On January 24, 2017, Capital Properties, Inc. (the “Company”)
and its two wholly-owned subsidiaries, Capital Terminal Company
(“CTC”) and Dunellen, LLC (“Dunellen”, and together with the
Company and CTC, the “Sellers”) entered into an Asset Purchase
Agreement (the “Purchase Agreement”) with Sprague Operating
Resources LLC (“Sprague”), a subsidiary of Sprague Resources
LP, to sell Sprague the Company’s East Providence, Rhode Island
petroleum storage terminal, Wilkesbarre Pier and related terminal
assets (the “Purchased Assets”). Capitalized terms used but not
otherwise defined herein have the meanings set forth in the
Purchase Agreement.

The aggregate purchase price for the Purchased Assets will be
Twenty-Three Million Dollars ($23,000,000) plus the assumption of
the Assumed Liabilities. The purchase price is subject to
adjustment to the terms of the Purchase Agreement.

Each of the parties has agreed to certain customary
representations, warranties and covenants in the Purchase
Agreement. The consummation of the transaction is subject to the
satisfaction or waiver of customary conditions, as set forth in
the Purchase Agreement, including, among other things, receipt of
third party and any applicable regulatory approvals. Approval of
the Company’s shareholders is not required in connection with
the transaction.

The terminal’s combined distillate storage capacity of just over
1 million barrels has been leased exclusively by Sprague since
May 1, 2014. Sellers have agreed to operate their businesses in
the ordinary course consistent with past practice until the
Closing. CTC and Dunellen have also agreed to not solicit or
initiate any additional, discussions with third parties regarding
other proposals to acquire the Purchased Assets, and to certain
restrictions on its ability to respond to such proposals. Each
party’s obligation to consummate the sale of the Purchased
Assets is subject to certain other conditions, including the
accuracy of the representations and warranties of the other party
and compliance of the other party with its covenants in all
material respects.

The Purchase Agreement may be terminated at any time prior to the
Closing under a number of conditions that include, but are not
limited to, the following: (i) by mutual written agreement of the
parties; (ii) by Sprague if there is an event or condition that
results in a Material Adverse Effect, Sellers’ representations
and warranties, subject to certain materiality qualifiers, were
not true and correct when made, Sellers have not performed or
complied with the covenants or agreements to be performed or
complied with by Sellers, or certain bankruptcy-type events occur
with respect to Sellers; (iii) by Sellers if Sprague’s
representations and warranties, subject to certain materiality
qualifiers, were not true and correct when made, Sprague has not
performed or complied with the covenants or agreements to be
performed or complied with by Sprague, or certain bankruptcy-type
events occur with respect to Sprague; (iv) by either party if the
Closing has not occurred before January 31, 2017, provided
however, this termination right is not available to any party
whose failure to comply with the Purchase Agreement was the cause
of, or resulted in, the failure of the Closing to occur on or
before such date; (v) by either party if the transactions
contemplated by the Purchase Agreement become illegal or are
prohibited by law; (vi) assuming certain conditions to Closing
have been satisfied, by either Sprague or Sellers if the other
party fails to consummate the transactions contemplated by the
Purchase Agreement in accordance with Section 2.05 thereof; or
(vii) by Sprague to the terms of Section 5.04(b) thereof.

The parties contemplate the Closing to occur on or about January
31, 2017.

A copy of the Purchase Agreement is attached hereto as Exhibit
2.1 and a copy of the press release of the Company regarding the
Purchase Agreement is attached hereto as Exhibit 99.1. Each of
the foregoing exhibits is incorporated herein by reference. The
description of the Purchase Agreement contained in this Current
Report on Form 8-K is qualified in its entirety by reference to
the full text of the Purchase Agreement.

The foregoing description of the Purchase Agreement is included
to provide you with information regarding its terms. The
representations, warranties and covenants contained in the
Purchase Agreement were made as of specific dates and solely for
purposes of the contract between Sprague and the Sellers and are
not intended to provide factual, business, or financial
information about Sprague and the Sellers. Moreover, some of
those representations and warranties may not be accurate or
complete as of any specified date, may be subject to a
contractual standard of materiality different from those
generally applicable to shareholders or different from what a
shareholder might view as material, may have been used for
purposes of allocating risk between Sprague and the Sellers
rather than establishing matters as facts, may have been
qualified by certain disclosures not reflected in the Purchase
Agreement that were made to the other party in connection with
the negotiation of the Purchase Agreement and generally were
solely for the benefit of the parties to that agreement.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

* to Item 601(b)(2) of Regulation S-K promulgated by the SEC,
certain schedules to the Asset Purchase Agreement have been
omitted. The registrant hereby agrees to furnish supplementally
to the SEC, upon its request, any or all omitted schedules.

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

	CAPITAL PROPERTIES, INC.
Date: January 25, 2017	By:	/s/ Stephen J. Carlotti
		Stephen J. Carlotti
		Secretary

EXHIBIT INDEX

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