Ugh, are you sure you want to know?  :)

The issue with the indemnification clause is that it is worded very
strongly.  It suggests Apple can claim legal fees against all kinds of
people who have some vague connection to a modified version of Squeak. 
Note that this applies to all of us: we are all using a "modified"
version of Apple Squeak at this point.


==== the clause: =====
 5. Indemnification. You agree to indemnify and hold Apple harmless from any and all damages, liabilities, costs and expenses (including but not limited to attorneys' fees and costs of suit) incurred by Apple as a result of any claim, proceeding, and/or judgment to the extent it arises out of or is connected in any manner with the operation, use, distribution or modification of Modified Software, or the combination of Apple Software or Modified Software with other programs; provided that Apple notifies Licensee of any such claim or proceeding in writing, tenders to Licensee the opportunity to defend or settle such claim or proceeding at Licensee's expense, and cooperates with Licensee in defending or settling such claim or proceeding.
=============================

Note the "connected in any manner with the operation, use, distribution, or modification".  "connected in any manner" is extremely broad to begin with.  Further, there is nothing limiting the liability to the modifications; these people are liable for uses (distribution, etc.) of the entire "Modified Software", even the parts that are owned by Apple.

I admit, this is the first time I noticed "to the extent it arises", which does limit the effect considerably.  If someone makes another run at the Debian group, this phrase should be emphasized.  Even so, does this mean that if I give a copy of Squeak to someone who then uses it to break into a bank, am I liable because I gave them a copy?  Could "to the extent" mean that I am, say, 50% liable, because getting the weapon--Squeak--was half the work?  What about 5%?  That's already enough to be disastrous if the case is a big one.

Blah.  I really don't know.  I've read this and read this and I still am not sure what I have agreed to.  If we are not going to request Apple to relicense Squeak, it would help immensely to have some legal commentary on exactly what this means.


<grip>
Not that it helps at this point, but it sure would be simpler if Apple had simply put in a disclaimer!   I truly detest contracts that talk directly about who can sue whom, because they cross a meta level!  A proper contract should dileneate the agreement, and the courts should *always* be available.  Courts should talk about contracts, not the other way around.
</gripe>

IANAL.

-Lex