FreeSeas Announces Execution of Standby
Equity Distribution Agreement

ATHENS, Greece, May 15, 2012

FreeSeas Inc. FREE +6.94% ("FreeSeas" or the "Company"), a transporter of dry-bulk cargoes through the ownership and operation of a fleet of Handysize and Handymax vessels, today announced that it has entered into a Standby Equity Distribution Agreement ("SEDA"), with YA Global Master SPV Ltd. ("YA Global"), a fund managed by Yorkville Advisors, LLC ("Yorkville").

Under the terms and conditions of the SEDA, the Company has the right, but not the obligation, to sell, and YA Global will be obligated to purchase, up to $3.2 million of common stock in tranches, at the Company's sole discretion, over the course of 24 months.

The SEDA permits the Company to terminate the agreement, upon 15 days' prior written notice, at any time when no advances are pending. The Company intends to use the net proceeds from the SEDA for general corporate purposes.

About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal offices in Athens, Greece. FreeSeas is engaged in the transportation of drybulk cargoes through the ownership and operation of drybulk carriers. Currently, it has a fleet of Handysize and Handymax vessels. FreeSeas' common stock trades on the NASDAQ Global Market under the symbol FREE. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at http://www.sec.gov . For more information about FreeSeas Inc., please visit the corporate website, www.freeseas.gr .

FreeSeas Inc. press release