Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 18

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 18
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 or otherwise failing to qualify as a REIT,                                                       |

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then that number of shares (rounded up to
the nearest whole share) that would cause us to violate such restrictions will automatically be transferred to, and held by, a charitable
trust for the exclusive benefit of one or more charitable organizations selected by us, and the intended transferee will acquire no rights
in such shares. The transfer will be deemed to be effective as of the close of business on the business day prior to the date of the
transfer in violation of the ownership limit or other event that results in the transfer to the charitable trust. A person who, but for
the transfer of the shares to the charitable trust, would have beneficially or constructively owned the shares so transferred, or a “prohibited
owner,” which, if appropriate in the context, also means any person who would have been the record owner of the shares that the
prohibited owner would have so owned. If the transfer to the charitable trust as described above would not be effective, for any reason,
to prevent violation of the applicable restriction on ownership and transfer contained in our charter, then our charter provides that
the transfer of the shares will be void from the time of such purported transfer.

Shares of stock transferred to a charitable trust
are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price paid per share
in the transaction that resulted in such transfer to the charitable trust (or, if the event that resulted in the transfer to the charitable
trust did not involve a purchase of such shares of stock at market price, defined generally as the last reported sales price reported
on the NYSE (or other applicable exchange), the market price per share of such stock on the day of the event which resulted in the transfer
of such shares of stock to the charitable trust) and (2) the market price on the date we, or our designee, accept such offer. We
may reduce the amount payable to the charitable trust by the amount of dividends and other distributions which have been paid to the
prohibited owner and are owed by the prohibited owner to the charitable trust as described below. We may pay the amount of such reduction
to the charitable trust for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee of the
charitable trust has sold the shares held in the charitable trust as discussed below.

Upon a sale to