<PAGE>
 
8.4  Indemnities.

     8.4.1 Definition of Claims. As used in this Agreement, the term "Claims"
means any and all losses, liabilities, damages, obligations, expenses, fines,
penalties, costs, claims, causes of action and judgments for: (i) breaches of
contract; (ii) loss or damage to property, injury to or death of persons, and
other tortious injury; (iii) liability assessments due to strict liability of
which notice has been given by the relevant third party, and (iv) violations of
which notice has been given by the relevant third party of published, binding
and applicable laws, rules, regulations, orders or any other legal right or duty
actionable at law or equity. The term "CLAIMS" also includes reasonable
attorneys' fees and court costs resulting from the defense of any claim or cause
of action within the scope of the indemnities in this Agreement.

     8.4.2 Application of Indemnities. All indemnities set forth in this
Agreement extend to the officers, directors, employees and affiliates of the
party indemnified. The indemnities set forth in this Agreement do not extend to
any part of an indemnified Claim to the extent caused by the gross negligence,
willful misconduct or fraud of the indemnified party or the result of the
imposition of punitive damages on the indemnified party.

     8.4.3 Seller's Indemnity. To the extent that a Buyer is not otherwise
reimbursed pursuant to indemnification provisions of Contracts or covenants and
warranties (including warranties of title) by preceding owners, vendors or
others, that have been conveyed, transferred and assigned to such Buyer in
connection with this Agreement, Seller shall indemnify, defend and hold each
Buyer harmless from and against any and all Claims caused by, resulting from or
incidental to Seller's Retained Obligations described in Section 8.3 of this
Agreement, to the extent such Claims relate to the portion of the Assets
transferred to such Buyer.

     8.4.4 Buyer's Indemnity. Each Buyer shall indemnify, defend and hold Seller
harmless from and against any and all Claims caused by, resulting from or
incidental to such Buyer's Assumed Obligations set forth in Section 8.2 of this
Agreement, to the extent such Claims relate to the portion of the Assets
transferred to such Buyer.

     8.4.5 Notices and Defense of Claims. Each party shall immediately notify
the other affected party of any Claim of which it becomes aware and for which it
is entitled to indemnification from the other party under this Agreement. The
indemnifying party shall be obligated to defend at the indemnifying party's sole
expense any litigation or other administrative or adversarial proceeding against
the indemnified party relating to any Claim for which the indemnifying party has
agreed to indemnify and hold the indemnified party harmless under this
Agreement.

                                       25