This excerpt taken from the BRY 10-Q filed Jul 25, 2008.
Title Defect Amounts. The Title Defect Amount resulting from a Title Defect (the "Title Defect Amount") shall be determined as follows:
(a) if Purchaser and Seller agree on the Title Defect Amount, that amount shall be the Title Defect Amount;
(b) if the Title Defect is a lien, encumbrance, or other such charge, then the Title Defect Amount shall be the amount necessary to be paid to remove the Title Defect from Seller's interest in the affected Overriding Royalty Interests;
(c) if the Title Defect represents a discrepancy between (i) the net revenue interest for any Overriding Royalty Interest and (ii) the net revenue interest or percentage stated on Exhibit B-2 with respect to such Overriding Royalty Interest, then the Title Defect Amount shall be the product of the Allocated Value of such Overriding Royalty Interest multiplied by a fraction, the numerator of which is the net revenue interest or percentage ownership decrease and the denominator of which is the net revenue interest or percentage ownership stated on Exhibit B-2, provided that if the Title Defect does not affect the Overriding Royalty Interest throughout its entire productive life, the Title Defect Amount determined under this Section 3.4(c) shall be reduced to take into account the applicable time period only;
(d) if the Title Defect represents an obligation, encumbrance, burden, or charge upon or other defect in title to the affected Overriding Royalty Interest of a type not described in subsections (a), (b),or (c) above, the Title Defect Amount shall be determined by taking into account the Allocated Value of the Overriding Royalty Interest so affected, the legal effect of the Title Defect, the potential economic effect of the Title Defect over the life of the affected Property to which the Overriding Royalty Interest relates, the values placed upon the Title Defect by Purchaser and Seller, and such other factors as are necessary to make a proper evaluation (including, without limitation, the reasonable cost to cure such Title Defect);
(e) notwithstanding anything to the contrary in this Article 3, (i) an individual claim for a Title Defect for which a claim notice is given in accordance with Section 3.3 shall not be considered to be a Title Defect pursuant to this Article 3 unless and until the Title Defect Amount with respect thereto exceeds One-Hundred Thousand dollars ($100,000), and (ii) with respect to any Title Defects entitled to an adjustment pursuant to subsection (i), unless and until the aggregate amount of such Title Defects exceed One-Million dollars ($1,000,000); and
(f) the Title Defect Amount with respect to a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Amount hereunder.