and appropriate for the Participant or that would
cause the Participant to fail to meet the minimum suitability standards set
forth in the Subscription Agreement signed by the Participant.
     6. Reports to Participants. Within ninety (90) days after the end of each
calendar year, the Administrator will mail to each Participant a statement of
account describing, as to such Participant, the Distributions received, the
number of Shares purchased and the per share purchase price for such Shares
pursuant to the Plan during the prior year. Each statement also shall advise the
Participant that, in accordance with Section 5 hereof, the Participant is
required to notify the Administrator in the event there is any material change
in the Participant’s financial condition or if any representation made by the
Participant under the subscription agreement for the Participant’s initial
purchase of Securities becomes inaccurate. Tax information regarding a
Participant’s participation in the Plan will be sent to each Participant by the
Company or the Administrator at least annually.
     7. Taxes. Taxable Participants may incur a tax liability for Distributions
even though they have elected not to receive their Distributions in cash but
rather to have their Distributions reinvested in Shares under the Plan.
     8. Reinvestment in Subsequent Programs.
          (a) The Company may determine, in its sole discretion, to cause the
Administrator to provide to each Participant notice of the opportunity to have
some or all of such Participant’s Distributions (at the discretion of the
Administrator and, if applicable, the Participant) invested through the Plan in
any publicly offered Affiliated Program (a “Subsequent Program”). If the Company
makes such an election, Participants may invest Distributions in equity
securities issued by such Subsequent Program through the Plan only if the
following conditions are satisfied:
          (i) prior to the time of such reinvestment, the Participant has
received the final prospectus and any supplements thereto offering interests in
the Subsequent Program and such prospectus allows investment pursuant to a
distribution reinvestment plan;
          (ii) a registration statement covering the interests in the Subsequent
Program has been declared effective under the Securities Act of 1933, as
amended;
          (iii) the offering and sale of such interests are qualified for sale
under the applicable state securities laws;
          (iv) the Participant executes the subscription agreement included with
the prospectus for the Subsequent Program; and

 

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          (v) the Participant qualifies under applicable investor suitability
standards as contained in the prospectus for the Subsequent Program.
          (b) The Company may determine, in its sole discretion, to cause the
Administrator to allow one or more participants of an Affiliated Program to
become a “Participant.” If the Company makes such an election, such Participants
may invest distributions received from the Affiliated Program in Shares through
this Plan, if the following conditions are satisfied:
          (i) prior to the time of such reinvestment, the Participant has
received the final prospectus and any supplements thereto offering interests in
the Plan and such prospectus allows investment pursuant to the Plan;
          (ii) a registration statement covering the interests in the Plan has
been declared effective under the Securities Act of 1933, as amended;
          (iii) the offering and sale of such interests are qualified or sale
under the applicable state securities laws;
          (iv) the Participant executes the subscription agreement included with
the prospectus for the Plan; and
          (v) the Participant qualifies under applicable investor suitability
standards as contained in the prospectus for the Plan, the Participant’s broker
or financial advisor determines that an investment in Shares is suitable and
appropriate for the Participant.
     9. Termination.
          (a) A Participant may terminate or modify his participation in the
Plan at any time by written notice to the Administrator. To be effective for any
Distribution, such notice must be received by the Administrator on or prior to
the last day of the Distribution Period to which it relates.
          (b) A Participant’s transfer of Shares will terminate participation in
the Plan with respect to such transferred Shares as of the first day of the
Distribution Period in which such transfer is effective, unless the transferee
of such Shares in connection with such transfer demonstrates to the
Administrator that such transferee meets the requirements for participation
hereunder and affirmatively elects participation by delivering an executed
authorization form or other instrument required by the Administrator.
     10. State Regulatory Restrictions. The Administrator is authorized to deny
participation in the Plan to residents of any state or foreign jurisdiction that
imposes restrictions on participation in the Plan that conflict with the general
terms and provisions of this Plan.
     11. Amendment or Termination by Company.
          (a) The terms and conditions of this Plan may be amended by the
Company at any time, including but not limited to an amendment to the Plan to
substitute a new Administrator to act as agent for the Participants, by mailing
an appropriate notice at least ten (10) days prior to the effective date thereof
to each Participant, provided, however, the Company may not amend the Plan to
(a) provide for selling commissions or dealer manager fees to be paid for shares
purchased pursuant to this Plan or (b) revoke a Participant’s right to terminate
or modify his participation in the Plan.
          (b) The Administrator may terminate a Participant’s individual
participation in the Plan and the Company may terminate the Plan itself, at any
time by providing ten (10) days’ prior notice to a Participant, or to all
Participants, as the case may be.
          (c) After termination of the Plan or termination of a Participant’s
participation in the Plan, the Administrator will send to each Participant a
check for the amount of any Distributions in the Participant’s account that have
not been invested in Shares. Any future Distributions with respect to such
former Participant’s Shares made after the effective date of the termination of
the Participant’s participation will be sent directly to the former Participant.
     12. Participation by Limited Partners of Cole Operating Partnership II, LP.
For purposes of this Plan, “stockholders” shall be deemed to include limited
partners of Cole Operating Partnership II, LP (the “Partnership”),
“Participants” shall be deemed to include limited partners of the Partnership
that elect to participate in the Plan, and

 

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“Distribution,” when used with respect to a limited partner of the Partnership,
shall mean cash distributions on limited partnership interests held by such
limited partner.
     13. Governing Law. This Plan and the Participants’ election to participate
in the Plan shall be governed by the laws of the State of Maryland.
     14. Notice. Any notice or other communication required or permitted to be
given by any provision of this Plan shall be in writing and, if to the
Administrator, addressed to Cole Credit Property Trust II Investor Services
Department, 2575 East Camelback Road, Suite 500, Phoenix, Arizona 85016, or such
other address as may be specified by the Administrator by written notice to all
Participants. Notices to a Participant may be given by letter addressed to the
Participant at the Participant’s last address of record with the Administrator
or by filing such notice with the SEC as part of a current report to
stockholders on Form 8-K. Each Participant shall notify the Administrator
promptly in writing of any changes of address.