SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No.1)
FreeSeas Inc.
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(Name of Issuer)
Common Stock, par value $0.001
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(Title of Class of Securities)
Y26496102
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(CUSIP Number)
Konstantinos Koutsoubelis
11 Poseidonos Avenue
Athens 167 77
Greece
+30 210 8910 170
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 7, 2007
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. Y26496102
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FS Holdings Limited
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Marshall Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
2,108,782
8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
2,108,782
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,108,782
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.6%
14. TYPE OF REPORTING PERSON
CO
CUSIP No. Y26496102
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The following constitutes the Schedule 13D filed by the undersigned (the
"Schedule 13D").
Item 1. Security and Issuer
Title of Class of Securities
Common Stock $0.001 par value (the "Shares")
Name and Address of Issuer
FreeSeas Inc. (the "Issuer")
93 Akti Miaouli
Piraeus J3 18233
Athens
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Item 2. Identity and Background.
This Schedule 13D is being filed by FS Holdings Limited (the "Reporting
Person"), a Marshall Islands corporation, with respect to the Common Stock of
the Issuer. The board of directors and executive officers of the Reporting
Person consists of Bella Restis, Victor Restis, Katia Restis and Claudia Restis
(collectively, the "Directors").
The business address of the Reporting Person is Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH9690. The principal
business address of the Directors is 11 Poseidonos Avenue, Athens 167 77,
Greece.
The principal business of the Reporting Person is to invest in securities.
Neither the Reporting Person, nor any of its officers or directors has,
during the last five years: (i) been convicted in any criminal proceeding; or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction that resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof the Reporting Person may be deemed to beneficially
own 2,108,782 Shares.
The total cost for the Shares the Reporting Person may be deemed to
beneficially own is $6,891,500.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
The Reporting Person has acquired its Shares of the Issuer for investment.
The Reporting Person evaluates its investment in the Shares on a continual
basis. The Reporting Person has no plans or proposals as of the date of this
filing which, other than as expressly set forth below, relate to, or would
result in, any of the actions enumerated in Item 4 of the instructions to
Schedule 13D.
The Reporting Person reserves the right to be in contact with members of
the Issuer's management, the members of the Issuer's board of directors, other
significant shareholders and others regarding alternatives that the Issuer could
employ to increase shareholder value.
The Reporting Person reserves the right to effect transactions that would
change the number of Shares they may be deemed to beneficially own.
The Reporting Person further reserves the right to act in concert with any
other shareholders of the Issuer, or other persons, for a common purpose should
it determine to do so, and/or to recommend courses of action to the Issuer's
management, the Issuer's board of directors, the Issuer's shareholders and
others.
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Item 5. Interest in Securities of the Issuer.
As of the date hereof, the Reporting Person is deemed to be the beneficial
owner of 2,108,782 shares of Common Stock of the Issuer. The Reporting Person
has the sole power to vote or direct the vote of 2,108,782 Shares; has the
shared power to vote or direct the vote of 0 Shares; has sole power to dispose
or direct the disposition of 2,108,782 Shares; and has shared power to dispose
or direct the disposition of 0 Shares. Based on a Form 20-F filed by the Issuer
on June 29, 2006, there was a total of 6,282,600 Shares outstanding. Therefore,
the Reporting Person is deemed to beneficially own 33.6% of the outstanding
Shares.
The trading dates, number of Shares purchased and sold and price per share
for all transactions in the Shares in the past 60 days by the Reporting Person
are set forth in Exhibit B
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On May 7, 2007, the Reporting Person entered into a promissory note with
the Issuer by which the Reporting Person agreed to provide one or more loans to
the Issuer in an aggregate amount not to exceed $14 million over a term of two
years. Such loan(s) will accrue interest at a rate of 12% per annum. The
promissory note provides that the Issuer will grant the Reporting Person 50,000
warrants to purchase Shares for every $1 million or pro rata portion thereof
funded under the promissory note up to a maximum of 700,000 Shares. The warrants
have an exercise price of $5.00 per Share and are exercisable for a period of
five years. The number of Shares purchasable upon exercise of the warrants shall
be equal to 50,000 Shares.
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Item 7. Material to be Filed as Exhibits.
Exhibit A: Promissory Note
Exhibit B: Schedule of Transactions in Shares of the Issuer
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
FS HOLDINGS LIMITED
/s/ Katia Restis
By:------------------------
Director
DATE: May 11, 2007
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Exhibit A
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.
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 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 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.
(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;
(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 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.
(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.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed on the date indicated above.
FREESEAS INC.
By:
-----------------------------------
Name: Ion Varouxakis
Title: Chief Executive Officer
Acknowledged:
FS HOLDINGS LIMITED
By:
-------------------------------------
Name: Konstantinos Koutsoubelis
Title: Attorney-in-Fact
Exhibit B
SCHEDULE OF TRANSACTIONS
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None
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SK 02391 0006 772421 v2