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PEACE BRIDGE UNDERSTANDING

These understandings provide a road map forward for the Peace Bridge and have beenreached by representatives of the governments of Canada and New York State. It isunderstood that where steps listed in this document require the approval of the PeaceBridge Authority, they are contingent on the decisions of its Board of Directors as a bi-national body.

The Peace Bridge performs as a single enterprise with a presence and operation on boththe Buffalo (US) and Fort Erie (Canada) side, and to optimize the Bridges performance,both plazas must be developed and improved to their fullest.

The development of the Buffalo side of the bridge will be prioritized to improve the USPlaza area and the pre-inspection pilot program will be aggressively pursued to move theinspection booths to the Canada side of the bridge, opening the US Plaza and alleviatingcongestion.

In general, the participants will proceed with three independent and distinct project areasimmediately and simultaneously: The study of, followed by the EIS preparation for, theUS Plaza widening; the pre-inspection pilot; and US Plaza improvement projects forwhich an environmental review or EIS where applicable and undertaken by theappropriate entity being the PBA and/or New York State and its agencies is unnecessary,underway or completed, and which will be accelerated.

The participants understand that each of these projects addresses particular needs, hasindependent utility and is not dependent on or determinative of any other project. Eachproject already has its own environmental review track, which will proceed (or not) asrequired.

Therefore, in reliance on the representations of each other and on the provisions herein,the participants agree as follows:

1. US Plaza Enhancement and Widening Project

The PBA will immediately initiate a comprehensive traffic study of the US plaza in anexpeditious manner, with the assistance of NYS as agreed, to evaluate the current trafficconfiguration.

Based on the results of the traffic study, the PBA and NYS shall jointly develop a planfor improving traffic flow, improving the Plaza, including Plaza widening if that isrecommended by the study to reduce congestion or reduce neighborhood impacts.

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Gateway Ramp Project

NYS shall proceed on an expedited basis with Gateway Ramp Project, which is designedto provide a direct connection from the Plaza to I-190 NB, eliminate the Plaza exit onto

Baird Drive and remove Baird Drive from Front Park, and create a new entrance to thePlaza at Porter Avenue for all traffic coming from City streets. NYSDOT hascommenced the environmental review process under NEPA. The estimated cost is $22million funded by $15.8 million in federal highway funds and $6 million in NY Worksfunds.

Projected Schedule: Record of decision April 2014, Design Build contract: notice toproceed May 2014, construction completion December 2015.

Customs Warehouse Project

The PBA shall proceed with the Customs Warehouse Project, which will provide a smalladdition to a 1960s-era building and provide upgrades to meet post-9/11 securityrequirements and improve energy efficiency. The environmental review process has beencompleted by the GSA and the PBA. The estimated cost is $22.5 million funded byPBA.

Projected Schedule: The Customs Warehouse Project is acknowledged to be a toppriority for the PBA and will be completed as soon as possible.

Approach Widening Project

The PBA shall proceed with the Approach Widening Project on the U.S. end of thebridge, which will provide for better separation of truck traffic from automobile traffic,improve the flow of traffic to Nexus booths, and provide a staging area for eventual re-decking of the bridge. The environmental review process has been completed by thePBA. The estimated cost is $13 million funded by PBA.

Projected Schedule: Early Construction package (foundation design andparking): Notice to proceed June 2013, completion December 2013 on a best effortsbasis (approximately $1 million); Remaining Construction package is acknowledged tobe a top priority for the PBA and is to be completed as soon as possible.

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