CONSENT AND SUBORDINATION AGREEMENT RECITALS

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2 EXHIBIT A to Minute Order THE STATE OF TEXAS COUNTY OF BRAZORIA CONSENT AND SUBORDINATION AGREEMENT This Consent and Subordination Agreement ( Agreement ) is entered into and made to be effective ( Effective Date ) as of the date of execution below by the State of Texas (the State ), acting through the Texas Transportation Commission and on behalf of the Texas Department of Transportation. RECITALS A. The Dow Chemical Company ( Dow ) entered into an easement agreement ( State Easement ) dated February 18, 1960, recorded in Volume 761, Page 150, of the Deed Records of Brazoria County, Texas, whereby it granted to the State an easement across 2.08 acres of land, more or less, for the purpose of constructing and maintaining a permanent road or state highway ( State Easement Tract ). B. Dow entered into an Easement and Right of Way ( Original Easement ) dated September 4, 2007, recorded under Clerk s File No , Official Records of Brazoria County, Texas, with the Velasco Drainage District ( Velasco ) whereby it granted to Velasco an easement and right-of-way to construct, maintain, inspect, operate, and repair a drainage ditch, levee, and any other drainage improvements, equipment, and structures upon, over, under, through and across seven (7) parcels of land in Brazoria County, Texas. C. Dow and Velasco entered into an Amendment to Easement ( Amendment, and collectively with the Original Easement, the Velasco Levee Easement ) dated August 3, 2017, recorded under Clerk s File No , whereby the Original Easement was amended to add two (2) additional parcels of land in Brazoria County, Texas, of which one (1) parcel consists of a 0.43 acre tract ( 0.43 Acre Tract ) out of the State Easement Tract, which is the SH 332 Right-of-Way. The 0.43 Acre Tract is more particularly described in Exhibit A, attached hereto and incorporated herein. The drainage ditch, levee and other drainage improvements, equipment, and structures of Velasco located within the 0.43 Acre Tract pursuant to the Velasco Easement are herein collectively referred to as the Facilities. D. The Velasco Drainage District was re-created in 1962 by Texas Senate Bill No. 33 as an independent political division of Brazoria County, under the Fresh Water Supply District Laws. E. C.F.R (d) 1986 requires that all maintenance activities for a levee system must be under the jurisdiction of a Federal or State agency, an agency created by Federal or

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4 EXHIBIT A to Minute Order of Engineers (USACE) levee crossing permit under 33 USC 408 will be considered conclusive evidence of reasonable use by the State. Such use by the State includes the right to place crossings over and across the 0.43 Acre Tract so long as such crossings are of sufficient size as to not unreasonably interfere with or endanger the Facilities within the 0.43 Acre Tract. The State specifically reserves the right to continue to own, use, maintain and control the highway right-of-way for highway purposes over and across the 0.43 Acre Tract pursuant to the State Easement. Said highway purposes include, amongst others, the power to collocate utilities within the State Easement. In connection with this subordination, the State agrees that before it materially alters, modifies, relocates, repairs, changes or removes any of its existing facilities in the 0.43 Acre Tract, or constructs or installs any additional facilities in such tract, it will notify Velasco of such impending work and arrange a procedure reasonably acceptable to Velasco which will adequately preserve the flood protection capabilities of the Facilities operated by Velasco within the 0.43 Acre Tract. The aforesaid sentence will not, however, operate to prevent or impede the immediate repair of the State s highway facilities in the 0.43 Acre Tract, without notice to Velasco, if such repair is required as a result of accident, catastrophe, or other emergency, or in order to protect life and property. The State agrees to perform such work quickly, with due regard to the possibility of an impending or hurricane or flood, and in a workmanlike manner, and to restore the highway facilities to substantially the condition as existed prior to such work. 3. Routine Maintenance. Routine highway maintenance activities which do not materially impact the Facilities, such as metal beam guard fence installation or repairs, concrete traffic barrier installation or maintenance, mowing, striping, mill and inlay, resurfacing, crack seal, roadway repairs including full depth repairs, sweeping, tree trimming, edge backfill or high edge removal, may be performed by the State without notice to Velasco. 4. Reimbursement. Velasco and the State each acknowledge that future changes in legal or regulatory requirements governing the Velasco Facilities within the State Easement Tract may result in alterations or modifications being required to the then existing improvements which lawfully occupy the State Easement Tract. Velasco and the State agree that any resulting alterations or modifications to such improvements within the State Easement Tract will be made at the expense of Velasco, which will promptly reimburse the reasonable costs upon receipt of invoices therefor. 5. Entire Agreement. This Agreement contains the entire agreement and understanding of the State relating to the subject matter of this Agreement, and all previous or contemporaneous representations, statements, agreements and understandings

5 EXHIBIT A to Minute Order relating to such subject matter, whether written or oral, are merged herein. This Agreement may not be amended or modified except by a written instrument executed by the State. 6. Full Force and Effect. Save for the consent and subordination of the State contained herein, all of the terms of the State Easement remain in full force and effect. 7. Miscellaneous. This Agreement will be governed by and construed under the laws of the State of Texas. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK-SIGNATURE PAGE FOLLOWS]

6 EXHIBIT A to Minute Order IN TESTIMONY WHEREOF, I have caused the Seal of the State to be affixed. EXECUTED THIS DAY OF, Greg Abbott Governor of Texas Attest: Rolando B. Pablos Secretary of State NOTE TO COUNTY CLERK: PROPERTY CODE AUTHORIZES THE RECORDATION OF THIS INSTRUMENT WITHOUT ACKNOWLEDGMENT OR FURTHER PROOF OF THE SIGNATURE OF THE GOVERNOR.

7 EXHIBIT B to Minute Order

8 EXHIBIT B to Minute Order

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10 To: Through: From: Mary Anne Griss Director of Commission Support Kyle Madsen, J.D. Deputy Director, ROW Darby F. Venza ROW Attorney MEMO February 7, 2018 Subject: Consent and Subordination Agreement with Velasco Drainage District SH 332 as it crosses the Velasco Drainage District Levee, Brazoria County The Velasco Drainage District (Velasco) operates an existing levee system that protects the Brazosport Area which includes the cities of Lake Jackson, Freeport, Clute, Oyster Creek and many industrial areas like Dow Chemical, Phillips 66, BASF, Shintech, Freeport LNG. This levee system also protects the Port of Freeport and a Department of Energy Oil Storage Site. After Hurricane Katrina, FEMA notified the Velasco Drainage District that this levee system would have to become certified under the requirements of 44 CFR or it would be removed from the new Flood Maps when they were published. The Code of Federal Regulations requires, as a condition of certification, that a levee system be under the jurisdiction of the agency with the ultimate maintenance responsibility. This requires that Velasco obtain the superior right to the property upon which its levee is located. Currently, TxDOT owns a State Highway easement to SH 332 which is superior to Velasco s levee easement in the area in which they intersect. Velasco has spent over 5 million dollars in furtherance of obtaining its FEMA certification. Velasco approached TxDOT ROW Division with a request to subordinate a portion of the existing SH 332 highway easement which crosses the Brazos River Levee in Brazoria County, Texas, so that it may meet the FEMA certification requirements. The SH 332 subordination agreement is the last extant crossing agreement. No physical change to the existing intersection of highway and levee is currently proposed. TxDOT would retain the right to operate and maintain a highway, but would not be able to interfere with Velasco s superior right to operate a levee. TxDOT has specific statutory authority to engage in this transaction under Texas Government Code Chapter 2204, Subchapter C. TxDOT has entered into agreements of this type before for other portions of this levee system. See for example Minute Order 73300, from September 28, OUR VALUES: People Accountability Trust Honesty OUR MISSION: Through collaboration and leadership, we deliver a safe, reliable, and integrated transportation system that enables the movement of people and goods. An Equal Opportunity Employer