Dependence on Spot Charters Sample Clauses

Dependence on Spot Charters. As set forth above, Eagle currently operates a fleet of forty-five (45) owned Vessels, of which 44 are employed for less than one year as of December 31, 2013, exposing it to fluctuations in spot market charter rates. Historically, the dry bulk market has been volatile as a result of the many conditions and factors that can affect the price, supply, and demand for dry bulk capacity. The continuing global economic crisis may further reduce demand for transportation of dry bulk cargoes over longer distances and supply of dry bulk vessels to carry such dry bulk cargoes, which may materially affect the Debtor’s revenues, profitability, and cash flows. The spot charter market may fluctuate significantly based upon supply of, and demand for, vessels and cargoes. The successful operation of Eagle’s Vessels in the competitive spot charter market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot rates have declined below the operating cost of vessels. If future spot charter rates decline, then Eagle may be unable to operate its Vessels trading in the spot market profitably, meet its obligations, including payments on indebtedness, or to pay dividends, if any, in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks, during periods in which spot charter rates are rising, Eagle will generally experience delays in realizing the benefits from such increases. As of the date hereof, all forty-five (45) of Eagle’s Vessels are currently on charter. Thirty-seven (37) of the charters are scheduled to expire during 2014 and the remaining eight (8) are scheduled to expire during the first quarter of 2015. Eagle’s ability to renew the charters, and the charter rates payable under any such replacement charters, will depend upon, among other things, economic conditions in the sectors in which Eagle’s Vessels operate at that time, changes in the supply of and demand for vessel capacity, and changes in the supply of and demand for the seaborne transportation of energy resources.
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