Freeseas Enters Agreement for the Financing of Vessel Acquisition

Greece, May 26, 2015 - FreeSeas Inc. (Nasdaq CM: FREE) ("FreeSeas" or the "Company"), a transporter of dry-bulk cargoes through the ownership and operation of a fleet of Handysize vessels, announced today that it has entered into an agreement with a group of Norwegian based investors for the financing of the acquisition of assets valued up to US$15 million. Upon the vessel acquisition by the investors, their ship-owning entities will enter into long-term bareboat charter agreement(s) with the Company's subsidiaries including a number of purchase options in the Company's favour, on a profit-sharing basis with the investors. The Company shall identify suitable acquisition candidates within a six-month period. The investors shall be responsible for providing suitable bank financing of approximately up to 50% to 60% to enable the completion of the transaction. Depending on the final leverage and acquisition price, a charter hire rate of up to $5,600 per day shall be payable after the commencement of the charter. Concurrently with the transaction, the Company has agreed to place a mortgage on the M/V "Free Maverick" as security. The Company has the option to replace the vessel with cash security at any time. If however, the vessel is not replaced by cash security, $1,400 per day shall be payable upon the commencement of the bareboat charter of the acquisition vessel. In addition, the M/V "Free Hero" and M/V "Free Goddess" have been sold for consideration as part of the security package, and the Company's subsidiaries have entered into long-term bareboat agreements for such vessels with purchase options at a daily hire rate of $1,100 per vessel. The total agreed security provided by the Company amounts to US$9 million, with a cash release of up to US$2 million in stages. Mr. Ion G. Varouxakis Chairman President and Chief Executive Officer of the Company, commented: "We are pleased to enter into these agreements, which enable the Company to leverage its balance sheet for fleet expansion at an opportune time for counter-cyclical investments in the dry-bulk market. Being positioned as a buyer in a falling asset prices environment we believe is the best possible strategy. The demonstrated ability of the Company to raise capital even in difficult environments is a testament to the dedication and determination of management and the board to succeed in its goal to turn around the Company to profitability."