UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2013
Commission File Number: 000-51672
FREESEAS INC.
(Name of Registrant)
10, Eleftheriou Venizelou Street (Panepistimiou
Ave.), 106 71, Athens, Greece
(Address of principal
executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F
x
Form 40-F
¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
¨
On September 25, 2013,
FreeSeas Inc. (the “Company”) entered into an Assignment and Amendment Agreement (the “Amendment”) with
Deutsche Bank Nederland N.V. (“Deutsche Bank”), Hanover Holdings I, LLC (“Hanover”), Crede CG III, Ltd.
(“Crede”) and the Company’s wholly-owned subsidiaries: Adventure Two S.A., Adventure Three S.A., Adventure Seven
S.A. and Adventure Eleven S.A.
As previously reported
on July 10, 2013 in a 6-K filed with the Securities and Exchange Commission, the Company, on July 5, 2013, entered into a Debt
Purchase and Settlement Agreement (the “Settlement Agreement”) with Deutsche Bank, Hanover and the Company’s
wholly-owned subsidiaries: Adventure Two S.A., Adventure Three S.A., Adventure Seven S.A. and Adventure Eleven S.A.
Hanover assigned its
right under the Settlement Agreement to Crede on September 25, 2013, as previously reported on September 26, 2013 in a 6-K filed
by the Company with the Securities and Exchange Commission. Pursuant to the terms of the Settlement Agreement, as amended, Crede
agreed to purchase $10,500,000 of outstanding indebtedness owed by the Company to Deutsche Bank on the terms set forth therein.
Upon payment in full of the $10,500,000 purchase price for such purchased indebtedness by Crede to Deutsche Bank in accordance
with the terms and conditions of the Settlement Agreement, as amended, the remaining outstanding indebtedness of the Company and
its subsidiaries to Deutsche Bank will be forgiven, and the mortgages granted to Deutsche Bank on two vessels will be discharged
and the Company would own these two vessels free and clear of all such liens granted to Deutsche Bank.
On
September 26, 2013, Crede filed a complaint against the Company in the Supreme Court of the State of New York (the “Court”),
seeking
to recover an aggregate of $10,500,000, representing
all amounts due under the Settlement
Agreement, as amended
(the “Claim”)
. On September 26, 2013, Crede and the Company
entered into an Exchange Agreement (the “Exchange Agreement”), in order to settle the Claim. Pursuant to the Exchange
Agreement, upon court approval (“Court Approval”),
the Company will intiailly issue and deliver to Crede 5,059,717
shares (the “Settlement Shares”) of the Company’s common stock, $0.001 par value (the “Common Stock”).
The Settlement Shares represent approximately 9.9% of the total number of shares of Common Stock outstanding at the time of execution
of the Exchange Agreement. The Exchange Agreement provides that the Settlement Shares will be subject to adjustment on the trading
day immediately following the Calculation Period (as defined below) to reflect the intention of the parties that the total number
of shares of Common Stock to be issued to Crede pursuant to the Exchange Agreement be based upon a specified discount to the trading
volume weighted average price (the “VWAP”) of the Common Stock for a specified period of time subsequent to the Court
Approval. Specifically, the total number of shares of Common Stock to be issued to Crede pursuant to the Exchange Agreement shall
be equal to the quotient obtained by dividing (i) $11,850,000 by (ii) 78% of the VWAP of the Common Stock over the 75-consecutive
trading day period immediately following the first trading day after Court Approval (or such shorter trading-day period as may
be determined by Crede in its sole discretion by delivery of written notice to the Company) (the “Calculation Period”),
rounded up to the nearest whole share (the “VWAP Shares”). As a result, the Company ultimately may be required to issue
to Crede substantially more shares of Common Stock than the number of Settlement Shares initially issued (subject to the limitations
described below). The Exchange Agreement further provides that if, at any time and from time to time during the Calculation Period,
the total number of Settlement Shares previously issued to Crede is less than the total number of VWAP Shares to be issued to Crede
or its designee in connection with the Exchange Agreement, Crede may, in its sole discretion, deliver one or more written notices
to the Company, at any time and from time to time during the Calculation Period, requesting that a specified number of additional
shares of Common Stock promptly be issued and delivered to Crede or its designee (subject to the limitations described below),
and the Company will upon such request issue the number of additional shares of Common Stock requested to be so issued and delivered
in the notice (all of which additional shares shall be considered “Settlement Shares” for purposes of the Exchange
Agreement). At the end of the Calculation Period, (i) if the number of VWAP Shares exceeds the number of Settlement Shares issued,
then the Company will issue to Crede or its designee additional shares of Common Stock equal to the difference between the number
of VWAP Shares and the number of Settlement Shares, and (ii) if the number of VWAP Shares is less than the number of Settlement
Shares, then Crede or its designee will return to the Company for cancellation that number of shares of Common Stock equal to the
difference between the number of VWAP Shares and the number of Settlement Shares. Crede may sell the shares of Common Stock issued
to it or its designee in connection with the Exchange Agreement at any time without restriction, even during the Calculation Period.
The Exchange Agreement
provides that in no event shall the number of shares of Common Stock issued to Crede or its designee in connection with the Exchange
Agreement, when aggregated with all other shares of Common Stock then beneficially owned by Crede and its affiliates (as calculated
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and
regulations thereunder), result in the beneficial ownership by Crede and its affiliates (as calculated pursuant to Section 13(d)
of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.9% of the Common Stock.
Furthermore, the Exchange
Agreement provides that, from the date of execution of the Exchange Agreement until the day after the Calculation Period, the Company
is prohibited from issuing any equity, debt or convertible or other securities, other than (i) Common Stock to Crede pursuant to
the Exchange Agreement, (ii) up to 2,555,413 shares of Common Stock pursuant to the Company’s equity compensation plan, (iii)
shares of common or preferred stock pursuant to the Company’s shareholder rights plan, (iv) shares of Common Stock to Free
Bulkers S.A., the manager of the Company’s fleet, in lieu of cash compensation, (v) shares of Common Stock upon the conversion,
exchange or exercise of convertible securities issued prior to the date of the Exchange Agreement, or (vi) up to 7,5000,000 shares
of Common Stock (or $3,000,000 worth of Common Stock, which is greater) issued solely in exchange for the contribution of a nautical
vessel by an independent third party to the Company, provided that the primary purpose of such issuance is not to raise capital.
The issuance of Common
Stock to Crede pursuant to the terms of the Exchange Agreement will be exempt from the registration requirements of the Securities
Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the
terms and conditions of such issuance are approved by a court after a hearing upon the fairness of such terms and conditions to
the plaintiff at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear.
The description of
the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Exchange Agreement,
which is filed as Exhibit 99.1 to this report and incorporated herein by reference, and the Order.
The following exhibit
is filed herewith:
Exhibit
Number
|
Description
|
99.1
|
Exchange Agreement, dated September 26, 2013, by and between the Company and Crede
|
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
FREESEAS INC.
|
|
|
Date: October 1, 2013
|
By:
/s/ ALEXANDROS MYLONAS
|
|
Alexandros Mylonas
|
|
Chief Financial Officer
|
FreeSeas (CE) (USOTC:FREEF)
Historical Stock Chart
From Apr 2024 to May 2024
FreeSeas (CE) (USOTC:FREEF)
Historical Stock Chart
From May 2023 to May 2024