Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 19

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 19
---
 us, the interest of the charitable
beneficiary in the shares sold terminates, and the charitable trustee must distribute the net proceeds of the sale to the prohibited
owner.

Within 20 days of receiving notice from us of
the transfer of the shares to the charitable trust, the charitable trustee will sell the shares to a person or entity designated by the
charitable trustee who could own the shares without violating the ownership limits or the other restrictions on ownership and transfer
of our stock described above. After that, the charitable trustee must distribute to the prohibited owner an amount equal to the lesser
of (1) the price paid by the prohibited owner for the shares in the transaction that resulted in the 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 at market price,
the market price per share of such stock on the day of the event that resulted in the transfer to the charitable trust) and (2) the
sales proceeds (net of commissions and other expenses of sale) received by the charitable trust for the shares. The charitable trustee
may reduce the amount payable to the prohibited owner 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. Any net sales proceeds in excess of the amount payable
to the prohibited owner will be immediately paid to the charitable beneficiary, together with any dividends and other distributions thereon.
In addition, if, prior to discovery by us that shares of stock have been transferred to a charitable trust, such shares of stock are
sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the charitable trust and to the extent that
the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled
to receive, such excess amount will be paid to the charitable trust upon demand by the charitable trustee. The prohibited owner will
have no rights in the shares held by the charitable trust.

The charitable trustee will be designated by
us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the charitable trust, the charitable
trustee will receive, in trust for the charitable beneficiary, all distributions made by us with respect to such shares and may also
exercise all voting rights with respect to such shares. Any dividend or other distribution paid prior to our discovery that shares of
stock have been transferred to the charitable