individual.

A. Well, I would -- I would say that perhaps Otis Wilson had discussed it with them.

Q. Okay.

A. I do not recall having a conversation with the University with -- regarding the paragraph.

Q. Okay. Why don't you look through this briefly and tell me whether you have any specific recollection of having communications with the University of California regarding any paragraph in this document? I know we're short on time, but if you could do that for me I would appreciate it.

A. I really do not recall having any -- any conversation with anyone at the University regarding this agreement.

Q. How about any conversation with anybody within AT and T regardng any of these provisions in this draft agreement?

A. (No verbal response.)

Q. Do you have any specific recollection of having any conversations in 1984 with anybody at AT and AT, about any of these provisions?

A. Let me start from the -- I recall talking with -- with the attorney that I primarily worked with within AT and T -- we had three attorneys -- regarding the

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proper credit and recognition. I recall talking to a gentleman who works for Mike Defazio called Tony Baresse -- named Tony Baresse, about this. I was trying to gain an understanding of...

Q. By "this," you mean the credit provisions?

A. Yes, ma'am. I just wanted to have an understanding of -- of what it was.

Q. Tony -- how do you spell Baresse?

A. I believe it was B-AA-R-E-S-S-E, if I'm not mistaken.

Q. Okay. And what was Tony Baresse's role?

A. He was a -- a -- I'm not sure what level he was. But he worked for one of the people that reported directly to Mike Defazio and he had a number of manager level people that reported to him.

Q. Well, before I go on to the next person could you tell me the substance of the conversations, if you recall them?

A. Just trying to gain an understanding of what the intent was here and carrying it out.

Q. What was your understanding of the intent here?

A. It was my understanding that if the credits and recognition names of individuals or whoever was

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provided with -- with the source code or with any documentation, that it -- it would be carried forth if AT and T published it or used that code it would be in the source code as well as in any documentation.

Q. Do you have any recollection of any conversations you've had with anybody at AT and T and the University, those two organizations, regarding any other provision in this draft agreement, regarding the meaning of the terms in this agreement?

A. The only other thing that I recall was talking about the indemnification paragraph, but I don't recall the substance of the conversations. They were strictly with the -- with the attorney. I ...

Q. Okay. Okay. So -- I just want to make sure. There is no other provision in this draft license agreement that you recall discussing with anybody at the University or AT and T?

A. I have no -- no recollection of any other conversations.

Q. Do you know whether you made telephone calls and had conversations with anybody at the University during the process of negotiating this particular agreement?

A. To the best of my knowledge I do not. MS. SHAPREAU: All right.

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**************** CROSS-EXAMINATION of MR. FRASURE by MR. KENNEDY:

Q. Mr. Frasure, during your involvement with the licensing of UNIX system software, did you have any involvement in decisions on the part of AT and T to grant or deny software licenses to applications who were seeking a license?

A. Yes.

Q. What was the nature if your involvement, generally?

A. Well, generally we tried to look at an applicant to see if they -- if they really needed a license. There were a number of companies for various -- that applied for a license that we denied them to. We felt they had no valid reason for it or we felt for some reason the license would not be protected. There was really a number of reasons that we would use as criteria to deny a license. We would deny -- I was involved in the denial of a couple of licenses because of the Dunn and Bradstreet reports that came in on the -- on the companies; they had bad credit reports. When requested to produce some type of records or recordings they -- they could not produce them. They were behind in payment of royalty fees to other companies for other products. We decided that it was not a wise decision to provide

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them with a license. I denied licenses to companies that were really -- there were individuals within the company who wanted to obtain a license, rather than the company itself. We felt that a binary product would be suitable for them, either from AT and T or from on of our licensees. There was a number of times we wouild direct a -- a customer -- if you want to call them a customer -- inquiry of a license to -- to one of our competitors, based on what their product need was. We would deny them a license because we felt thay they -- they really didn't have a valid reason for it or a need for it. There were large corporations who would apply for a licesne who wanted to -- let me restate that. There were large corporations who, individuals within the corporation would want a license. They would want to negotiate the license themselves or have their department head license it, rather than their corporate general counsel. They did not want to take the license to that high a level in the company. We would deny really working with them because we felt that it was the desires of an individual rather than the desires of the company to obtain a license. We participated in a lot of trade shows and that would stimulate interest in UNIX licenses. There

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was number of them we would turn down. I recall turning down a license – I'm not sure how to refer to it as a company or what, but someone who came to us for an educational license. Because they had a – they said they were running a non-profit organization and they really had no charter from the state that were in saying they were an educational institution. He produced – the individual produced a couple of pieces of paper that said they were non-profit, but we felt like that they were after a license for other than using it for educational purposes. They were denied. So there were a number of cases where we would deny licenses to – to a – to a company or I guess a corporation if they applied for one.

Q. Let me deal first with the instances that you've reffered to in which licenses were denied based on the results of a Dunn and Bradstreet review

Q. Did you conduct that Dunn and Broadstreet review yourself?

A. No.

Q. Who conducted that?

A. We had two paralegals in the organization . One's – the lady's name was Ruth Rideout: and the other, I can see her plain as day but I don't recall her name right now. But they – when the request

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would come in, one of the first things we would do would be to run a Dunn and Bradstreet, the paralegals would do that. If the results come back that they were – they were satisfactory, we would – we would pursue with the next step and try to ensure that the company applying for a license had a valid reason for the license and just did not want to obtain it. Back during the time that I was with the organization it – in some respects it seemed to be a fad to be able to try to get a license with some companies. So we had to weed out those requests to really protect the software because in some of those requests we just felt like the software would not be protected. I've lost track of your question. I guess I digressed.

Q. How did the results of the Dunn and Bradstreet check come to your attention in those instances you ended up denying license applications?

A. I'm not really sure. It was that the Dunn and Bradstreet came back and typically if it came back unfavorable, the account executive would relay that to the licensee. If the licensee continued to push for it, I always wanted to make the account executive good guy and I was the bad guy. I always wanted to provide an

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order of escalation. So I would get involved in – so not to jeopardize any customer relations, if it was easy for the account executive to blame it on his boss rather than tell the individual themselves. So I would get involved in talking with the customers and review it and question them. I have questioned them on the things in the Dunn and Bradstreet report, in terms of their financial position and their ability to – to pay for the license. In one case there was a corporation who wanted a sublicenseing agreement and although they would not get the agreement until they paid us, we had questions – I had questions – I had questions in my mind that they would be able to pay the fees if they did sub license a product. So I denied those -- those requests for licenses.

Q. The denials that you're referring that grew out of the unfavorable Dunn and Bradstreet reviews, were the companies making those applications based in the United States?

A. Yes.

Q. You referenced as well denials of a new license where a licensee was behind on royalty payments. Do you remember that?

A. The licensee? Yes. We would – we would go after – one of the provisions of the sublicesensing

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agreement required that you pay your – your royalties on a quarterly basis. We tracked those and if the licensee would get behind, we would start sending registered letters to them as reminders .We reminded them of what they owed and we did not get even a report from them as to how many copies they were sold. We would – in several cases took action to suspend their sub licensing of a product until the fees were caught up and paid.

Q. And in those instances were those companies or licensees ones that were based in the US?

A. To my knowledge they were all based in the United States; yes.

Q. You mentioned as well cases in which licensees were denied because based on AT and Ts investigation AT and T concluded that it was individuals who were really interested in acquiring source code licenses rather than the companies for which they were employed. Were those instances as well ones in which the companies were doing business in the US?

A. Yes

Q. You referred as well to a case in which a license was denied to an entity because AT and T was not satisfied with it's proof, if you will, regarding its not-for-profit status. Was that a licensee that was operating, doing

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business in the US?

A. Yes, it was.

Q. All of the instances that you've referred to, did they involve licenses by US based entities seeking to use UNIX system source code in relation to their US operations?

A. Yes. Mr. KENNEDY: I've got nothing further RE-DIRECT EXAMINATION of MR. FRASURE by MS. FITHIAN:

Q. Okay. Now you had talked about – are you finished? MR. KENNEDY: Yes.

Q. Okay. You talked about companies being denied aid for source co- license because they had an unfavorable Dunn and Bradstreet report?

A. They owed people a lot of money. They were late in their payments beyond terms of contracts they had entered into. Normally a company, when it does business with a supplier or something like that, it enters into sometimes the terms that they are going to pay and a certain time frame. So if their ninety days or six months overdue in that, there is no reason for me to think

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they are going to treat me any better or AT and T any better than they did someone else.

Q. Okay. And you mention people being denied -- actually you talked about licenses being suspended or sublicensing of product being suspended because people were behind in payment of royalty fees.

A. Yes.

Q. In those instances, those were customers who already had a license?

A. Yes.

Q. And the license was then suspended?

A. Well, there was action taken to suspend the license and you know, we would -- we would start enforcement of that and generally agreements were made to remedy the situation. But we would take action to do that because they were not in accordance with their sublicensing agreement.

Q. Okay. And you said that in some instances you decided that a prospective license, you did not have a valid reason . . .

A. Yes.

Q. . . . for pending license. What was a valid reason?

A. Well . . .

Q. Or what did you mean by a valid reason. Let

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me put it that way.

A. What I meant by an invalid reason, normally we provided the license to a corporation because they were either going to use the product internally for their own use and there's a term called port. They would modify it to run on a certain selected group of hardware that they had and wanted to take advantages of a UNIX operating system and use that within the company. Then those companies would enter the corporate level with an agreement. As I indicated there were individuals who just wanted to get their hands, I felt, on the source code so that they could play with it themselves and do things that were not in the company's interest. When they would refuse to take the agreement to the appropriate level within the company so an individual who was designated on behalf of the company, and whenthey refuse to take it to that level, we would deny all license. I did not feel that it was good business practice to negotiate an agreement with some organization that was way down in the corporate structure.

Q. But in those instances, if the company -- ifthe company did take it to the appropriate levels for negotiating agreements that would not be a problem; right?

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A. That's right. If we understood what they were going to do with the product.

Q. So assuming if they took it to the appropriate level that would not be a reason to deny it?

A. That's true, if -- yes, that's right. MS. SHAPREAU: That being what, I'm unclear? MS. FITHIAN: The fact that an individual who was appropriate in the initial . . . MS. SHAPREAU: Thank you.

A. We have to be careful here because a lot of these companies were not big companies, they were very small companies that were made up of a few individuals and we had to exercise caution in those companies as well. So one individual on a company could wear a lot of different hats and we wanted to ensure that the software was going to be protected and we tried to the best of our ability to determine if they were going to fold up within three months or six months and things get dispersed to the wind. We -- you lose control of it that way, so we had to satisfy ourselves that the licensee was going to indeed be able to fulfil the requirements of the contract. Anyone can sign a contract, but you don't know where you're going to stand in a few months if they go belly-up in bankruptcy.

Q. So assume that you were dealing with your

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appropriate person within the company to enter into contracts, and that you felt that they were able and willing to protect the software and you felt they were able to pay for it in those instances, there would be no reason for denial of the license; is that correct? MR. KENNEDY: Objection to form.

Q. In those instances there was no reason for denial? MR. KENNEDY: Objection to form.

A. I think that's probably true.

Q. Now, I've marked as Exhibit D 55, a letter to you from someone named John W. Wake from Prentiss Hall, Inc., dated July 23, 1986. Do you recall receiving this letter?

A. Yes.

Q. I'm sorry; let me identify it by Bates number as well. It's produced by Prentiss in this action and it's Bates number os P -- P 12-158 through P 12-156. I'm sorry. And do you recall receiving this letter?

A. Yes.

Q. Okay. And it says: . . .Enclosed is a copy of the manuscript as we discussed, _Guide to Writing A UNIX Device Driver_ by people at MassCom.

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And the second paragraph says: . . .Please let us know if, one, AT and T has no reason to bar publication of this work and, if AT and T finds this to be a helpful contribution to existing literature. Do you recall responding to this letter?

A. To my knowledge, it was -- it was responded to; yes.

Q. Do you recall what the response was?

A. No.

Q. I'm sorry?

A. No.

Q. You don't recall?

A. I -- no, I don't recall.

Q. So you don't recall whether AT and T objected to the request?

A. Not in this case; no, I don't. I mean, I'd have to look at the correspondence dating back to this.

Q. Are you aware of any instance in which AT and T or its affiliated company reviewed code submitted by third parties to determine whether it contained and AT and T propriety code?

A. Yes.

Q. How many such instances are you aware of?

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A. I couldn't give you a specific number. If I had to guess, I would say five to six instances.

Q. And do you recall whether any of those instance you informed the person making the request that the code did not contain any AT and T proprietary code?

A. Yes, there were some that we said did not contain any.

Q. Can you identify any specific instances?

A. By names, no.

Q. What was done to make that determination?

A. The code that would be provided to us similar to what text was -- that came from Prentiss Hall here, was sent to Summit, New Jersey. Again, it was Mike Defazio's organization and the code was reviewed by the applicable people there to determine if -- if it looked like it had any AT and T code in it or methods and concepts or whatever and they would make a determination. They would send me back their findings in writing and then I would just really paraphrase or use the paragraphs that they provided to me to respond to the customer. I was a customer interface. We did not want the customer working with them. You lose control of things that way, so I was a customer interface. So I myself or my people made no determination of that whatsoever.

Q. Do you know what criteria were applied by the

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people who were making the determination?

A. No. They were the experts in the system. I had not idea what they used.

Q. Do you know whether in any of the instances the person submitting the code who had written the code being submitted had access UNIX source code?

A. I really can't call -- recall specifically. I do recall that there was some add-on type applications or products that would run with the operating system and they were a license. So they had developed something off on the side. I don't know if it was attached process or what it was but them being a licensee did want confirmance (sic) from AT and T that it was okay to provide that product and that AT and T had no interest in the product.

Q. And do you recall any such instances in which the response was that AT and T had no interest and ...

A. Yes.

Q. And that it was not subject to AT and T licensing?

A. Yes. MS. FITHIAN: Go ahead. ********************** RE-EXAMINATION of MR. FRASURE by MS. SHAPREAU:

Q. Who in the technical department reviewed the

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code in this code review process we were just discussing?

A. I don't know. The -- Mike Defazio's organization, and he reported to a gentleman by the name of Bill Shay. They had access to people with an AT and T Bell Laboratories who were still writing code for the UNIX operating system and somehow they made a determination by looking at the code and what its application was, what it was to do to funnel it to the right development organization for review.

Q. So AT and T Bell Labs determined which development organization to send...

A. No. AT and T -- someone would -- they would look at it and they would actually go out to the individuals responsible for that part of the code in the operating system.

Q. So it would depend on who originally developed that part of it?

A. Yes.

Q. Do you remember the names of any of those specific developers who were involved?

A. I had very little interface with -- with those people. I had talked with a number of individuals but I don't know if they were the ones who actually reviewed the source code or not.

Q. Do you remember the names of the individuals

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that you talked with?

A. Brian Kernigan was a gentleman I had talked with on several occasions.

Q. Was he a technical person?

A. Yes. He was one of the original developers of the UNIX operating system.

Q. Do you know if he still with AT and T?

A. I have no ide

A. I don't know.

Q. So he might have reviewed the code in some circumstances?

A. He may have. I don't know whether he did or not.

Q. Any other developers that you remember the names of?

A. I can't place one right now. They are hanging around the tip of my tongue but I can't come up with a name right now.

Q. I want to bounce back to the licensing discussion earlier, just to clarify. You talked about a hypothetical where an individual in a corporation might apply for a license?

A. Yes.

Q. Is there an individual who wasn't part of a corporation but he met the financial criteria woh wanted to use the UNIX operating system for his or her own

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internal business uses, would AT and T license to that kind of individual? MR. KENNEDY: Objection to the form to the extent you characterized Mr. Frasures's testimony as hypothetical. He talked about instances in which licenses were in fact denied.

Q. Okay. What I -- do you understand my question?

A. Yes. To my knowledge, we never licensed an individual for the software. I mean, I'm not aware personally that we ever granted a license to an individual.

Q. Do you know whether an individual ever applied for a license?

A. I don't recall if one ever did.

Q. Based on what you know or your experience with AT and T, and this is a hypothetical, if an individual had applied for a license at the time you were employed at AT and T and it was for an individual's internal business purpose and they had good credit, do you have any reason to believe that AT and T would not have granted them a license to use UNIX operating system?

A. Probably -- I feel they would have been denied a license.

Q. Why is that?

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A. It would determine to what they wanted to use the product -- the product for. I would feel...

Q. If it was for internal business uses. MR. KENNEDY: Excuse Me.

Q. I clarified. MR. KENNEDY: No, I'm sorry. I just didn't - I thought Mr. Frasure had not finished his answer. I thought he was interrupted. MS. SHAPREAU: I was trying to -- I think that maybe he hadn't recalled that I had said what the purpose was. So just to make things -- to try to get clarified.

A. In that case, we would have tried to steer them to one of the sublicensees to buy a binary product and for them to use it for their own internal business applications and we did that on a number of occasions with companies. We would refer them to either our AT and T information sales people as a sales lead or we would refer them to someone like Unisoft or to Microsoft or to IBM. It would be a hardware company or a software to try and find a computer and a software that would fulfill the needs.

Q. Okay. So if an individual didn't qualify for whatever reason for your source product, you would in many circumstances direct them to give an object or use?

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A. That's it.

Q. Okay.

A. That's why we would always do that. We would direct them to a -- we would try to understand what they were really wanting to do and direct them to someone who provided and object module that we thought would satisfy the need.

Q. You don't actually have any specific recollection of an individual on their own running their own business making a request?

A. I do not recall.

Q. Okay. Forgive me, I'm going to take a minute to look at my notes. (Brief Pause.) There were two ways in which AT and T licensee who had an AT and T license, for example, precluded to -- excuse me. Let's say an AT and T licensee -- an AT and T licensee had a license for a System 5. My understanding from your prior testimony that there are two ways that AT and T licensee for System Five could have gotten a copy of Thirty-two B to use. One is they could have paid a fee to AT and T and gotten a copy that way or they could have gone through an exchange with another AT and T licensee and gotten a copy of Thirty-two B by that means; is that correct?

Page 223

A. Yes. I believe in one of the exhibits or whatever we're calling these things that we looked at earlier today, I think that it says the Thrity-two B was no longer available from AT and T. So if I -- it seems to me that one of the schedules that we looked at said that Thirty-two B was no longer available. Maybe I misread it, maybe it was B Six or B Seven that wasn't available. But...

Q. Well, the documents will speak for themselves in terms of the schedule.

A. Yeah, but you could obtain it one way or the other. I mean you could obtain it from a licensee or from AT and T -- if AT and T still made a distribution of it.

Q. Okay. Do you know whether AT and T ever reviewed the shrinkwrap licenses that any of it's licensee used for binary distributions?

A. We reviewed the licenses for review of the shrinkwrap agreements; however, we refused to comment on them. In other words, we would send them back and we said as long as your company and your attorneys feel that they are meeting the terms of the sublicensing agreement, then that's your decision. We will not give a

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yes or no on that. We did not want to be party, I guess, to something that could happen in the future. Okay? MS. SHAPREAU: Mr. Frasure, thank you very much for your time. ----------------------------------------- WHEREUPON, the Deposition of David Frasure was concluded.

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STATE OF NORTH CAROLINA COUNTY OF DARE

C E R T I F I C A T I O N

I, Lauri S. Crowder, a North Carolina Court Reporter and Notary Public, do hereby certify that the foregoing Pages, numbered one through _____, are, to the best of my knowledge, a true and accurate transcription of the testimony of David Frasure which was taken by me in the Stenomask method on December 8, 1992; and was transcribed under my personal supervision. I further certify that I have no financial interest in the outcome of this action. Nor am I a relative, employee, attorney or counsel for any of the parties.

WITNESS my Hand and Seal on this 16th day of December, 1992.

My Commission Expires on July 12, 1995.

(signature of Lauri S. Crowder) (Notary seal affixed) ____________________________________ LAURI S. CROWDER KING'S COURT REPORTING SERVICES P.O. Box 7323 Rocky Mount, North Carolina 27804 (919) 937-XXXX

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STATE OF NORTH CAROLINA COUNTY OF DARE

C E R T I F I C A T I O N

I, Penny S. Harper, a North Carolina Court Reporter and Notary Public, do hereby certify that the foregoing Pages are, to the best of my knowledge, a true and accurate transcription of the testimony of: David Frasure taken by me in the Stenomask method on: December 8th, 1992; and was transcribed under my personal direction. I further certify that I have no financial interest in the outcome of this action. Nor am I a relative, employee, attorney or counsel for any of the parties.

WITNESS my Hand and Seal on this 16th day of December, 1992.
My Commission Expires on October 25, 1997.

(signature of Penny S. Harper) (Notary seal affixed)
____________________________________
PENNY S. HARPER
KING'S COURT REPORTING SERVICES
[address]
[phone]

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INDEX

Direct Examination	4
Re-Direct by Ms Fithian	210
Examination	97
Re-examination by Ms. Shapreau	217
Cross Examination by Mr. Kennedy	204
Luncheon Recess	96
Certifications	225/226