Document:

EX-4.59

Exhibit 4.59

Private & confidential

Dated:
17th
March. 2009

ADVENTURE NINE S.A.

(as owner)

and

FBB-FIRST BUSINESS BANK S.A.

(as mortgagee)

DEED OF AMENDMENT

OF THE DEED OF COVENANT

dated 2nd April, 2008 collateral to the

First Priority Statutory Vessel Mortgage over

the Bahamian flag M/V “FREE IMPALA”

Theo V. Sioufas & Co.

Law Offices

Piraeus

 

 

DEED OF AMENDMENT OF DEED OF COVENANT

M/V “FREE IMPALA”

Under the Flag of the Commonwealth of the Bahamas

THIS DEED is made this 17th day of March, 2009 BETWEEN:

	(1)	 	ADVENTURE NINE S.A., a corporation incorporated and validly existing under the laws of the
Republic of the Marshall Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (hereinafter called the
“Owner”) (which expression shall include its successors and permitted assigns) and
	 
	(2)	 	FBB-FIRST BUSINESS BANK S.A., a bank incorporated in the Republic of Greece with its head
office at 91 Michalakopoulou Street, 11528 Athens, Greece, acting except otherwise herein
provided, through its office at 62, Notara and Sotiros Dios streets, 185 35 Piraeus, Greece
(hereinafter called the “Mortgagee” which expression shall include its successors and
assigns).

WHEREAS:

	(A)	 	The Owner is the absolute and unencumbered legal and beneficial owner of the sixty-four
sixty-fourth shares of and in the motor vessel “FREE IMPALA” built by Shanghai Shipyard, in
1997, lawfully and permanently registered under Bahamas flag in the Ships’ Register of the
Port of Nassau and having Official No. 8000947, Call Sign C6UF9, IMO No.: 9138680, of 15888
gross tonnage and 8036 net tonnage, propelled by a diesel internal combustion engine of 6074
KW, together with all her boats, engines, machinery tackle outfit spare gear fuel consumable
and other stores belongings and appurtenances whether on board or ashore and whether now owned
or hereafter acquired and all the additions, improvements and replacements in or on the above
described ship (the said Ship together with all aforesaid is hereinafter called the “Ship”).
	 
	(B)	 	by a Loan Agreement (the “Principal Agreement”) dated 31st March, 2008 and made
between (a) the Mortgagee (therein described as the “Bank”), as lender and (b) the Owner, as
borrower (therein called the “Borrower”), the Mortgagee agreed, subject to and upon the terms
and conditions therein contained, to make available to the Owner, a term loan facility of up
to United States Dollars twenty six million two hundred and fifty thousand (US$26,250,000)
(the “Loan”) for the purposes therein specified and as at the date hereof the outstanding
principal amount which remains due to the Mortgagee in respect of the Loan is United States
Dollars twenty four million (US$24,000,000), which the Owner hereby acknowledges and confirms.
	 
	(C)	 	The Owner in order to secure the repayment of the said principal amount of the said loan
facility executed and delivered in favour of the Mortgagee the First Priority Statutory Ship
Mortgage on the Ship dated the 2nd April, 2008, in favour of the Mortgagee which
was registered in the appropriate mortgage books by the Registrar of Bahamian Ships on the
2nd April, 2008 at 10:16 hours as 

Mortgage “B” (the

[ILLEGIBLE]

 

 

	 	 	“Mortgage”) and a Deed of Covenant supplemental to the Mortgage (the “Deed of Covenant”)
bearing even date to the Mortgage.
	 

	(D)	 	By (a) a First Supplemental Agreement (the “First Supplemental Agreement”)
dated 17th March, 2009 made between (inter alios) the Owner and the Mortgagee
(the Principle Agreement as supplemented and amended by the First Supplemental
Agreement and as the same may from time to time be amended and/or supplemented
hereinafter referred to as the “Loan Agreement”), supplemental and amendatory to
the Principal Agreement, the Mortgagee, at the request of (inter alia) the Owner,
agreed to amend the terms and conditions of the Principal Agreement so as to, among
others, increase the Margin applicable to the Loan from 1.375% to 2%; and
	 
	(E)	 	the Owner and the Mortgagee wish by this Deed of Amendment to amend the Deed of
Covenant.

NOW THEREFORE, the parties hereto agree and covenant as follows:

	1.	 	Recital (B) of the Deed of Covenant is hereby amended to read as follows:

	 	“(B) 	 	 “By a Loan Agreement (which as the same may from time to time be supplemented
and/or amended hereinafter called the “Principal Agreement”) dated 31st
March, 2008 and made between (A) the Owner, as borrower (therein called the “Borrower”)
and (B) the Mortgagee, as lender (therein called the “Bank”) the Mortgagee agreed to
make available to the Borrower and under the terms and conditions set forth therein, a
secured floating interest rate loan facility in the sum of up to United States Dollars
twenty six million two hundred and fifty thousand (US$26,250,000) (the “Commitment”)
for the purposes therein specified.”.

	2.	 	A new Recital (C) is hereby inserted in the Deed of Covenant (and the rest of the
Recitals in the Deed of Covenant are renumbered as required) reading as follows:

	 	“(C) 	 	 By a First Supplemental Agreement to Loan Agreement (the “Principal
Agreement”) dated 17th March, 2009 (the “First Supplemental Agreement”),
made between (inter alios) the Owner and the Mortgagee (the Principle Agreement as
supplemented and amended by the First Supplemental Agreement and/or as the same may
from time to time be amended and/or supplemented hereinafter called the Loan
Agreement”), supplemental to and amendatory of the Principal Agreement, the Mortgagee
agreed (inter alia), upon the terms and conditions therein set forth, to further amend
the terms and conditions of the Principal Agreement as therein provided.

	3.	 	Definition “Loan Agreement” is hereby amended to read as follows:

“  “Loan Agreement” means the Loan Agreement dated 31st March, 2008 mentioned
in Recital (B) hereto as amended by the First Supplemental Agreement and/or as the same
may from time to time hereafter be further amended and/or supplemented;”

	4.	 	Clause 2.2 of the Deed of Covenants is hereby amended to read as follows:

	 	 	 	“The Owner will pay in accordance with Clause 3.1 of the Loan Agreement to the
Mortgagee interest on the Loan calculated on the actual number of days elapsed and
on the basis of a 360 day year for each Interest Period relative thereto at the
annual rate of interest which is conclusively certified by the

[ILLEGIBLE]

 

 

	 	 	 	Mortgagee to be the aggregate of (i) two points (2%) (the “Margin”) and (ii) the
rate per annum determined by the Mortgagee to be equal to the London Interbank
Offered Rate shown on Page 3750 of the Telerate Service for deposits in United
States Dollars in amounts comparable to the amount of the Loan for such Interest
Period at or about 11:00 a.m. (London time) two (2) business days prior to the
commencement of such Interest Period (the “LIBOR”). Such interest shall be paid in
arrears on the last day of each Interest Period, provided that, in the case of an
Interest Period during which one or more Repayment Date(s) fall(s), interest
accruing during such Interest Period shall be payable on each such Repayment Date
and on the last day of such Interest Period;
	 
	 	 	 	Provided however, that the rate of interest for the Loan or the method of
computation thereof may be varied in accordance with Clause 3.6 of the Loan
Agreement; and
	 
	 	 	 	Provided always, that the actual method of calculating the Interest Rate
payable in respect of the Loan or any part thereof and the dates for the payment
thereof shall be governed by the relevant provisions of the Loan Agreement.””

	5.	 	All terms and expressions not defined herein shall have the same meanings given
to them in the Agreement and/or the Deed of Covenant.

Otherwise all other terms and provisions of the Deed of Covenant remain unaltered and in full force
and effect.

IN WITNESS WHEREOF this Deed of Amendment was executed on the date and at the place first above
written.

	 	 	 	 	 	 
	THE OWNER	 	 	 
	 	 	 
	Signed and Delivered as a Deed 

By /s/ Ion Varouxakis  

	)	      /s/ Ion Varouxakis	 
	for and on
behalf of ADVENTURE NINE S.A.
	)	 	 	 
	 	 	 	 )	 
	Witness

	 	/s/ Ioannis Fassolis
	 )	 
	 
	 	 
 	 )	 
	Name:

	 	Ioannis Fassolis	 )	 
	Address:	 	15 Sachtouri Street, Piraeus, Greece	 	 
	
Occupation: Attorney-at-Law	 	 
	 
	of Marshall Islands, in the presence of:

	 	 

 

 

THE MORTGAGEE

	 	 	 	 	 	 	 
	EXECUTED as a DEED for and on behalf

	 	 	)	 	 	 
	of FBB-FIRST BUSINESS BANK S.A.

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	by
/s/ Mr. Nikolaos
Vougioukas 

	 	 	)	 	 	
	 
	 	 	)	 	 	 
 
	its duly authorised Attorney-in-fact,

	 	 	)	 	 	/s/ Nikolaos Vougioukas
	 
	 	 	 	 	 	 
 
	in the presence of:

	 	 	)	 	 	Attorney-in-fact

	 	 	 	 	 
	Witness:
	 	 	 	 
	Name:

	 	 

Maria C. Galanopoulou
	 	 
	Address:

	 	13, Defteras Merarchias street, Piraeus, Greece	 	 
	Occupation:

	 	Attorney-at-lawEX-4.60

Exhibit 4.60

HBU TERM SHEET

Term Sheet with regard to:

	•	 	the refinancing of overdraft facility IV as mentioned in the credit agreement between
Hollandsche Bank-Unie N.V. (“HBU”) and Adventure Two S.A., Adventure Three S.A., Adventure
Seven S.A. and Adventure Eleven S.A. dated 12th August, 2008: and
	 
	•	 	your request to grant a waiver with respect to a breach of the loan to value ratio.

With regard to our various discussions regarding the waiver request of a potential breach of the
loan to value clause under the above mentioned credit agreement and the foreseen refinancing of
part of the existing financing we would like to inform you as follows:

Subject to credit committee approval and satisfactory documentation we are willing to
grant the requested waiver and to refinance the existing overdraft facility amounting to pro resto
USD 29,600,000 on the following terms and conditions.

Borrower:

	 	•	 	Adventure Two S.A., Adventure Three S.A., Adventure Seven S.A., Adventure Eleven
S.A.

Guarantor:

	 	•	 	FreeSeas, Inc.

Loan Facilities:

	 	•	 	I      Existing overdraft facility to pro resto USD 1,125,000;
	 
	 	•	 	II      Existing term loan amounting to pro resto USD 21,750,000;
	 
	 	•	 	III      Existing overdraft facility amounting to pro resto USD 29,600,000 (this facility
will be refinanced by facility IV);
	 
	 	•	 	IV      New term loan amounting to USD 27,100,000 to refinance the existing overdraft
facility amount to pro resto USD 29,600,000 of which facility an amount of USD
27,100,000 will be outstanding; and
	 
	 	•	 	Existing conditional overdraft facility amounting to USD 3,000,000 will be
cancelled.

     Maturity:

	 	•	 	Maturity of the existing term loan and overdraft facilities that are being continued
will remain unchanged.
	 
	 	•	 	The lifetime of the new term loan amounting to USD 27,100,000 will be 3.5 years
starting May 1st, 2009 and ending November 1st, 2012.

Repayment:

	 	•	 	The repayment schedule of the existing overdraft facility of pro resto USD 1,125,000
and the existing term loan of pro resto USD 21,750,000 will remain unchanged.
	 
	 	•	 	The last repayment date of the existing overdraft facility amounting to pro resto
USD 29,600,000 will change from August 1st, 2009 in May 1st,
2009.
	 
	 	•	 	The repayment schedule of the new term loan will be as follows:

 

 

	 	o	 	USD 600,000 per quarter starting August 1st, 2009
with a balloon payment of USD 19,300,000 as per November 1st, 2012.
	 
	 	o	 	Prepayment of the new term loan is allowed without penalty.
	 
	 	o	 	In case of a sale or scrapping of the Free Destiny, Free Envoy,
Free Maverick and the Free Knight, the proceeds of such a sale or scrapping
will be used as a mandatory prepayment of the Loan Facilities. HBU will at its
sole discretion consider at the time of such mandatory prepayment if part of
the proceeds can be excluded of the prepayment whereby amongst others the
financial condition of the group at such time and its prospects would be taken
into account.
	 
	 	o	 	In case the group receives debt and/or equity proceeds through
an issue of a convertible bond, a rights issue or otherwise, 10% of the
proceeds, up to USD 3,000,000, will be used for prepayment of the outstanding
facilities with HBU.

	 	•	 	HBU is only willing to defer one instalment of USD 750,000 of the existing term
loan amounting to pro resto USD 21,750,000 and one instalment of USD 600,000 under
the new term loan amounting to USD 27,100,000 as a result of a restructuring of
existing or future charters.

Rates:

	 	•	 	The margin of the existing term loan and overdraft facilities that are being
continued will increase from 130 bp to 225 bp as per March 1st, 2009.
The margin will decrease to 130 bp the moment the Borrower meets the originally
agreed loan to value ratio of 70%.
	 
	 	•	 	The margin of the new term loan will be Libor + 300 bp.
	 
	 	•  	 	The commitment fee of the existing term loan and overdraft facilities are
being continued will increase from 65 bp to 112.5 bp as per March 1st,
2009. The commitment fee will decrease o 65 bp the moment the Borrower meets the
originally agreed loan to value ratio of 70%.
	 
	 	•	 	The margin of new term loan will be increased by a “liquidity premium”,
which will be determined on August 1st, 2009.

Fees:

	 	•	 	A waiver fee and upfront fee of in total USD 250,000 payable on April
1st, 2009 whether or not the new term loan amounting to USD 27,100,000
is consummated.
	 
	 	•	 	A success fee of 225 bp with a minimum of USD 100,000 over the outstanding
balloon of the new term loan of USD 27,100,000 as per November 1st,
2011.

Security:

	 	•	 	The existing security as laid down in the existing credit agreement dated
12th August, 2008 will remain in full force, which will need to be confirmed
by local counsel in a legal opinion. In case local counsel advises us that amendments
to the security package are required, effecting such amendments will be a condition to
completing the amended facilities.

Representations and warranties:

	 	•	 	The representations and warranties may be extended to reflect what HBU considers
appropriate for this type of transaction in the current circumstances.

 

 

Covenants:

	 	•	 	The existing covenants as laid down in the existing credit agreement dated
12th August, 2008 will remain in full force.
	 
	 	•	 	We will waive existing loan to value ratio not to exceed 70% at any moment until
July 1st, 2010, which waiver will be set out in a separate waiver letter.
	 
	 	•	 	A new value to loan covenant related to the Facilities will be included in the
credit agreement and will be as follows:

	 	o	 	100% as per July 1st, 2010
	 
	 	o	 	110% as per July 1st, 2011
	 
	 	o	 	120% as per July 1st, 2012
	 
	 	o	 	125% as per December 31, 2012

	 	•	 	Cross default clause with all existing and future debt providers of FreeSeas Inc.
and her subsidiaries.

Events of default:

	 	•	 	The events of default may be extended to reflect what HBU considers appropriate for
this type of transaction in the current circumstances. *see Note herebelow

Clauses:

	 	•	 	The terms and conditions of any debt and/or equity issue either by way of an issue
of convertible bonds, a rights issue or otherwise must be on terms satisfactory to HBU.
Next to the mandatory prepayment of 10% of the proceeds so received, an additional 25%
of the remainder must be placed on a deposit with HBU until these proceeds will be used
for the purchase of vessels, which purchase requires the prior approval of HBU.
	 
	 	•	 	HBU will have the right of first refusal to provide senior debt for one or more
vessels.
	 
	 	•	 	No further bank debt and financial obligations in excess of USD 1,000,000 for the
Guarantor and its existing subsidiaries. Consent from HBU to be required for
increasing indebtedness and financial obligations in order to acquire additional
vessels, such consent not to be unreasonably withheld with criterion being HBU’s
position not be deteriorated.
	 
	 	•	 	No cash dividend payments by the Guarantor without the prior written consent of HBU.
	 
	 	•	 	The terms and conditions of the waiver of FBB and CSFB must be at the convenience of
HBU.
	 
	 	•	 	All excess cash after reasonable operating expenses and after deduction of required
working capital, must be used for prepayment of the existing financings of HBU, FBB and
CSFB. A formula for the determination of excess cash and the way the excess cash will
be used for prepayment of the financings of HBU, FBB and CSFB has to be agreed upon
between the banks, the borrower and the guarantor. Definition of excess cash to be
agreed in documentation phase.
	 
	 	•	 	Other relevant covenants with HBU considers appropriate for this type of transaction
in the current circumstances.

 

			
	*  	 	Note: Signed and accepted, and deemed to
incorporate clarifications included in e-mail dated 23 March 2009 sent by Mr.
Vodegel to FreeSeas Inc. which is attached herewith. Piraeus 24 March 2009

	 	 	 	 	 
	 	 	 
	 	                                              /s/ Ion G. Varouxakis
 	 
	 	Ion G. Varouxakis, President 	 
	 	FreeSeas Inc. 	 

 

 

	 	 	 	 	 

Applicable Law:

	 	•	 	Dutch law

Documentation:

	 	•	 	We will ask an external lawyer to write the amendments of the existing credit
agreement, the credit agreement of the new term loan amounting to USD 27,100,000 and to
write the term sheet in which the above terms and conditions are incorporated. Such
new agreement will basically amend and restate the current contractual arrangements and
will effectively incorporate the various loans and the guarantee by FreeSeas Inc. into
one document. Such amended and restated agreement shall include standard provisions in
respect of, amongst others, illegality, (tax) indemnities, voluntary and mandatory
prepayments, increased costs, grossing-up, market disruption, costs and expenses and
default interest. These outside legal expenses will be for the account of the
borrower.

We trust to have been of service to you. Looking forward to your reply,

Yours faithfully,

New HBU II N.V.

/s/ Peter Vodegel                    

Peter Vodegel

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