ROLLOVER LOAN AGREEMENT
 USD 27,000,000
     
    Adventure Two S.A.
Adventure Three S.A.
Adventure Seven S.A.
     
    HOLLANDSCHE BANK-UNIE N.V.




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Article
    
    Page1.
    
    
    
    DEFINITIONS
    
    
    32.
    
    
    
    AVAILABILITY/DRAWING
    
    
    43.
    
    
    
    INTEREST PERIODS
    
    
    44.
    
    
    
    INTEREST
    
    
    45.
    
    
    
    ALTERNATIVE INTEREST RATE
    
    
    56.
    
    
    
    FEES
    
    
    57.
    
    
    
    REPAYMENT
    
    
    68.
    
    
    
    PAYMENT
    
    
    69.
    
    
    
    COSTS AND EXPENSES
    
    
    710.
    
    
    
    SECURITY AND UNDERTAKINGS
    
    
    711.
    
    
    
    JOINT AND SEVERAL LIABILITY
    
    
    812.
    
    
    
    PROHIBITION AGAINST TRANSFER OR PLEDGE
    
    
    913.
    
    
    
    INSURANCE
    
    
    914.
    
    
    
    RESTRUCTURING CLAUSE
    
    
    915.
    
    
    
    ANNUAL ACCOUNTS AND OTHER INFORMATION
    
    
    916.
    
    
    
    EVENTS OF DEFAULT
    
    
    1017.
    
    
    
    DEFAULT INTEREST
    
    
    1218.
    
    
    
    COMMUNICATIONS
    
    
    1219.
    
    
    
    GENERAL BANKING CONDITIONS
    
    
    1220.
    
    
    
    OTHER PROVISIONS
    
    
    1321.
    
    
    
    REPRESENTATIONS AND WARRANTIES
    
    
    1322.
    
    
    
    ENGLISH LEGAL TERMINOLOGY
    
    
    14APPENDIX A
 FINANCIAL DEFINITIONS
    
    
    16
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This agreement is made between:
 1.
    
    Adventure Two S.A., established in Majuro, Marshall Islands,
Adventure Three S.A., established in Majuro, Marshall Islands,
Adventure Seven S.A., established in Majuro, Marshall Islands,
hereinafter (together and individually) referred to as the Borrower,
  2.
    
    HOLLANDSCHE BANK-UNIE N.V., having its registered office in Rotterdam, the Netherlands,
hereinafter referred to as HBU.
 Whereas:
 
    
    HBU has offered by credit agreement dated 21st January 2008
(the Credit Agreement) to grant the Borrower a rollover loan in the
sum of USD 27,000,000 (the Loan) for the financing of the purchase
of the m.v. African Protea t.b.r. Free Knight, subject to the main
details, terms and conditions specified in the above-mentioned credit
agreement and the execution of a definitive agreement between HBU and
the Borrower;
    
    HBU and the Borrower wish to record the terms, conditions and other
details applicable to the Loan.
 It is hereby agreed as follows:
 DEFINITIONS
  Availability Period:
    
    means the period commencing on the date this
agreement is duly signed by all parties and ending on
1st April 2008; during this period the
Borrower may request HBU to make available the amount
of the Loan;Business Day:
    
    means a day other than a Saturday or a Sunday on
which banks are generally open for business in the
Netherlands, London and New York;Interest Period:
    
    means a period of three, six or, subject to HBUs
approval, twelve months as the Borrower may select or
any other period for which an interest rate is
required to be determined under the terms of this
agreement;LIBOR:
    
    means the percentage rate per annum published on the
Telerate Screen page displaying the British
Bankers Association Settlement Rate for term
deposits in USD for a period equal to the relevant
Interest Period at or about 11.00 a.m. (London Time)
two Business Days prior to the commencement of the
relevant Interest Period or, if such page or service
ceases to be available, any other such page or
service displaying the British Bankers Association
Settlement Rate for term deposits in USD as HBU
shall designate following consultation with the
Borrower;Loan Period:
    
    means the period commencing on the date of the amount
of the Loan being made available to the Borrower
under this agreement and ending not later than
1st January 2016, during which period HBU
agrees to lend the amount
of the Loan to the Borrower on the terms and conditions specified in
this agreement.Loan to Value Ratio:
    
    means the total outstanding facilities of the borrower on account of the
Credit Agreement, as the same may be amended from time to time, divided by actual total
valuation results of the vessels referred to in section a of Article 10.
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ARTICLE 2 AVAILABILITY/DRAWING
 st
 ARTICLE 3 INTEREST PERIODS
 a.
    
    The Loan Period shall comprise a series of successive Interest Periods. The first Interest
Period shall start on the day on which the amount of the Loan is made available to the
Borrower under this agreement, and each subsequent Interest Period shall commence on the final
day of the preceding Interest Period.b.
    
    The Borrower shall notify HBU of the selected duration of any subsequent Interest Period not
later than three Business Days prior to the first day of the subsequent Interest Period.
Failing such notification, the duration of the Interest Period shall be the same as the
immediately preceding Interest Period, except in the case of an Interest Period of twelve
months, in which event the duration of the subsequent Interest Period shall be one month.c.
    
    The notification referred to in section b. of this Article, which shall be irrevocable, can
be given by fax, by telephone or in writing. In the case of notification by fax or telephone,
HBU shall be entitled to require written confirmation from the Borrower before setting the
interest rate for the relevant Interest Period or, with respect to the first Interest Period,
before making the amount of the Loan available to the Borrower.d.
    
    If an Interest Period selected by the Borrower commences before the due date of an instalment
of the Loan as referred to in Article 7, section a. and ends after that due date, the Borrower
shall also select a separate Interest Period ending on that due date for the part of the Loan
equal to such instalment. If the Borrower fails to do this, the Borrower shall be deemed to
have selected a separate Interest Period as referred to in the preceding sentence.
 ARTICLE 4 INTEREST
 a.
    
    The Borrower shall pay HBU interest on the drawn and non-repaid portion of the Loan at
a rate equal to LIBOR for the relevant Interest Period increased by an individual margin
of 1.3% per annum. HBU shall revise the individual margin on 1st February
2013 or, if such day does not coincide with the final day of an Interest Period, on the
final day of the said Interest Period.b.
    
    HBU shall inform the Borrower in writing at least ten Business Days before the agreed
revision date of the individual margin it proposes for the subsequent period. If HBU and
the Borrower fail to reach agreement at least five Business Days before the revision
date, the Borrower shall be obliged to repay on the said revision date all amounts owing
to HBU under this agreement. The Borrower shall not be liable in this event to pay
compensation as referred to in section b.(iv) of Article 7.
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c.
    
    If the Borrower fails to respond in writing to HBUs notification at least five
Business Days before the revision date as referred to in section b. of this Article, the
Borrower shall be deemed to have agreed to the individual margin proposed by HBU.d.
    
    If HBU fails to give timely notice as referred to in section b. of this Article, it
shall remain entitled to do so at a later date. If HBU and the Borrower subsequently
agree on the individual margin, this shall come into effect as of the first day of the
Interest Period following the current Interest Period. If HBU and the Borrower fail to
reach agreement within five Business Days of the date of the written notification
referred to above, the Borrower shall be obliged to repay on the final day of the
current Interest Period all amounts owed to HBU under this agreement. In this event no
compensation as referred to in section b.(iv) of Article 7 shall be payable by the
Borrower.e.
    
    Interest shall be calculated on the basis of the actual number of days elapsed and a
360-day year.f.
    
    Interest computed by HBU shall, save for any manifest error, be binding on the
Borrower. HBU shall notify the Borrower in writing of the amount of interest computed.g.
    
    Interest in respect of each Interest Period shall be paid on the final day of the
relevant Interest Period. In the case of an Interest Period of longer than three months,
interest shall also be payable three-monthly in arrear throughout the Interest Period.
 ARTICLE 5 ALTERNATIVE INTEREST RATE
 a.
    
    If HBU establishes at any time prior to the commencement of an Interest Period that
circumstances affecting the interbank money market are such that the interest rate for that
Interest Period cannot in all reasonableness be determined on the basis of LIBOR, HBU shall
notify the Borrower of this immediately.b.
    
    HBU and the Borrower shall then enter into negotiations in order to agree an interest rate
for the relevant Interest Period. In the absence of agreement prior to the commencement of the
relevant Interest Period, the Interest Period shall be deemed to be one month and HBU shall
set the interest rate on the basis of the cost to HBU of funding the Loan, plus the individual
margin then applicable pursuant to Article 4.c.
    
    In the absence of agreement, the Borrower may repay the Loan early in full on the final day
of the Interest Period, provided the Borrower notifies HBU in writing of this within ten
Business Days after HBU has set the interest rate. Such notification shall be irrevocable. The
Borrower shall not be liable to pay compensation as referred to in Article 7, section b. (iv)
with respect to this early repayment
 ARTICLE 6 FEES
  (i)
    
    an upfront fee of 0.60 % of the Loan, which the Borrower shall pay to HBU on the
date of this agreement being duly signed by all parties;(ii)
    
    a commitment fee of 0.65% per annum over the average undrawn part of the Loan from
the first full calendar month after the date of this agreement being duly signed by all
parties until the Loan has been drawn, payable on the final day of the Availability
Period.
 b.
    
    Commitment fee shall be calculated on the basis of a 360-day year and the actual number of
days in any month.c.
    
    HBUs calculation of commitment fee shall, save for any manifest error, be binding on the
Borrower.
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ARTICLE 7 REPAYMENT
 a.
    
    The Borrower shall repay the Loan to HBU in 31 (thirty one) successive three-monthly
instalments as follows:
 
    
    4 (four) instalments of USD 1,750,000;
    
    26 (twenty six) instalments of USD 750,000;
    
    1 (one) final instalment of USD 500,000.
 The first instalment being due three months after the Loan has been drawn, at the latest on
1st July 2008.b.
    
    The Borrower shall be entitled to make early repayments on the Loan provided the following
conditions have been met:
 (i)
    
    the Borrower has given HBU at least one months prior notice by registered letter,
indicating the amount and date of the intended early repayment; and(ii)
    
    the early repayment coincides with the final day of an Interest Period; and(iii)
    
    the prepaid amount is, if the Loan is not being repaid in full, USD 500,000 or a
multiple thereof; and(iv)
    
    together with the early repayment, the Borrower pays HBU compensation equal to
0.375% of the prepaid amount. This percentage will be reduced to 0.25% two years after
the date on which this agreement has been duly signed by all the parties.
 c.
    
    In case of sale of the m.v. Free Envoy or the m.v. Free Destiny the Borrower shall make
an additional repayment of USD 2,000,000 without prejudice to the provisions contained in
section b. (i) and (ii) of this Article. In this event no compensation as referred to in
section b.(iv) of this Article shall be payable by the Borrower.d.
    
    Upon giving notice of an intended early repayment referred to in section b.(i) and/or in
section c of this Article, the Borrower shall be obliged to make such early repayment. Early
repayments shall be applied in reduction of the contractual repayments referred to in section
a. of this Article in reverse order of their due dates.
 ARTICLE 8 PAYMENT
 a.
    
    The Borrower shall make all payments to HBU without any cost to HBU and without any deduction
or set-off. Payments shall be made on the due dates at the HBU branch where the Loan is
administered, unless HBU has notified the Borrower of another address for payment.b.
    
    HBU shall be entitled, but not obliged, to debit all amounts payable by the Borrower to HBU
under the Loan from the Borrowers current account at HBU on the agreed due dates, without
prejudice to the Borrowers obligation to ensure that the balance of that account on the due
date is such that this debit does not exceed the amount available for payments and withdrawals
from that account.c.
    
    Payments shall be applied as follows: (i) any costs and expenses; (ii) any compensation for
losses and foregone profits (geleden verlies en gederfde winst)and default interest (iii)
interest and fees, and finally (iv) principal.d.
    
    If any sum becomes due on a day which is not a Business Day, such payment shall be due on the
next succeeding Business Day, unless that Business Day falls in a different calendar month, in
which case payment shall be due on the immediately preceding Business Day, with the amount of
interest and duration of the relevant Interest Period being adjusted accordingly.
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ARTICLE 9 COSTS AND EXPENSES
 a.
    
    All costs and expenses incurred by HBU in connection with the performance of this agreement,
including any taxes payable by HBU (other than on net profit), as well as any reasonable costs
and expenses incurred by HBU in connection with the Borrowers failure to comply with or
fulfil any obligation under this agreement at the time and in the manner required, including
collection charges, fees of legal advisers and other experts and the costs of proceedings,
irrespective of to whom owed, shall be for the account of the Borrower and shall be paid by
the Borrower on HBUs first demand.b.
    
    Provided more than three months have elapsed since the signing of this agreement, HBU shall
have the right to refix the agreed interest rate if the cost to HBU of making available, or
continuing to make available, the Loan has increased and this increase results directly or
indirectly from credit-restricting measures (kredietbeperkende maatregelen), solvency
guidelines or other rules or provisions increasing costs (including lines of conduct the
observance of which has been requested) of the Dutch Central Bank (De Nederlandsche Bank), the
European Central Bank or any other authority, monetary or otherwise.
 SECURITY AND UNDERTAKINGS
 a.
    
    The following security and undertakings (verklaringen)have been or will be provided to
secure any and all present or future indebtedness of the Borrower to HBU on account of the
Loan or on any other basis whatsoever (including indebtedness arising from derivative
transactions), whether or not arising in the ordinary course of banking business:
 
    
    First preferred mortgage on the vessel m.v. Free Destiny, registered
under the flag of the Marshall Islands. IMO number 8128157, call
letters V7GD9. Fuller details are included in the mortgage deed. On
this mortgage the laws of the Marshall Islands is applicable.
    
    Second preferred mortgage on the vessel m.v. Free Destiny,
registered under the flag of the Marshall Islands. IMO number 8128157,
call letters V7GD9. Fuller details are included in the mortgage deed.
On this mortgage the laws of the Marshall Islands is applicable.
    
    First preferred mortgage of USD 6,000,000 plus 40% for cost and
interest on the m.v. Free Envoy, registered under the flag of the
Marshall Islands. Official number 2161, call letters V7GR6. Fuller
details are included in the mortgage deed. On this mortgage the laws
of the Marshall Islands is applicable.
    
    Second preferred mortgage on the m.v. Free Envoy, registered under
the flag of the Marshall Islands. Official number 2161, call letters
V7GR6. Fuller details are included in the mortgage deed. On this
mortgage the laws of the Marshall Islands is applicable.
    
    First preferred mortgage of USD 38,500,000 plus 40% for cost and
interest on the m.v. African Protea t.b.r. Free Knight, registered
under the flag of the Common wealth of the Bahamas. Official number
9300831`, call letters VRCC3. Fuller details are included in the
mortgage deed. On this mortgage the laws of the Marshall Islands is
applicable.
    
    Independent corporate guarantee of USD 34,600,000 plus costs and
interest, from FreeSeas Inc, established in Majuro, Marshall Islands.
    
    First pledge of rights and earnings under the time charter contracts
in respect of the m.v. Free Destiny, m.v. Free Envoy and the m.v.
African Protea t.b.r. Free Knight.
 -7-




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
    
    First pledge of rights under insurance policies covering at least Hull
and Machinery, Protection & Indemnity (P&I) in respect of the m.v.
Free Destiny, m.v. Free Envoy and the m.v. African Protea t.b.r.
Free Knight.
 b.
    
    To the extent the Borrower is not already obliged to do so on any other basis, the Borrower
hereby further undertakes to provide HBU a right of pledge on all assets referred to in
Article 18 of the General Banking Conditions of HBU as security as stated in section a of this
Article. In order to effectuate the above, the Borrower hereby pledges to HBU, to the extent not
already pledged to HBU in accordance with Article 18 of the General Banking Conditions of
HBU, the present and future debts owing  as regards future debts, the pledge being made in
advance  by HBU to the Borrower as security as stated above. The Borrower hereby grants HBU
a power of attorney to pledge these debts, at any time and repeatedly, to itself on behalf of
the Borrower. This power of attorney is unconditional and
irrevocable.
HBU hereby accepts the above right of pledge. This agreement constitutes a notice of this
pledge to HBU.c.
    
    If a right of mortgage is given, it shall be subject to the General Terms and Conditions for
Mortgages (Algemene Bepalingen voor Hypotheekstelling)in addition to the provisions contained
in the mortgage deed, as far as the General Terms and Conditions for Mortgages do not
contravene the laws of Panama and/or Malta. A right of mortgage on multiple registered
properties (registergoederen) shall be created by means of separate rights of mortgage on each
property individually, in each case for the full principal amount plus interest and costs.d.
    
    The Borrower agrees that if third parties have provided security or undertakings
(verklaringen), HBU may furnish such third parties with information about the Borrowers
financial position and any other information relating to the Loan that may be of importance to
such third parties.e.
    
    As long as the Borrower owes HBU any sum whatsoever (including indebtedness arising from
derivative transactions), or may in any manner become indebted to HBU as a result of present
or future obligations, the Borrower shall not transfer, or promise to transfer, title to all
or any of its assets  except transfers in the ordinary course of business  or charge or
encumber, or promise to charge or encumber, all or any of its assets in favour of a third
party unless it has obtained HBUs prior written consent.f.
    
    Without prejudice to the provisions of Article 20 of the General Banking Conditions (Algemene
Voorwaarden HOLLANDSCHE BANK-UNIE N.V.), the Borrower undertakes to ensure, at HBUs first
request, that security or additional security is provided, in the form and amount desired by
HBU, for the performance of any and all present or future obligations of the Borrower to HBU
on any basis whatsoever (including indebtedness arising from derivative transactions), whether
or not arising in the ordinary course of banking business.g.
    
    Security and undertakings (verklaringen)shall be documented using agreements to be
determined by HBU. Any costs involved shall be for the Borrowers account.
 JOINT AND SEVERAL LIABILITY
 a.
    
    Each of the parties referred to as Borrower shall irrevocably be jointly and severally liable
to HBU for all present or future indebtedness of any or all of them to HBU on account of the
Loan or on any other basis whatsoever (including indebtedness arising from derivative
transactions), whether or not arising in the ordinary course of banking business.b.
    
    The Borrower waives as against HBU all defences and rights accruing to debtors with joint and
several liability or to sureties (borg).
 -8-




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c.
    
    Each of the parties referred to as Borrower hereby undertakes to grant HBU a right of pledge
on the rights of recourse and the subrogated rights arising pursuant to the joint and several
liability referred to in section a of this Article to secure all present and future
indebtedness of the Borrower to HBU on account of the Loan or on any other basis whatsoever
(including indebtedness arising from derivative transactions), whether or not arising in the
ordinary course of banking business.In order to effectuate the above, the Borrower hereby pledges to HBU a right of pledge on the
rights of recourse rights arising pursuant to the joint and several liability referred to in
section a of this Article as security as stated above.If the Borrower is subrogated to the rights of HBU, HBU reserves a pledge on the subrogated
rights as security as stated above.HBU hereby accepts the above rights of pledge. This agreement constitutes a notice of these
pledges to the other parties referred to as the Borrower and to HBU.d.
    
    To the extent that a Borrowers rights of recourse or subrogated rights against any of the
other parties referred to as Borrower are not subject to a right of pledge as described above,
such rights shall be subordinated to all present or future rights of HBU against any of the
other parties referred to as Borrower. For that situation, each Borrower waives its right to
subrogation in respect of any security attached to the rights of HBU against any of the other
parties referred to as Borrower.e.
    
    Subject to the condition precedent that a Borrower is being sold to a third party in
connection with a restructuring (ontvlechting), each Borrower waives its rights of recourse or
subrogated rights against that Borrower.
 ARTICLE 12 PROHIBITION AGAINST TRANSFER OR PLEDGE
  ARTICLE 13 INSURANCE
  ARTICLE 14 RESTRUCTURING CLAUSE
  ARTICLE 15 ANNUAL ACCOUNTS AND OTHER INFORMATION
 a.
    
    The Borrower shall send HBU its balance sheet, profit and loss account and notes thereto for
the past financial year immediately after they have been drawn up but in any event not later
than six months after the end of the relevant financial year, accompanied by an unqualified
auditors statement(goedkeurende accountantsverklaringdrawn up by a registered accountant
acceptable to HBU.b.
    
    The Borrower shall send HBU the Annual Accounts as defined in Appendix A not later than six
months after the end of the relevant financial year, and the Quarterly Accounts as defined in
Appendix A not later than 45 days after the end of every quarter.
 -9-




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c.
    
    The Borrower shall allow HBU to inspect its books and records on HBUs first demand, and
shall provide HBU, both on its first demand and unsolicited, with any information about its
financial position and business developments that could have a material effect thereon.
 ARTICLE 16 EVENTS OF DEFAULT
 a.
    
    HBU may declare the outstanding principal amount of the Loan, together with accrued interest
and any other amount payable by the Borrower under this agreement, immediately due and payable
to HBU, in full and without any demand or default notice being required:
 (i)
    
    if the Borrower fails to comply with or fulfil, at the time and in the manner
required, any obligation towards HBU, whether arising under this agreement or otherwise;(ii)
    
    if the Borrower fails to comply with or fulfil, at the time and in the manner
required, any obligation under any other loan or financing arrangement with or any
guarantee given to a third party;(iii)
    
    if the Borrower decides to cease carrying on its business, to discontinue, sell,
let or transfer title to the whole or part of its business; if a licence, permit or
registration which the Borrower requires in order to carry on its business expires or is
refused or withdrawn; if the nature of the Borrowers business is, in the opinion of HBU,
changed in a material way; if the Borrower decides to transfer abroad the running of its
business; if the Borrower violates any laws or regulations, environmental or otherwise,
relating to its business; if the Borrower ceases to pursue the corporate objects set out
in the Borrowers articles of association or ceases to have legal personality;(iv)
    
    if the Borrower applies for a suspension of payments (surseance van betaling);
files a bankruptcy or winding-up petition (faillissement); is adjudicated bankrupt or
wound-up; proposes an extrajudicial arrangement or composition (akkoord) with its
creditors; while insolvent, transfers any of its assets to its creditors (boedelafstand);(v)
    
    if all or, in the opinion of HBU, a significant part of the Borrowers assets are
taken in execution (executorial beslag) or attached by way of security (conservatoir
beslag) and such attachment is not lifted or discharged within 30 days after having been
effected; if all or, in the opinion of HBU, a significant part of the Borrowers assets
are expropriated, confiscated, lost or damaged;(vi)
    
    if the Borrowers corporate structure is, in the opinion of HBU, changed
significantly, by a merger (fusie), demerger (splitsing), winding up (liquidatie),
conversion, takeover or otherwise; if, in the opinion of HBU, a significant change has
taken place in the control of the Borrowers business or practice; if there is an
intention to make any of the above changes; or if the Borrowers articles of association
or internal rules or regulations are, in the opinion of HBU, amended to a significant
extent;(vii)
    
    if the Borrower, without HBUs prior written consent, releases its shareholders
from an obligation to pay up partly paid-up shares, purchases its own shares, makes a
repayment on shares, makes a distribution from its reserves or decides or has the obvious
intention to do any of the above;(viii)
    
    if an event of a political, military, economic or financial nature occurs, or if the
Borrowers financial position substantially deteriorates, or if it foreseeable that such
an event or deterioration could occur, such that, in the opinion of HBU, the ability of
the Borrower to fulfil its obligations towards HBU at the time and in the manner required
could be prejudiced;
 -10-




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(ix)
    
    if any event referred to in (ii) up to and including (viii) occurs in respect of a
surety (borg), a guarantor (garant), jointly and severally liable debtor or a third party
that has provided HBU with any other type of security for the Loan; if the surety (borg)
or guarantor (garant)cancels or withdraws a suretyship (borgtocht)or guarantee issued
by it to HBU for the Borrower; if a third party that has provided or has promised to
provide HBU with security for the Loan defaults in the performance of any obligation in
respect of the security provided or promised;(x)
    
    if any event referred to in (ii) up to and including (viii) occurs in respect of
one or more enterprises or companies that are included in the Borrowers consolidated
balance sheet, or in respect of one or more enterprises or companies that have a
controlling interest in the Borrower, or if any such enterprise or company defaults in
the performance of any obligation towards HBU in connection with credit and/or guarantee
facilities granted by HBU;(xi)
    
    (in the case of a mortgage on a ship) if the whole or any part of a mortgaged ship
is attached or executed upon, is classified in a lower category, loses its national
registration or changes the same, or is requisitioned, abandoned, missing
(tijdingloosheid), laid up (oplegging), broken up (sloping), wrecked or damaged;(xii)
    
    if all or any of the assets provided to HBU as security for the Loan other than
those referred to in (xi) are lost, destroyed, damaged or extinguished, or if they
expire, for any reason whatsoever;(xiii)
    
    if, in the opinion of HBU, the Interest Coverage Ratio, as defined in Appendix A of
this agreement, is less than 2.5 as from the end of 2008;(xiv)
    
    if, in the opinion of HBU, the Debt Service Cover Ratio, as defined in Appendix A
of this agreement, is less than 1.1 as from the end of 2008;(xv)
    
    if, in the opinion of HBU, the Gearing, as defined in Appendix A of this agreement,
is more than 2.5 as from the end of 2008;(xvi)
    
    if, in the opinion of HBU, the Loan to Value Ratio is more than 60%;(xvii)
    
    if the Borrower has given HBU incorrect information or has withheld information that is
material to HBU in connection with this agreement;(xviii)
    
    if the Loan is not used for the purpose for which it was granted, or if, in the
opinion of HBU, it is clear that the purpose for which the Loan was granted has not been
achieved or will not be achieved, either wholly or to a significant extent;(xix)
    
    if any law or its interpretation is changed or governmental action is taken, as a
result of which this agreement and/or the security provided and/or the value thereof is
or may be affected, and the Borrower and HBU have not, within a reasonable period to be
determined by HBU, reached a written agreement amending the relevant provisions and/or
adjusting the security in such a way that, in the opinion of HBU, the position of HBU is
not adversely affected.
 b.
    
    The Borrower shall notify HBU immediately of the occurrence of one or more of the events set
out in section a. of this Article in (ii) up to and including (xvi).c.
    
    If HBU declares the Loan immediately due and payable pursuant to the provisions of section a.
of this Article, the Borrower shall be liable to pay HBU compensation for its losses and
foregone profits (geleden verlies en gederfde winst). This compensation shall be fixed by HBU
at the difference between:
 (i)
    
    the aggregate of the present values of the interest payments which, pursuant to
this agreement, HBU would have received in respect of the amount declared immediately
due and payable from
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the date of that declaration until the final day of the relevant Interest Period, had
such amount not been declared immediately due and payable, and(ii)
    
    the aggregate of the present values of the interest payments which HBU would be
able to receive on interbank loans for an amount comparable to the amount declared
immediately due and payable and for a period comparable to the period referred to in
(i) above.
 Such compensation shall in any event not be less than 1% of the amount declared immediately
due and payable. Present values shall be calculated at the interbank rate applicable on the
date of the early repayment.
 ARTICLE 17 DEFAULT INTEREST
 a.
    
    If HBU does not receive any sum due to it under this agreement on the agreed due date, the
Borrower shall be liable to pay HBU default interest, due and payable daily, on the overdue
amount as from the due date, without prejudice to HBUs other rights. If no specific due date
has been stipulated in this agreement in relation to a particular amount, this amount shall,
for the purpose of the above provisions, be due on the day stipulated by HBU for payment.
 b.
    
    The applicable rate of default interest, which shall be determined on
each day a payment is overdue, shall be equal to 2.5% per annum above
the contractual interest rate (including the applicable individual
margin) if and for as long as the contractual interest rate is
applicable, and 2.5% per annum above the tom/next (tomorrow/next day)
rate (plus the individual margin referred to above) fixed by HBU for
the US Dollar in all other cases. With respect to an overdue payment
of principal, the default interest rate shall, as from the due date of
that payment, replace the contractual interest then applicable.
 ARTICLE 18 COMMUNICATIONS
 a.
    
    All notices and communications regarding this agreement shall, unless otherwise stated in
this agreement, be given or made in writing or by fax, and shall be directed to the following
addresses:
 for the Borrower:
    
    Adventure Two S.A.
c/o FreeSeas Inc.
89 Akti Miaouli & 4 Gr Mavrokordatou Street
18538 Piraeus
Greece
fax: 00-30-21044291100for HBU:
    
    HOLLANDSCHE BANK-UNIE N.V.
Dept. Accountmanagement Corporates
Attn. Mr. L. Bloemheuvel
Coolsingel 104
P.O. Box 249
3000 AE Rotterdam
The Netherlands
fax: 31 10 2820149
 b.
    
    Changes of address shall only become effective once they have been notified in writing to the
other party.
 ARTICLE 19 GENERAL BANKING CONDITIONS
 (Algemene Voorwaarden HBU Bank N.V.) (Algemene Voorwaarden HBU Bank N.V.)
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ARTICLE 20 OTHER PROVISIONS
 (i)
    
    The vessels referred to in section a of Article 10 will be safely operated and maintained,
and will in any case always be classified in a category acceptable to HBU;(ii)
    
    The Borrower will give HBU the time charter contract(s) in respect of the vessels referred to
in section a of Article 10. The contents must be acceptable to HBU, such as a charter contract
for the time of at least one year at a rate of at least USD 25,000.(iii)
    
    The Borrower will submit once a year to HBU a valuation report of the vessels referred to in
section a of Article 10, issued by a valuer acceptable to HBU.
 ARTICLE 21 REPRESENTATIONS AND WARRANTIES
  a.
    
    the Borrower is a company duly incorporated and validly existing under its laws of
incorporation;b.
    
    the Borrower has power to enter into and perform this agreement and each of the security
documents to which it is a party and this agreement constitutes and each of the security
documents (when executed) to which it is a party will constitute legally binding
obligations of the Borrower enforceable in accordance with its respective terms, and the
Borrower has taken all necessary corporate or other action required to authorise the
execution and delivery of this agreement and each of the security documents to which it
is a party and its performance according to the respective terms thereof;c.
    
    it is not necessary to ensure the legality, validity, enforceability or admissibility in
evidence of this agreement or any of the security documents that any of them be filed,
recorded, registered or enrolled (except for the mortgages) with any governmental
authority or agency or that this agreement or any security document be stamped with any
stamp or similar transaction tax;d.
    
    no consents, licences, approvals or authorizations of or declarations to governmental
authorities and agencies are required to make this agreement and each of the security
documents valid, enforceable or admissible in evidence or to enable the Borrower to
perform its obligations hereunder and under each of the security documents to which it is
a party;e.
    
    the execution and delivery of this agreement and each of the security documents and
their performance according to their respective terms will not violate:
 i.
    
    the
memorandum or articles of association of the
Borrower;ii.
    
    any
law or regulation to which the Borrower is
subject;iii.
    
    any
encumbrance, deed or agreement which is binding
upon the Borrower or any of its assets;
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f.
    
    the Borrower is not in breach of or default under any encumbrance, deed or agreement
which is binding upon it or any of its assets where, in the opinion of the Bank, such
breach or default is material;g.
    
    no litigation or administrative proceeding of or before any court or governmental
authority or agency is pending or (to the Borrowers knowledge) threatened, the result of
which would or would be likely to have an adverse effect on the business, assets or
financial condition of the Borrower;h.
    
    no steps have been taken by the Borrower or by its shareholders or any court or
governmental agency nor have any legal proceedings been started or (to the best of the
Borrowers knowledge and belief) threatened for the dissolution, bankruptcy, winding-up,
liquidation or reorganisation (where, in the opinion of HBU, such re-organisation might
prejudice HBUs position hereunder or under any of the security documents) of the
Borrower or for the appointment of a receiver, trustee or similar officer of it or its
undertaking, or assets; andi.
    
    upon the execution and delivery thereof, this agreement and each of the security
documents will form valid and binding obligations of the Borrower enforceable in
accordance with their respective terms.
 ARTICLE 22 ENGLISH LEGAL TERMINOLOGY
   Signature:
 , 2008
    
    Rotterdam, 3 oktober 2008/s/ Ion G. Varouxakis
    
    /s/ IllegibleAdventure Two S.A.
    
    HOLLANDSCHE BANK-UNIE N.V., 2008/s/ Ion G. VarouxakisAdventure Three S.A., 2008/s/ Ion G. VarouxakisAdventure Seven S.A.
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APPENDIX A
 Definitions
 Adjusted Balance Sheet Total
 Annual Accounts
 Capital Expenditure
 Consolidated EBIT
 Consolidated EBITDA
 Consolidated Net Finance Charges
 excluding  including  including  deducting  deducting  excluding
 Consolidated Total Bank Debt
  excluding  including  less
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Consolidated Total Bank Debt/Consolidated EBITDA Ratio
 Debt Service Cover Ratio
 Excess Cash
 Financial Indebtedness
 
    
    any indebtedness for or in respect of indebtedness for borrowed money;
    
    any documentary credit facility;
    
    any treasury transaction or any other transaction entered into in connection
with protection against or benefit from fluctuation in any rate or price and the amount
of the financial indebtedness in relation to any such transaction shall be calculated
by reference to the marked-to-market valuation of such transaction at the relevant
time; and
    
    any guarantee, indemnity, bond, standby letter of credit or any other
instrument issued in connection
  Financial Year
 Free Operating Cash Flow
 adding:
 
    
    any decrease in the amount of Working Capital;
    
    any cash receipt in respect of any exceptional or extraordinary item
(including, without limitation, the proceeds of the sale of any assets other than
material part of the business disposal proceeds or the proceeds from the disposal of a
material asset);
    
    any increase in provisions, other non-cash debits and other non-cash charges
taken into account in establishing Consolidated EBITDA;
 and deducting:
 
    
    any amount of Capital Expenditure actually made by FreeSeas Inc.;
    
    any increase in the amount of Working Capital;
    
    any cash payment in respect of any exceptional or extraordinary item;
    
    any amount actually paid or due and payable in respect of taxes on the profits
of FreeSeas Inc.;
    
    any decrease in provisions and other non-cash credits taken into account in
establishing Consolidated EBITDA;
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Gearing
 Interest Coverage Ratio
 Interest Expense
 
    
    gross interest and arrangement fee on any form of such Financial Indebtedness which has
accrued as an obligation of FreeSeas Inc. during that Relevant Period, including the
interest element of finance leases; and
    
    the consideration given by FreeSeas Inc. during that Relevant Period by way of discount
in connection with such Financial Indebtedness by way of acceptance credit, bill
discounting or other like arrangement.
 GAAP
 Net Interest Expense
 Net Total Debt Service
 
    
    Net Interest Expense for such Relevant Period; and
    
    all scheduled repayments of capital or principal under the terms of any Financial
Indebtedness of FreeSeas Inc. (excluding any Financial Indebtedness owed by FreeSeas Inc.
to any other member of FreeSeas Inc.) in each case which fall due during that Relevant
Period.
 Quarterly Accounts FreeSeas Inc. , FreeSeas Inc.
 Relevant Period
 Total Net Debt
 Tangible Net Worth
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Test Date
 Working Capital
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