GPL and WINE licence compatible?

[Colin Watson <cjw44@flatline.org.uk>]

I was about to ITP icoutils (http://www.student.lu.se/~nbi98oli/src/),
but I had a last-minute worry about the licence. It's mostly GPL, except
that some files in the source are distributed under the Wine licence.
Most of this seems to be OK (largely BSDish with no advertising clause),
but I'm concerned about section (3) of the first paragraph. I initially
read it as one set of conditions under which one could distribute in
source or binary-only form, and that the set of conditions in the second
paragraph would be the ones that would apply to Debian. However, the
second paragraph only mentions sources, and we distribute binaries too.
Is this something which would bar us from distributing icoutils?

The current version of Wine in Debian carries the X11 licence, so if
this turned out to be a problem then perhaps I could just create a new
source package with those newer include files instead (or, better, talk
to the upstream author about it).

Here's the copy of the Wine licence included in the icoutils sources:

  You may without charge, royalty or other payment, copy and
  distribute copies of this work and derivative works of this work
  in source or binary form provided that: (1)
  you appropriately publish on each copy an appropriate copyright
  notice; (2) faithfully reproduce all prior copyright notices
  included in the original work (you may also add your own
  copyright notice); and (3) agree to indemnify and hold all prior
  authors, copyright holders and licensors of the work harmless
  from and against all damages arising from use of the work.

  You may distribute sources of derivative works of the work
  provided that (1) (a) all source files of the original work that
  have been modified, (b) all source files of the derivative work
  that contain any party of the original work, and (c) all source
  files of the derivative work that are necessary to compile, link
  and run the derivative work without unresolved external calls and
  with the same functionality of the original work (``Necessary
  Sources'') carry a prominent notice explaining the nature and date
  of the modification and/or creation.  You are encouraged to make
  the Necessary Sources available under this license in order to
  further the development and acceptance of the work.

I'd appreciate any opinions you might have on this.

Thanks,

-- 
Colin Watson                                     [cjw44@flatline.org.uk]