Document:

Ex-4.27 Warrant Clarification Agreement dated May

 

Exhibiti 4.27

WARRANT CLARIFICATION AGREEMENT

     THIS WARRANT CLARIFICATION AGREEMENT (this “Agreement”), dated
May 10, 2007, amends the Warrant Agreement, dated as of July 29, 2004 (the “Warrant
Agreement”), by and between FreeSeas Inc., a corporation organized under the laws of the
Republic of the Marshall Islands (“Company”), the successor by merger with Trinity Partners
Acquisition Company Inc. (“Trinity”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New
York corporation (“Warrant Agent”).

     WHEREAS, the Company assumed Trinity’s rights and obligations under the Warrant Agreement by
virtue of Trinity’s merger with and into the Company on December 15, 2005;

     WHEREAS, Section 3.3.2 of the Warrant Agreement provides that Company shall not be obligated
to deliver any securities pursuant to the exercise of a Warrant unless a registration statement
under the Securities Act of 1933, as amended (“Securities Act”), with respect to the Common
Stock is effective;

     WHEREAS, in furtherance of the foregoing, Trinity’s final prospectus, dated July 29, 2004,
delivered in connection with the original offering of the Warrants, indicated (i) that no Warrant
would be exercisable unless at the time of exercise a prospectus relating to the Common Stock
issuable upon exercise of the Warrant is current and the Common Stock has been registered under the
Securities Act or qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of the Warrant and (ii) that the Warrant may be deprived of any value and
the market for the Warrant may be limited if the prospectus relating to the Common Stock issuable
upon the exercise of the Warrant is not current or if the Common Stock is not qualified or exempt
from qualification in the jurisdictions in which the holder of the Warrant resides; and

     WHEREAS, the parties hereto deem it necessary and desirable to amend the Warrant Agreement to
clarify that the registered holders do not have the right to receive a net cash settlement in the
event the Company does not maintain a current prospectus relating to the Common Stock issuable upon
exercise of the Warrants at the time such Warrants are exercisable.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties hereto agree to amend the Warrant Agreement as set forth
herein.

     1. Warrant Agreement. The Warrant Agreement is hereby amended by adding the following
sentence as the penultimate sentence of Section 3.3.2 thereof:

“Furthermore, if the Company is unable to deliver any securities
pursuant to the exercise of a Warrant as a result of the foregoing,
the Company will have no obligation to pay such registered holder any
cash or other consideration or otherwise “net cash settle” the
Warrant.”

 

 

     2. Miscellaneous.

          (a) Defined Terms. Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Warrant Agreement.

          (b) Governing Law. The validity, interpretation, and performance of this Agreement
and of the Warrants shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or
claim against it arising out of or relating in any way to this Agreement shall be brought and
enforced in the courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenient forum. Any such process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 of the
Warrant Agreement. Such mailing shall be deemed personal service and shall be legal and binding
upon the Company in any action, proceeding or claim.

          (c) Responsibility of the Warrant Agent. The Warrant Agent has no responsibility for
the correctness of the recitals above which shall be taken as statements of the Company, and makes
no representations as to the validity, sufficiency or enforceability of this Agreement.

          (d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives, successors and assigns.

          (e) Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and merges and supersedes all
prior discussions, agreements and understandings of any and every nature among them. Except as set
forth in this Agreement, provisions of the Warrant Agreement which are not inconsistent with this
Agreement shall remain in full force and effect.

          (f) Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as part of
this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.

          (g) Execution. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument. Each counterpart may be delivered by facsimile transmission, which transmission
shall be deemed delivery of an originally executed document.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	FREESEAS INC.

 	 
	By:  	/s/
Ion Varouxakis 	 
	 	 	Ion Varouxakis 	 
	 	 	Chairman, Chief Executive Officer
and President 	 
	 

	 	 	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY

 	 
	By:  	/s/
Herbert J. Lemmer 	 
	 	 	Name: Herbert J. Lemmer 	 	 
	 	 	Title: Vice President 	 
	 

3Ex-4.28 Promissory Note dated May 7, 2007

 

Exhibit 4.28

 

			
	US$14,000,000
	 	May 7, 2007  

New York, New York

PROMISSORY NOTE

     For value received, and on the terms and subject to the conditions set forth herein, FreeSeas
Inc., a corporation organized and existing under the laws of the Republic of the Marshall Islands
(the “Company”), HEREBY PROMISES TO PAY to the order of FS Holdings Limited (the “Noteholder”), on
the Maturity Date (as defined below) the principal sum of US$14,000,000 (the “Loan”), plus any
unpaid interest accrued thereon, or such lesser amount as shall be equal to the unpaid principal
amount of the Loan plus such interest. The Company hereby promises to make principal repayments
and to pay interest on the dates and at the rate or rates provided for herein.

     The Noteholder will receive warrants (the “Warrants”) to purchase shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) at an exercise price of $5.00 per
share (the “Exercise Price”). The Warrants shall be exercisable for a period of five years from
the date of grant. The number of shares purchasable upon exercise of the Warrants shall be equal
to 50,000 shares for each One Million Dollars or pro rata portion thereof funded under the terms of
this Note up to a maximum of 700,000 shares of Common Stock (the “Warrant Shares”).

     SECTION 1. Certain Terms Defined. The following terms for all purposes of this Note shall
have the respective meanings specified below.

     “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in New York, New York or in Piraeus, Greece are authorized by law to close.

     “Capital Event” shall means any event in which the Company raises gross proceeds of not less
than $40,000,000, whether by the sale of new common stock or other equity securities of the
Company, or securities convertible or exchangeable into equity securities of the Company.

     “Commission” has the meaning set forth in Section 9(i).

     “Common Stock” has the meaning set forth in the introductory paragraphs.

     “Company” has the meaning set forth in the introductory paragraphs.

     “Event of Default” has the meaning set forth in Section 7.

     “Exchange Act” has the meaning set forth in Section 9(i).

     “Exercise Price” has the meaning set forth in the introductory paragraphs.

     “GAAP” has the meaning set forth in Section 9(c).

     “Loan” has the meaning set forth in the introductory paragraphs.

 

 

     “Material Adverse Effect” has the meaning set forth in Section 8(c).

     “Maturity Date” means the earlier of (i) that certain date that is the second anniversary from
the date hereof, (ii) the date of a Capital Event, and (iii) the date on which the amounts due
under this Note have been accelerated and are immediately due and payable pursuant to the terms
hereof; provided that if such date is not a Business Day, then such date shall be the next
succeeding Business Day.

     “Note” shall mean this Promissory Note as amended, from time to time, in accordance with the
terms hereof.

     “Noteholder” has the meaning set forth in the introductory paragraphs.

     “Notice” has the meaning set forth in Section 2.

     “Period” means from the date hereof to the earlier of (a) October 31, 2007, (b) the
termination of any Memorandum and (c) the date of occurrence of an Event of Default.

     “Securities Act” has the meaning set forth in Section 8(e).

     “Subsidiary” means any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power (absolutely or contingently)
for the election of directors or other persons performing similar functions are at the time owned
directly or indirectly by the Company and/or any of its other Subsidiaries.

     “Warrants” has the meaning set forth in the introductory paragraphs.

     “Warrant Shares” has the meaning set forth in the introductory paragraphs.

     SECTION 2. Loan Drawdown.

     The Noteholder shall make one or more loans available to the Company during the Period in an
aggregate amount not to exceed the Loan. As a condition to the Noteholder making any loan
hereunder, the Company shall provide to the Noteholder at least three (3) Business Days’ prior
written notice of a drawdown request in the minimum amount of at least $250,000 (which drawdown
notice shall include a signed memorandum of agreement or similar documentation for the purchase of
a vessel and any other documentation reasonably requested by the Noteholder) (each collectively, a
“Notice”). Upon the reasonable satisfaction of the Noteholder of the Notice, the Noteholder shall
lend, and the Company shall borrow, such amounts on the drawdown date as set forth in such Notice.

     SECTION 3. Maturity Date.

     The Loan shall mature, and the principal amount thereof shall become immediately due and
payable (together with unpaid interest accrued thereon) on the Maturity Date.

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     SECTION 4. Interest Payments.

     Interest shall accrue from the date hereof at a rate equal to twelve percent (12%) per annum
and will be capitalized on an annual basis and added to the principal balance of the Loan at the
end of each year. Notwithstanding the foregoing, upon an Event of Default, this Note shall bear
interest on and after the date of such Event of Default at a rate equal to the lesser of (i) the
maximum interest rate permitted by applicable law and (ii) twenty per cent (20%) per annum.

     Interest shall be payable upon the Maturity Date. Interest shall be computed on the basis of
a year of 365 days and paid for the actual number of days elapsed.

     SECTION 5. Optional Prepayments.

     The Company may prepay the Loan, upon thirty (30) days prior written notice to the Noteholder,
in whole or in part at any time or from time to time without penalty or premium by paying the
principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
Any such prepayments made under this Section 5 shall be in minimum increments of $500,000. Amounts
of the Loan borrowed and repaid or prepaid may not be reborrowed.

     SECTION 6. General Provisions As To Payments.

     All payments of principal and interest on the Loan by the Company hereunder shall be made not
later than 12:00 Noon (New York City time) on the date when due either by cashier’s check,
certified check or by wire transfer of immediately available funds to the Noteholder’s account at a
bank specified by the Noteholder in writing to the Company without reduction by reason of any
set-off or counterclaim.

     SECTION 7. Events Of Default.

     Each of the following events shall constitute an “Event of Default”:

          (a) the principal of the Loan shall not be paid when due;

          (b) any interest on the Loan shall not be paid within five (5) Business Days of when it was
due;

          (c) the Company breaches any covenant hereunder and such breach is not cured within thirty
(30) days after notice from the Noteholder;

          (d) any representation or warranty of the Company made in this Note shall be incorrect when
made in any material respect;

          (e) the Company or any Subsidiary shall default in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any material indebtedness of the
Company or any Subsidiary involving the borrowing of money or the extension of credit in excess of
$500,000, or a default shall occur in the performance or observance of any obligation or condition
with respect to such indebtedness if the effect of such default is to accelerate the maturity of
any such indebtedness, or such default shall continue

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unremedied for any applicable period of time sufficient to permit the holder or holders of
such indebtedness, or any trustee or agent for such holders, to cause such indebtedness to become
due and payable prior to its expressed maturity;

          (f) any judgment or order for the payment of money in excess of $500,000 shall be rendered
against the Company or any Subsidiary, shall remain unpaid, and shall not be covered by insurance;

          (g) a court shall enter a decree or order for relief in respect of the Company or any
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or any Subsidiary or for any substantial part of
the property of the Company or any Subsidiary or ordering the winding up or liquidation of the
affairs of the Company or any Subsidiary, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or

          (h) the Company or any Subsidiary shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or any Subsidiary or for any substantial part of the property of the
Company or any Subsidiary, or the Company or any Subsidiary shall make any general assignment for
the benefit of creditors.

     If an Event of Default described in (g) or (h) above shall occur, the principal of and accrued
interest on the Loan shall become immediately due and payable without any declaration or other act
on the part of the Noteholder. Immediately upon the occurrence of any Event of Default described
in (g) or (h) above, or upon failure to pay this Note on demand, the Noteholder, without any notice
to the Company, which notice is expressly waived by the Company, may proceed to protect, enforce,
exercise and pursue any and all rights and remedies available to the Noteholder under this Note, or
at law or in equity.

     If any Event of Default in (a) — (f) above shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Noteholder may by notice to the Company declare all or any
portion of the outstanding principal amount of the Loan to be due and payable, whereupon the full
unpaid amount of the Loan which shall be so declared due and payable shall be and become
immediately due and payable without further notice, demand or presentment.

     SECTION 8. Representations.

     The Company hereby represents and warrants to the Noteholder, as follows:

          (a) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the Republic of the Marshall Islands and has the requisite corporate power to
own, lease and operate its properties and assets and to conduct its business as it is now being
conducted. Each Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of organization and has the requisite

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corporate power to own, lease and operate its properties and assets and to conduct its
business as it is now being conducted

          (b) The Company has the requisite legal and corporate power and authority to enter into, issue
and perform this Note and the Warrants in accordance with the terms hereof and thereof. The
execution, delivery and performance of this Note and the Warrants by the Company and the
consummation by it of the transactions contemplated hereby or thereby have been duly and validly
authorized by all necessary corporate action, and no further consent or authorization of the
Company, its board of directors or stockholders is required. When executed and delivered by the
Company, this Note and the Warrants shall constitute valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application.

          (c) The execution, delivery and performance of this Note and the Warrants and the consummation
by the Company of the transactions contemplated hereby or thereby, do not and will not (i) violate
or conflict with any provision of the Company’s certificate of incorporation or bylaws, each as
amended to date, or any Subsidiary’s comparable charter documents, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries’ respective properties or assets are bound, or
(iii) result in a violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries are bound or affected, except, in the case of clauses (ii) and (iii) above, for
any such default or violation that would not, individually or in the aggregate, have a material
adverse effect on the business, properties, management, financial position, results of operations
or prospects of the Company and its Subsidiaries taken as a whole (a “Material Adverse Effect”).
Neither the Company nor any of its Subsidiaries is required under federal, state, foreign or local
law, rule or regulation to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under this Note or any of the Warrants.

          (d) The Company is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court, governmental agency or any regulatory or self-regulatory
agency or any other person in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Note or any of the Warrants, except where the failure to obtain any
such consent, authorization or order, or the failure to make any such filing or registration, could
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
All consents, authorizations, orders, filings and registrations which the Company is required to
obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date
hereof.

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          (e) The Warrants when issued and delivered will be duly and validly issued and will be free of
all liens and restrictions on transfer other than any restrictions on transfer under the Securities
Act of 1933, as amended (the “Securities Act”).

          (f) The Warrant Shares have been duly reserved for issuance by the Company in sufficient
number to cover the exercise of all of the Warrants. The issuance of the Warrant Shares upon
exercise of the Warrants has been duly authorized by the Company and the Warrant Shares when
delivered in accordance with the Warrants, will be validly issued, fully paid and non-assessable,
and free of all liens and restrictions on transfer other than any restrictions on transfer under
the Securities Act.

          (g) The offer, issuance, sale and delivery of the Warrants and Warrant Shares will not under
current laws and regulations require compliance with the prospectus delivery or registration
requirements of the Securities Act.

     SECTION 9. Affirmative Covenants.

          (a) The Company and each Subsidiary shall maintain its existence and authority to conduct its
business as presently contemplated to be conducted;

          (b) The Company shall comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders applicable to the Company and each Subsidiary;

          (c) The Company shall keep and cause each Subsidiary to keep adequate records and books of
account, in which complete entries will be made in accordance with United States generally accepted
accounting principles (“GAAP”) consistently applied, reflecting all financial transactions of the
Company and its Subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in
connection with its business shall be made;

          (d) The Company shall not enter into any agreement in which the terms of such agreement would
restrict or impair the right or ability to perform of the Company or any Subsidiary under this Note
or any of the Warrants;

          (e) The Company and its Subsidiaries shall maintain insurance with responsible companies in
such amounts and against such risks as is customary in the shipping industry;

          (f) Company shall pay all applicable taxes as they come due except for any taxes: (i) the
amount of which is not individually or in the aggregate material; or (ii) the amount, applicability
or validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP;

          (g) The Company shall maintain its listing on the Nasdaq Capital Market and neither the
Company nor any of its Subsidiaries shall take any action which would be reasonably expected to
result in the delisting or suspension of the Company’s common stock on the Nasdaq Capital Market;

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          (h) The net proceeds from this Note shall be used by the Company solely for the purchase of
four vessels under four respective Memorandum of Agreements (collectively the “Memorandum”) dated
May 1st 2007 between the four wholly-owned subsidiaries of the Company, “Adventure Five
S.A”, “Adventure Six S.A.”, “Adventure Seven S.A.” and “Adventure Eight S.A.”, as respective
buyers, and “Ocean Daisy Shipping Ltd.”, “Ocean Phoenix Shipping Ltd.”, ”Olympian Goddess S.A.” and
“Ocean Harmony Shipping S.A.”, as respective sellers of M/V “Ocean Daisy”, M/V “Ocean Phoenix”, M/V
“Ocean Harmony” and M/V “Olympian Goddess”.

          (i) The Company shall timely file all reports required to be filed with the Securities and
Exchange Commission (the “Commission”) pursuant to the Securities and Exchange Act of 1934, as
amended, (the “Exchange Act”), and the Company shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.

          (j) The Company shall within a reasonable time following the Noteholder’s request, provide any
further information about the financial position of the Company which the Noteholder may reasonably
request.

          (k) The Company shall issue Warrants to the Noteholder within ten (10) Business Days of the
date of lending of any portion of the Loan, in such numbers pro rata to the portion of the Loan
lent and as is provided for in the introductory paragraphs.

          (l) The Warrants shall contain customary anti-dilution protection, registration rights, and
such other terms as are reasonably acceptable to the Noteholder and in any case on terms no less
favorable to the Noteholder than those contained in warrants issued by the Company then
outstanding.

     SECTION 10. Transfers.

     The Company may not transfer or assign this Note nor any right or obligation hereunder to any
person or entity without the prior written consent of the Noteholder. The Noteholder may transfer
or assign this Note and/or any of the Warrants without the prior consent of the Company.

     SECTION 11. Powers And Remedies Cumulative; Delay Or Omission Not Waiver Of Event Of Default.

     No right or remedy herein conferred upon or reserved to the Noteholder is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

     No delay or omission of the Noteholder to exercise any right or power accruing upon any Event
of Default occurring and continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any Event of Default or an acquiescence therein; and every

7

 

power and remedy given by this Note or by law may be exercised from time to time, and as often
as shall be deemed expedient, by the Noteholder.

     SECTION 12. Modification.

     This Note may be modified in writing only with the written consent of both the Company and the
Noteholder.

     SECTION 13. Attorneys Fees/Enforcement Costs.

          (a) The Company will reimburse the Noteholder for reasonable legal fees and expenses in
connection with the transactions contemplated hereby, including without limitation the negotiation,
documentation and execution of this Note and the Warrants and (ii) any amendments to any of the
documents contemplated in (i) above, and

          (b) In the event that this Note is collected by law or through attorneys at law, or under
advice therefrom, the Company agrees to pay all costs of collection, including reasonable
attorneys’ fees, whether or not suit is brought, and whether incurred in connection with
collection, trial, appeal, bankruptcy or other creditors’ proceedings or otherwise.

SECTION 14. Indemnification

     The Company agrees to indemnify and hold harmless the Noteholder (and their respective
directors, officers, managers, partners, members, shareholders, affiliates, agents, successors and
assigns) (each an “Indemnified Party”) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’
fees, charges and disbursements) incurred by such Indemnified Party as a result of any inaccuracy
in or breach of the representations, warranties or covenants made by the Company herein.

     SECTION 15. Miscellaneous.

          (a) The parties hereto hereby waive presentment, demand, notice, protest and all other demands
and notices in connection with the delivery, acceptance, performance and enforcement of or any
default under this Note, except as specifically provided herein.

          (b) Any provision of this Note which is illegal, invalid, prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision in any other
jurisdiction.

          (c) This Note shall bind the Company and its successors and permitted assigns. The rights
under and benefits of this Note shall inure to the Noteholder and its successors and assigns.

          (d) The Section headings herein are for convenience only and shall not affect the construction
hereof.

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          (e) All notices, requests, demands, consents, instructions or other communications required or
permitted hereunder shall be made in writing and faxed, mailed or delivered to each party at the
respective addresses of the parties, or at such other address or facsimile number as the Company
shall have furnished to Noteholder in writing. All such notices and communications will be deemed
effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one
business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv)
one business day after being deposited with an overnight courier service of recognized standing or
(v) on receipt of confirmation of delivery.

          (f) In the event any interest is paid on this Note, which is deemed to be in excess of the
then legal maximum rate, then that portion of the interest payment representing an amount in excess
of the then legal maximum rate shall be deemed a payment of principal and applied against the
principal of this Note.

THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.

THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY LITIGATION ARISING HEREUNDER. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

BY ITS ACCEPTANCE OF THIS NOTE THE NOTEHOLDER AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE NOTEHOLDER OR THE
COMPANY. THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
NOTEHOLDER MAKING THE LOAN EVIDENCED HEREBY.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on the date
indicated above.

	 	 	 	 	 
	 	FREESEAS INC.

 	 
	 	By:  	/s/ Ion Varouxakis
 	 
	 	 	Name:  	Ion Varouxakis 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

Acknowledged:

FS HOLDINGS LIMITED

	 	 	 	 	 
	 	 	 
	By:  	/s/
illegible 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

10

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