EX-10.33 Credit Suisse Offer Letter



 






Credit Suisse




EXHIBIT
10.33




OFFER LETTER




28.08.2007










This Offer Letter replaces the Offer Letter dated 05.07.2007 and is subject to satisfactory
documentation only.






	 	 	 	 	 
	Borrower:
	 	FreeSeas Inc., Marshall Island being the holding company
owning directly 100 % of the shares of the Owners of the
financed Vessels.
	 
	 
	 	 
	 	 
	Guarantors:
	 	The single ship companies owning the Existing Vessels
and the Additional Vessels.
	 
	 
	 	 
	 	 
	Type of Facility:
	 	Secured Revolving Term Loan Facility.
	 
	 
	 	 
	 	 
	Facility Purpose:
	 	To provide part finance/refinance for the recently
acquired Vessels MV “Free Hero”,“Free Jupiter”, and “BBC
Barranquilla” t.b.n. “Free Goddess” for a total purchase
price of US$97,45 million and to fund up to 75 % of the
acquisition costs of the Additional Vessels.
	 
	 
	 	 
	 	 
	Existing Vessels:
	 	1. MV “Free Hero”, 24’318 dwt, Handysize Bulk carrier,
built 1995, purchase price US$25,25 million
	 
	 	 	2. MV “Free Jupiter”, 47’777 dwt, Handymax Bulk carrier, built 2002,
purchase price US$47,0 million

	 
	 	 	3. MV “BBC Barranquilla” t.b.n. “Free Goddess”, 22’051 dwt, Handysize
Bulkcarrier, built 1995, purchase price US$25,2 million
	 
	 
	 	 
	 	 
	Additional

Vessels:
	 	Handysize, Handymax or Panamax Bulk carriers not older than max. 10 years at
the time of acquiring such Additional Vessel subject to prior approval by
the Agent. The consent from the Agent not to be unreasonably withheld based
on satisfactory condition of Vessel to be confirmed by an inspection report
issued by an inspector acceptable to the Agent and the acquisition costs to
be reconfirmed by a shipbroking firm appointed by the Agent. All costs to be
borne by the Borrower.
	 
	 
	 	 
	 	 
	 	 	The Existing Vessels and the Additional Vessels together hereafter referred
as the “Vessels”.
	 
	 
	 	 
	 	 
	Agent, Underwriter

and Swap Bank:
	 	CREDIT SUISSE, Basel/Switzerland
	 
	 
	 	 
	 	 
	Lenders:
	 	The Agent and — at the option of the Borrower to be declared until
03.09.2007–, HSH Nordbank AG, Hamburg for 50% of the Facility amount (i.e.
US$43’500’000). In case HSH Nordbank AG is invited to subject Facility at
the request of the Borrower, they will need to provide the Underwriter with
their firm commitment within 15 banking days after having been invited, but
prior to signing the loan documentation in any event.
	 
	 
	 	 
	 	 
	Facility

Amount:
	 	US$87’000’000.00 (United States Dollars eighty seven million)
	 
	 
	 	 
	 	 






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	Availability:
	 	Upon fulfilment of all conditions precedent and available in two Tranches:
	 
	 
	 	 
	 	 
	 	 	A)
	US$48’700’000.00 (United States Dollars forty
eight million and seven hundred thousand) for the
financing/refinancing of the “Existing Vessels” in up to three
advances. Each drawdown for Existing Vessels to be limited to max. 50%
of its respective purchase price.	 
	 
	 	 
	 	 
	 	 	B)
	US$38’300’000.00 (United States Dollars
thirty eight million and three hundred thousand) for financing up to
max 75 % of newly acquired Additional Vessels. Upon each drawdown
under this Facility the total outstanding amount under the Facility
(Tranches A and B) must not be more than max. 60 % of the then
current Market Value of all mortgaged Vessels (“Existing Vessels” and
“Additional Vessels”); available in several advances, one per each
Additional Vessel, until 3 months prior to Final Maturity of this Loan
Facility.	 
	 
	 	 
	 	 
	Final Maturity:
	 	8 years from first initial drawdown.
	 
	 
	 	 
	 	 
	 	 	Tranche
A) US$48’700’000.00 

	 
	 	 	The max. total available Facility Amount under Tranche A to be reduced by
32 quarterly reductions of US$1’250’000.00 plus a final
reduction/balloon payment of US$8’700’000.00 on Final Maturity Date.

The first reduction being due 3 months after first drawdown, latest
31.01.2008.
	 
	 
	 	 
	 	 
	Reductions:	 	Tranche B) up to US$38’300’000.00 

	 
	 	 	Each advance shall be reduced by quarterly consecutive equal reductions
based on a repayment profile for such acquired Additional Vessel of 18
years starting three months after respective drawdown.
	 
	 
	 	 
	 	 
	Voluntary

Prepayments:
	 	The Borrower to have the option to prepay the Facility
(Tranches A and B) or portions thereof in minimum amounts of
US$1’000’000.00 and multiples thereof, on any interest
payment date, subject to a 15 days prior written notice to
the Agent. Prepaid amounts may be re-borrowed up to the max.
available Facility Amount (Tranches A and B) under each
Tranche unless such prepaid amounts are permanently
cancelled. Such permanent reduction to be applied in inverse
order of maturity.
	 
	 
	 	 
	 	 
	Mandatory

Prepayments:
	 	In the event that any Vessel is sold by the Borrower, or in
the event that any Vessel is declared an Actual, Constructive
or Agreed or Compromised Total Loss, the Borrowers shall
prepay an amount outstanding under the Facility (Tranches A
and B) (plus accrued interest and cost) to ensure that the
overall loan to value ratio after such sale or loss is not
higher than immediately prior to such sale or loss.
	 
	 
	 	 
	 	 
	Interest Rate:
	 	Libor (London Interbank Offered Rate) plus Margin, to be selected for a period of
3, 6, 9 or 12 months or such longer period as shall be agreed with the Agent. Interest shall
be payable at the end of an interest period and in case of an interest period longer than
three months accrued interest shall be paid at quarterly consecutive intervals and on the last
day of such an interest period.
	 





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	Margin:
	 	1% p.a. if the total outstanding Facility amount (minus any pledged funds standing to the
credit of either of the Earnings / Retention account) is equal to or below 60% of the
aggregate of the Fair Market Value of the Vessels.
	 
	 	 	1,25% p.a if the total outstanding Facility amount (minus any pledged funds
standing to the credit of either of the Earnings / Retention account) is in
excess of 60% of the aggregate Fair Market Value of the Vessels .
	 
	 
	 	 
	 	 
	 	 	The market value of the financed Vessels (“Existing Vessels” and
“Additional Vessels”) will be verified by the Agent every six months by
obtaining a market valuation from an international recognized shipbroking
firm (eg. Clarksons in London). If the Borrower does not agree with the
market valuations obtained by the Agent then the Agent will obtain a second
valuation from another international recognized shipbroking firm and the
average of the two valuations will be taken as the market value of the
financed Vessel. In such case the costs of both valuations will have to be
to the account of the Borrower whereby the standard agreement is that the
costs of such valuations will be borne only once every year by the
Borrower.
	 
	 
	 	 
	 	 
	Mandatory Cost:	 	The Interest Rate payable will be increased to reflect the cost of complying with
any applicable regulatory requirements of any relevant regulatory authority.
	 
	 
	 	 
	 	 
	Interest Hedging:
	 	Subject to acceptable terms and conditions under a relevant ISDA Master
Agreement to be entered into by the Borrower and the Swap Bank, and to be included in the
Facility Documentation the Borrower may from time to time for the purpose of hedging the
floating interest rate exposure under subject facility enter into interest rate hedging
products. Any liabilities of the Borrower and all Hedging Transactions shall be secured by
the Facility’s Securities on a pari passu basis with the Borrower’s obligations under the
Facility, and shall be subject to documentation fully acceptable to the Agent and the Swap
Bank.
	 
	 
	 	 
	 	 
	Management Fee:
	 	US$2’000.00 p.a. per financed Vessel, payable half yearly in advance. The first time US$
3’000.00 on signing of the Loan Agreement and thereafter in six- monthly intervals.
	 
	 
	 	 
	 	 
	Agent Fee:
	 	Should subject Facility become a syndicated Facility by way of the Borrower exercising
its option mentioned under ‘Lender’ above, the a.m. Management Fee to be replaced by an
Agency Fee amounting to US$15’000.00 flat per annum payable for the first time on signing of
the loan agreement latest 31.10.2007 and thereafter on each anniversary date of such date.
	 
	 
	 	 
	 	 
	Underwriting

Fee:
	 	0.20% on the total Facility Amount flat
	 
	 
	 	 
	 	 
	Arrangement

Fee:
	 	0.30% on the total Facility Amount flat
	 






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	Such fees (Underwriting and Arrangement) to be due and payable in three tranches as follows:
	 
	1.	 	 	 	USD 50’000.00 already paid.
	2.	 	 	 	USD 167’500.00 (being 50% of the total Fees less the amount of US$ 50’000 already paid) due and payable upon acceptance of this Offer Letter, such acceptance to be declared until Monday, 03.09.2007.
	3.	 	 	 	the remaining 50%, being USD 217’500.00, due on acceptance of this Offer Letter and payable on the date of signing the loan agreement, latest 31.10.2007.
	 	 	 	 	 
	 	 	 	 
	Commitment Fee:	 	0,30% p.a. on the undrawn total Facility Amount, starting on 03.09.2007 until Final Maturity, payable quarterly in arrears.
	 	 	 	 	 
	 	 	 	 
	Security:	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	First Preferred Mortgage on the Vessels
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	First Preferred Assignment of all earnings of the Vessels, including direct assignment of any charter exceeding 12 months in duration.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	First Preferred Assignment of insurances such as Hull &
Machinery, War Risks, Loss of Hire, Protection and Indemnity Insurance
(P & I); Mortgagees Interest Insurance (MII) to be 110 % of the loan
amount outstanding and placed by the Agent at the cost of the
Borrower.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	Pledge of Earnings and Retention account to be kept with
the Agent.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	Guarantees issued by the owning companies of the Vessels

	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	Negative Pledge over shares of the Guarantors
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	All securities to be fully cross collateralized and to secure the entire Facility (Tranches A and B) as well as any hedging transactions entered or to be entered into with the Swap Bank.
	 	 	 	 	 
	 	 	 	 
	Covenants:	 	As usual for shipping transactions, especially but not limited to the following:
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	On signing of the Loan Agreement the following employments are in place:
	 	 	 	 	 

	 	 	 	MV” Free Hero"”, two year t/c till Dec. 2008/Febr. 2009 with Armada @
USD 14’500/day;
	 	 	 	 	 

	 	 	 	MV “Free Jupiter”, three year t/c till Sept. 2010 with Korea Line @ USD
32’000/28’000/24’000/day.
	 	 	 	 	 

	 	 	 	MV “BBC Barranquilla”, t.b.n “Free Goddess”, on t/c till November 2007
at US$13’000/day and upon expiry of the present time charter subject
ship shall be fixed for another t/c for a min. period of 2 years with a
charterer and on rates acceptable to the Lender.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	If any Additional Vessel (“Tranche B”) is being acquired
then upon delivery of such newly acquired Additional Vessel at least
50% of all mortgaged Vessels (based on dwt) need to be employed on
time charter with charterers and on rates acceptable to the Agent.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	All earnings of the Vessels will be paid to Earnings
accounts held with the Agent and each month 1/3 of the forthcoming
maturity payment (instalment plus accrued interest) will be held back
and blocked and only the remaining surplus will be at the free
disposal of the Borrowers/Guarantors. On first drawdown (delivery of
the respective
	 	 	 	 	 
	 	 	 	 






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	 	 	 	Vessel) the Borrowers will credit a minimum amount of US$375’000.00
(per Vessel) to the Earnings account. After all three Existing Vessels
have been delivered to the Borrowers/Guarantors the min. credit balance
on such Earnings account shall not be less than US$1’125’000.00 at all
times. Such amount to be adjusted/increased for any Additional Vessel
acquired.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	During the term of the Facility Free Bulkers SA, Marshall Islands or any other
company approved by the Agent, whereby such consent will not be
unreasonably withheld will carry out the Vessels commercial and
technical management.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Vessels to fly a flag acceptable to the Agent (e.g.
Marshall Islands flag). Such consent not to be withheld
unreasonably.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Vessels to be classed by a generally recognised
first class classification society acceptable to the Agent (e.g.
Lloyd’s Register, American Bureau of Shipping). Such consent
not to be withheld unreasonably.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	No change in flag, class, management or ownership of the
Vessels without prior written consent of the Agent.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Agent reserves the right to have the financed
Vessels physically inspected at any time. The cost of such
inspections shall be borne by the Borrower not more than once every
two years.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Borrower will furnish the Agent with its audited
balance sheets and detailed income statements within 180 days of
their fiscal year end. In addition to the above statements, the
Borrower shall provide any information on their financial condition,
commitments and operations, which the Agent may reasonably require.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Agent reserves the right to get (and ask for) market
valuations for the Vessels at any time. The Borrower will pay for
maximum two valuations per Vessel/year.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	During the tenor of the Facility the total outstanding
loan amount has to be covered at all times by 135 % of the Vessels’
aggregate market value (Fair Market Value). The market values will be
based on market valuations obtained by the Agent from an
international recognized ship broking firm.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	The Guarantors may not incur other debts or make loans
or advances or issue other guarantees to any other corporation or
individual without the prior written consent of the Agent.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	No restrictions on dividend payments unless an event of
default has occurred.
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	All administrative and management costs (including ship
management fees due and payable to the Managers) incurred in the
operation and ownership of the Vessels to be fully subordinated to
the debt service obligations of this Facility.
	 	 	 	 	 
	 	 	 	 






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	 	•
	 	Cross default clause for the Borrower (including any
ship owning company owned by the Borrower).
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 

	 	•
	 	No other shareholder other than the Restis family and/or
Ion G. Varouxakis shall control directly or indirectly more than 30 %
of the shares of FreeSeas Inc. without the prior consent of the
Agent. The Restis family and Ion G. Varouxakis shall maintain at all
times min. 15 % each of the shares of FreeSeas Inc. Furthermore, no
change in management without prior consent of the Agent.
	 	 	 	 	 
	 	 	 	 
	Events of Default:	 	Standard Default Clauses
	 	 	 	 	 
	 	 	 	 
	Documentation:	 	The facility will be subject to the negotiation, execution and exchange of the Loan
and Security Documentation satisfactory to the Agent drawn up under English law by either
Norton Rose, Watson Farley & Williams, Stephenson Harwood, Constant & Constant or Holman
Fenwick appointed by the Agent and at the costs of the Borrower/Guarantors.
	 	 	 	 	 
	 	 	 	 
	Taxes:	 	All payments to be made shall be free and clear of all present and future taxes,
withholding or any other deductions of any kind.
	 	 	 	 	 
	 	 	 	 
	Expenses:	 	All reasonable financial, legal, registration, formation and other out-of-pocket
expenses (including but not limited to inspection costs) incurred by the Agent in connection
with this facility to be paid by the Borrower.
	 	 	 	 	 
	 	 	 	 
	Validity:	 	This Offer Letter has been issued in 2 original sets and is valid for acceptance by the
Borrowers until Monday 03.09.2007 by returning to the Lender a duly signed original set
confirming the acceptance of the offered main terms and conditions.






CREDIT SUISSE









/s/ Lydia Lampadaridou




	 	 	 
	Accepted:
	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	Date

	 	FreeSeas Inc. as Corporate Guarantor and on behalf of the Borrowers
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	Disclaimer for
	 	 











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     Unencoded E-Mail:








     The parties agree that all information, orders and instructions related or connected to the offering
or making of this facility by the bank can be sent via e-mail. The contracting party herewith
expressly authorizes the bank to send information by e-mail. This includes communication via e-mail
with third parties (including but not limited to lawyers and/or any other consultant) who are in any
way affected or involved in the facility or by the services provided by the bank. The bank is
entitled to assume that all the orders and instructions e-mailed by the contracting party or a third
party are from an authorized individual, irrespective of any existing signatory rights in accordance
with the commercial register or the specimen signature.



     The contracting party is aware of the following risks of exchanging information electronically:



     - Unencrypted information is transported over an open, publicly accessible network
and can, in principle, be viewed by others, thereby allowing conclusions to be drawn about an
existing banking relationship.



     - Information can be changed by a third party.



     - The identity of the sender (e-mail address) can be assumed or otherwise
manipulated.



     - The exchange of information can be delayed or interrupted due to transmission
errors, technical faults, interruptions, malfunctions, illegal interventions, network overload, the
malicious blocking of electronic access by third parties, or other shortcomings on the part of the
network provider. Time-critical orders and instructions might not be processed in due time.
Therefore, the contracting party is advised to use another suitable means of communication for these
types of orders and instructions.








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