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Interest in Cognitive Radio (CR) remains strong as the communications community strives to solve the spectrum congestion problem. In conventional CR implementations, interference to primary users is minimized using either overlay waveforms that exploit unused (white) spectrum holes or underlay waveforms that spread their power spectrum density over an ultra-wide bandwidth. In Part I, we proposed a novel hybrid overlay/underlay waveform that realizes benefits of both waveforms and demonstrated its performance in an AWGN channel. This was done by extending the original Spectrally Modulated Spectrally Encoded (SMSE) framework to enable soft decision CR implementations that exploit both unused (white) and underused (gray) spectral areas. In Part II, we analyze and evaluate performance of the proposed hybrid overlay/underlay waveform in frequency selective fading channels. A simulated performance analysis of overlay, underlay and hybrid overlay/ underlay waveforms in frequency selective fading channels is presented and benefits discussed.