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As evidenced by the investments made in equipment and payroll,SBG remains committed to its <br /> business in South Bend. However,while the payroll requirement will be met,it is apparent that <br /> SBG will not meet both of the original requirements of an estimated$15,600,000 of equipment <br /> by February 14,2013 and$641,000 of payroll by February 13,2013. The difficulty in reaching <br /> the requirement is primarily due to three factors: 1)delays in bringing its initial manufacturing <br /> line into production;2)delays in bringing on the second line of manufacturing;and 3)a recent <br /> ownership transition. While the initial manufacturing line is now producing at acceptable levels <br /> and the ownership transition has been completed as of November 30,2012,it is anticipated that <br /> the second line of manufacturing will not begin until the third quarter of 2013. The original <br /> filing for the personal property tax abatement was predicated on this second manufacturing line. <br /> From SBG's perspective,the second line of manufacturing is not a question of"if'but"when". <br /> The deployment of the second manufacturing line continues to be critical to SBG's overall <br /> business plan. <br /> We understand through conversations with you that the appropriate course of action is to request <br /> an extension of time to enable SBG to meet its commitments. Accordingly,SBG hereby <br /> requests an extension of twelve months until February 14,2014 within which to meet its <br /> commitment to invest in the manufacturing equipment and new jobs,as specified in the <br /> Memorandum of Agreement dated February 21,2011. If the South Bend Common Council <br /> would like SBG to appear at a meeting in order for the extension to be granted,please advise of <br /> the preferred meeting date at your earliest convenience. While the day-to-day operations of SBG <br /> are managed locally,the ownership of SBG and its CEO reside in Italy,and we request adequate <br /> time to make any necessary travel plans. <br /> SBG firmly believes that the extension will provide the company the necessary additional time to <br /> meet its commitments to South Bend. SBG remains firmly committed to South Bend. Thank <br /> you for your consideration. <br /> Ye truly yours, <br /> rea Scanavini <br /> CEO <br /> South Bend Gear,LLC <br /> cc: <br /> Mr.Stephen J. Luecke,Mayor <br /> City of South Bend <br />