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SUBORDINATION AGREEMENT <br />THIS AGREEMENT is between THE WAMSLEY CATTLE COMPANY, a <br />Colorado corporation, hereinafter called "Wamsley ", THE STATE OF <br />COLORADO FOR THE USE AND BENEFIT OF THE DEPARTMENT OF NATURAL <br />RESOURCES (Colorado Water Conservation Board), hereinafter called <br />the "Colorado Water Conservation Board ", FARM CREDIT BANK OF <br />WICHITA, formerly known as The Federal Land Bank of Wichita, <br />hereinafter called "Farm Credit Bank ", and is for good and valuable <br />consideration as follows: <br />1. This Agreement is contingent upon the written approval of <br />the Bankruptcy Court in Case No. 88 B 1•2833A, Chapter 12, now <br />- -pending in the United States Bankruptcy Court for the District of <br />Colorado and shall not be effective until approved. <br />2. The Farm Credit Bank is holder of a First Farm and Ranch <br />Mortgage dated February 15, 1982, and recorded on March 23, 1982, <br />in Book 146 beginning at Page 709 of the records of Jackson County, <br />State of Colorado, and an Additional Collateral Security Agreement <br />dated July 15, 1991, and recorded September 17, 1991, in Book 168 <br />beginning at Page 745, both securing a debt in the original amount <br />of $782,000.00 and covering the property described on Exhibits "A" <br />and "B" attached hereto and incorporated by reference herein, <br />excluding any land- described in partial releases of record. <br />It is agreed that the reservoir, its appurt s, i h <br />rights pertaining to it, improvements, water right e az s <br />are encumbered by the mortgage to the Farm Cred' <br />3. That Wamsleys heretofore filed a Chapter 2 tcy in <br />the United States Bankruptcy Court for the Distrir Colorado <br />under Case No. 88 B 12833A, Chapter 12. <br />4. That Wamsleys own a ranch in Jackson CouAy and on_that <br />ranch is a reservoir known as the Pole Mountain Reservoir which has <br />a Decree for 1905.2 acre feet. The Decree is dated December 10, <br />1971. This reservoir is in need of repair. Wamsleys have a <br />proposed contract with the State of Colorado (the Colorado Water <br />Conservation Board) which will make available $45,000 under the <br />terms of that agreement to rehabilitate the Pole Mountain dam and <br />reservoir facilities. The project has been approved by the State <br />of Colorado acting through the Department of Natural Resources and <br />the Colorado Water Conservation Board. The State will be repaid <br />over 40 years, if not sooner, in annual payments, and will receive <br />a promissory note secured by a Deed of Trust to secure this indebt- <br />edness. The form which will be used is the Bradford Publishing <br />Deed of Trust (short form) No. 923C rev. 1-86. The State desires <br />to have a first lien on the reservoir property, and Farm Credit <br />EXHIBIT B -2 <br />