SAN JUAN BASIN ROYALTY TRUST
INDEMNIFICATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.(A)
<SEQUENCE>3
<FILENAME>d05906exv10wxay.txt
<DESCRIPTION>INDEMNIFICATION AGREEMENT
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                                                                   EXHIBIT 10(a)

                                                                  EXECUTION COPY

                            INDEMNIFICATION AGREEMENT

         This INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of the 13th day of May, 2003, with effectiveness as of July 30, 2002, by
and between San Juan Basin Royalty Trust, a trust organized under the laws of
the State of Texas (including any successors thereto, the "Trust"), and Lee Ann
Anderson ("Indemnitee").

                                    RECITALS:

         1. TexasBank, a bank chartered under the laws of the State of Texas
(the "Bank"), serves as trustee of the Trust pursuant to the terms of that
certain Amended and Restated Royalty Trust Indenture, dated September 30, 2002,
between Burlington Resources Oil & Gas Company LP and the Bank (the
"Indenture").

         2. Indemnitee is an officer of the Bank and is primarily responsible
for managing the day-to-day activities of the Trust.

         3. Competent and experienced persons (such as Indemnitee) are reluctant
to serve or to continue to serve institutions (such as the Trust and the Bank)
as directors, officers, or in other capacities unless they are provided with
adequate protection through insurance or indemnification (or both) against
claims and actions against them arising out of their service to and activities
on behalf of those institutions.

         4. The current uncertainties relating to the availability of adequate
insurance have increased the difficulty for institutions to attract and retain
competent and experienced persons.

         5. The reluctance of knowledgeable and experienced persons to serve
institutions has increased since the passage of the Sarbanes-Oxley Act on July
30, 2002, which imposed additional civil and criminal penalties for such persons
acting in their individual capacities.

         6. The Bank, in its capacity as trustee of the Trust, has determined
that the continuation of present trends in litigation will make it more
difficult to attract and retain competent and experienced persons to manage the
day-to-day affairs of the Trust, that this situation is detrimental to the best
interests of the Trust's unit holders, and that the Trust should act to assure
the employees of the Bank who manage the operations of the Trust, including the
Indemnitee, that there will be increased certainty of adequate protection in the
future.

         7. It is reasonable, prudent, and necessary for the Trust to obligate
itself contractually to indemnify the employees of the Bank who manage the
operations of the Trust, including the Indemnitee, to the fullest extent
permitted by applicable law in order to induce them to serve or continue to
serve the Trust.

         8. Indemnitee is willing to serve and continue to serve the Trust on
the condition that she be indemnified to the fullest extent permitted by law,
including, but not limited to, any actions taken individually on behalf of the
Trust or for the Bank in its capacity as trustee of the Trust.


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                                   AGREEMENTS:

         NOW, THEREFORE, in consideration of the foregoing premises,
Indemnitee's agreement to serve or continue to serve as a director or officer of
the Bank and to be primarily responsible for managing the day-to-day activities
of the Trust, and the covenants contained in this Agreement, the Trust and
Indemnitee hereby covenant and agree as follows:

         1. Certain Definitions.

         For purposes of this Agreement:

         (a) Affiliate: shall mean any Person that directly, or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with the Person specified.

         (b) Change of Control: shall mean the occurrence of any of the
following events:

             (i) The acquisition after the date of this Agreement by any
individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the units of beneficial interest of the Trust
(the "Outstanding Units");

             (ii) TexasBank ceases for any reason to be the trustee of the
Trust; or

             (iii) Consummation of a sale, lease, exchange, or other
disposition of all or substantially all of the assets of the Trust to any
Person.

         (c) Claim: shall mean any threatened, pending, or completed action,
suit, or proceeding (including, without limitation, securities laws actions,
suits, and proceedings and also any cross claim or counterclaim in any action,
suit, or proceeding), whether civil, criminal, arbitral, administrative, or
investigative in nature, or any inquiry or investigation (including discovery),
whether conducted by the Trust or any other Person, that Indemnitee in good
faith believes might lead to the institution of any action, suit, or proceeding.

         (d) Expenses: shall mean all costs, expenses (including attorneys' and
expert witnesses' fees), and obligations paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
being a witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
Indemnifiable Event.

         (e) Indemnifiable Event: shall mean any actual or alleged act,
omission, statement, misstatement, event, or occurrence arising out of or
related to Indemnitee's day-to-day management of the Trust's affairs, or by
reason of any actual or alleged thing done or not done by Indemnitee in any such
capacity (i) on behalf of the Trust or the Bank in its capacity as trustee of
the Trust or (ii) for the benefit of the Trust or the Trust's unit holders while
the Bank is trustee of the Trust.



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         (f) Indemnifiable Liabilities: shall mean all Expenses and all other
liabilities, damages (including, without limitation, punitive, exemplary, and
the multiplied portion of any damages), judgments, payments, fines, penalties,
amounts paid in settlement, and awards paid or incurred that arise out of, or in
any way relate to, any Indemnifiable Event.

         (g) Potential Change of Control: shall be deemed to have occurred if
(i) the Trust enters into an agreement, the consummation of which would result
in the occurrence of a Change of Control or (ii) any Person publicly announces
an intention to take or to consider taking actions that, if consummated, would
constitute a Change of Control.

         (h) Reviewing Party: shall mean (i) an officer of the Bank (acting in
its capacity as trustee of the Trust) who is not a party to the particular Claim
for which Indemnitee is seeking indemnification or (ii) if a Change of Control
has occurred and Indemnitee so requests, or if the Bank in its capacity as
trustee of the Trust so elects, or if the Bank is a party to such Claim, Special
Counsel.

         (i) Special Counsel: shall mean special, independent legal counsel
selected by Indemnitee and approved by the Trust (which approval shall not be
unreasonably withheld), and who has not otherwise performed material services
for the Trust or for Indemnitee within the last three years (other than as
Special Counsel under this Agreement or similar agreements).

         2. Indemnification and Expense Advancement.

         (a) The Trust shall indemnify Indemnitee and hold Indemnitee harmless
to the fullest extent permitted by law, as soon as practicable but in any event
no later than 30 days after written demand is presented to the Trust, from and
against any and all Indemnifiable Liabilities. Notwithstanding the foregoing,
the obligations of the Trust under Section 2(a) shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which Special Counsel is involved) that Indemnitee is
not permitted to be indemnified under applicable law. Any determination under
this Section 2(a) shall be made promptly by the Reviewing Party.

         (b) If so requested by Indemnitee, the Trust shall advance to
Indemnitee all reasonable Expenses incurred by Indemnitee to the fullest extent
permitted by law (or, if applicable, reimburse Indemnitee for any and all
reasonable Expenses incurred by Indemnitee and previously paid by Indemnitee)
within ten business days after such request (an "Expense Advance"). The Trust
shall be obligated from time to time at the request of Indemnitee to make or pay
an Expense Advance in advance of the final disposition or conclusion of any
Claim. In connection with any request for an Expense Advance, if requested by
the Trust, Indemnitee or Indemnitee's counsel shall submit an affidavit stating
that the Expenses to which the Expense Advances relate are reasonable. Any
dispute as to the reasonableness of any Expense shall not delay an Expense
Advance by the Trust. If, when, and to the extent that the Reviewing Party
determines that (i) Indemnitee would not be permitted to be indemnified with
respect to a Claim under applicable law or (ii) the amount of the Expense
Advance was not reasonable, the Trust shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Trust without interest
(which agreement shall be an unsecured obligation of Indemnitee) for (x) all
related Expense Advances theretofore made or paid by the Trust in the event that
it is



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determined that indemnification would not be permitted or (y) the excessive
portion of any Expense Advances in the event that it is determined that such
Expenses Advances were unreasonable, in either case, if and to the extent such
reimbursement is required by applicable law; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee could be indemnified under applicable
law, or that the Expense Advances were reasonable, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be indemnified under
applicable law or that the Expense Advances were unreasonable shall not be
binding, and the Trust shall be obligated to continue to make Expense Advances,
until a final judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or lapsed), which
determination shall be conclusive and binding. If there has been a Change of
Control, the Reviewing Party shall be Special Counsel, if Indemnitee so
requests. If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively is not permitted to be
indemnified in whole or part under applicable law or that any Expense Advances
were unreasonable, Indemnitee shall have the right to commence litigation in any
court in the state of Texas having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof,
and the Trust hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Trust and Indemnitee.

         (c) Nothing in this Agreement, however, shall require the Trust to
indemnify Indemnitee with respect to any Claim initiated by Indemnitee, other
than a Claim solely seeking enforcement of the Trust's indemnification
obligations to Indemnitee or a Claim authorized by the Bank acting in its
capacity as trustee of the Trust.

         3. Change of Control. The Trust agrees that, if there is a Potential
Change in Control or a Change of Control and if Indemnitee requests in writing
that Special Counsel be the Reviewing Party, then Special Counsel shall be the
Reviewing Party. In such a case, the Trust agrees not to request or seek
reimbursement from Indemnitee of any indemnification payment or Expense Advances
unless Special Counsel has rendered its written opinion to the Trust and
Indemnitee that the Trust was not or is not permitted under applicable law to
indemnify Indemnitee or that such Expense Advances were unreasonable. However,
if Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee could be indemnified
under applicable law or that the Expense Advances were reasonable, any
determination made by Special Counsel that Indemnitee would not be permitted to
be indemnified under applicable law or that the Expense Advances were
unreasonable shall not be binding, and the Trust shall be obligated to continue
to make Expense Advances, until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefore have been exhausted
or lapsed), which determination shall be conclusive and binding. The Trust
agrees to pay the reasonable fees of Special Counsel and to indemnify Special
Counsel against any and all expenses (including attorneys' fees), claims,
liabilities, and damages arising out of or relating to this Agreement or Special
Counsel's engagement pursuant hereto.

         4. Indemnification for Additional Expenses. The Trust shall indemnify
Indemnitee against any and all costs and expenses (including attorneys' and
expert witnesses' fees) and, if requested by Indemnitee, shall (within two
business days of that request) advance those costs and



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expenses to Indemnitee, that are incurred by Indemnitee if Indemnitee, whether
by formal proceedings or through demand and negotiation without formal
proceedings: (a) seeks to enforce Indemnitee's rights under this Agreement, (b)
seeks to enforce Indemnitee's rights to expense advancement or indemnification
under any other agreement, including, without limitation, the Indenture, now or
hereafter in effect relating to Claims for Indemnifiable Events, or (c) seeks
recovery under any directors' and officers' liability insurance policies
maintained by the Bank or the Trust, in each case regardless of whether
Indemnitee ultimately prevails; provided that a court of competent jurisdiction
has not found Indemnitee's claim for indemnification or expense advancements
under the foregoing clauses (a), (b) or (c) to be frivolous, presented for an
improper purpose, without evidentiary support, or otherwise sanctionable under
Federal Rule of Civil Procedure No. 11 or an analogous rule or law, and provided
further, that if a court makes such a finding, Indemnitee shall reimburse the
Trust for all amounts previously advanced to Indemnitee pursuant to this Section
4. Subject to the provisos contained in the preceding sentence, to the fullest
extent permitted by law, the Trust waives any and all rights that it may have to
recover its costs and expenses from Indemnitee.

         5. Partial Indemnity. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Trust for some, but not all, of
Indemnitee's Indemnifiable Liabilities, the Trust shall indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.

         6. Contribution.

         (a) Contribution Payment. To the extent the indemnification provided
for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, the Trust, in
lieu of indemnifying Indemnitee, shall, to the extent permitted by law,
contribute to the amount of any and all Indemnifiable Liabilities incurred or
paid by Indemnitee for which such indemnification is not permitted. The amount
the Trust contributes shall be in such proportion as is appropriate to reflect
the relative fault of Indemnitee, on the one hand, and of the Trust and any and
all other parties who may be at fault (collectively, including the Trust, the
"Third Parties"), on the other hand.

         (b) Relative Fault. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
Indemnitee as determined by the court or other governmental agency or (ii) to
the extent such court or other governmental agency does not apportion relative
fault, by the Reviewing Party after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or
correct the relevant events, of each party, and other relevant equitable
considerations. The Trust and Indemnitee agree that it would not be just and
equitable if contribution were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable considerations
referred to in this Section 6(b).

         7. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified under any provision of this Agreement or to receive contribution
pursuant to Section 6 of this Agreement, to the extent permitted by law the
burden of proof shall be on the Trust to establish that Indemnitee is not so
entitled.



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         8. No Presumption. For purposes of this Agreement, the termination of
any Claim by judgment, order, settlement (whether with or without court
approval), or conviction, or upon a plea of nolo contendere, or its equivalent,
or an entry of an order of probation prior to judgment shall not create a
presumption (other than any presumption arising as a matter of law that the
parties may not contractually agree to disregard) that Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable law.

         9. Non-exclusivity. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Indenture or the laws
of the State of Texas or otherwise. To the extent that a change in the laws of
the State of Texas (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by that change. Indemnitee's
rights under this Agreement shall not be diminished by any amendment to the
Indenture, or of any other agreement or instrument to which Indemnitee is not a
party, and shall not diminish any other rights that Indemnitee now or in the
future has against the Bank or the Trust.

         10. Liability Insurance. Except as otherwise agreed to by the Trust and
Indemnitee in a written agreement, to the extent the Trust maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Person under such policy.

         11. Period of Limitations. No action, lawsuit, or proceeding may be
brought against Indemnitee or Indemnitee's spouse, heirs, executors, or personal
or legal representatives, nor may any cause of action be asserted in any such
action, lawsuit, or proceeding, by or on behalf of the Trust, after the
expiration of two years after the statute of limitations commences with respect
to Indemnitee's act or omission that gave rise to the action, lawsuit,
proceeding, or cause of action; provided, however, that, if any shorter period
of limitations is otherwise applicable to any such action, lawsuit, proceeding,
or cause of action, the shorter period shall govern.

         12. Amendments. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any provision of this Agreement shall be effective unless
in a writing signed by the party granting the waiver. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall that waiver
constitute a continuing waiver.

         13. Other Sources. Indemnitee shall not be required to exercise any
rights that Indemnitee may have against any other Person (for example, under an
insurance policy) before Indemnitee enforces his rights under this Agreement.
However, to the extent the Trust actually indemnifies Indemnitee or advances her
Expenses, the Trust shall be subrogated to the rights of Indemnitee and shall be
entitled to enforce any such rights which Indemnitee may have against third
parties. Indemnitee shall assist the Trust in enforcing those rights if it pays
her costs and expenses of doing so. If Indemnitee is actually indemnified or
advanced Expenses by any third party, then, for so long as Indemnitee is not
required to disgorge the amounts so received, to that



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extent the Trust shall be relieved of its obligation to indemnify Indemnitee or
advance Indemnitee Expenses.

         14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by merger or
consolidation), spouses, heirs, and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as an officer or director of the Bank or manage the day-to-day operations
of the Trust.

         15. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, that provision shall be fully severable; this Agreement shall
be construed and enforced as if that illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of that illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement a provision as similar
in terms to the illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.

         16. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws.

         17. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         18. Notices. Whenever this Agreement requires or permits notice to be
given by one party to the other, such notice must be in writing to be effective
and shall be deemed delivered and received by the party to whom it is sent upon
actual receipt (by any means) of such notice. Receipt of a notice by the Bank
shall be deemed receipt of such notice by the Trust.

         19. Complete Agreement. This Agreement constitutes the complete
understanding and agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings between the
parties with respect to the subject matter hereof, other than any
indemnification rights that Indemnitee may enjoy under the Indenture or the laws
of the State of Texas.

         20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart.

                            [Signature page follows]





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EXECUTED as of the date first written above.

                                  SAN JUAN BASIN ROYALTY TRUST

                                  BY:  TEXASBANK, AS TRUSTEE


                                  By: /s/ W. D. CRANZ, JR.
                                      -----------------------------------------

                                  Name: W. D. Cranz, Jr.
                                       ----------------------------------------

                                  Title: Executive Vice President
                                        ---------------------------------------

                                  INDEMNITEE


                                   /s/ LEE ANN ANDERSON
                                  ---------------------------------------------
                                  LEE ANN ANDERSON






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