Free Motion for Miscellaneous Relief - District Court of Colorado - Colorado

Case 1:04-cv-01225-MSK-BNB

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Malik M. Hasan, M.D., et al. v. Goldman Sachs 1998 Exchange Place Fund, LP, et al.

EXHIBIT M T EN ME D F N A T ' TO F RP E L SO A D H A D E E D N S MO I N O R C U I N N OTHER RELIEF THOMAS GRAZIANO DEPOSITION EXCERPTS

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------MALIK M. HASAN, M.D., an individual; and SEEME G. HASAN, an individual, Plaintiffs, No. -against GOLDMAN SACHS 1998 EXCHANGE PLACE FUND, L.P., a Delaware limited partnership; GOLDMAN SACHS 1999 EXCHANGE PLACE FUND, L.P., a GOLDMAN a THE a Delaware limited partnership; Delaware limited partnership; GOLDMAN SACHS GROUP, corporation; 1-100, INC., 04-MK1225 (BNB) (Consol idated with 04-MK1226 (BNB) x

SACHS MANAGEMENT PARTNERS, L.P.,

a Delaware

GOLDMAN SACHS & CO.,

New York limited partnership; JOHN DOES individual persons whose true and LENDER business entities whose identities are unknown; PARTIES 1-100,

true identities are unknown, Defendants. ------------------------------------September 8, 2005 THOMAS GRAZIANO x

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1 2 3 4 5 September 8, 2005 6 1:49 p.m. 7 8 9 10 Deposition of THOMAS GRAZIANO, taken by Plaintiffs, I11 pursuant to Notice, held at the offices of Cleary 12 Gottlieb Steen & Hamilton, LLP, One Liberty Plaza, 13 New York, New York, before Joseph R. Danyo, a 14 Shorthand Reporter and Notary Public within and for 15 the State of New York. 16 17 18 19 20 21 22 23 24 25
Page 3 A pp e ar a n c e s: SENN VISCIANO KIRSCHENBAUM MERRICK, P.C. Attorneys for Plaintiffs 1801 California Street Suite 4300 Denver, Colorado 80202-2604 By: GLENN W MERRICK, ESQ FEATHERSTONE DeSISTO LLP Attorneys for Goldman Sachs Defendants 600 17th Street Suite 2400 Denver, Colorado 80202 By: BRUCE A. FEATHERSTONE, ESQ. -andCLEARY GOTTLIEB STEEN & HAMILTON, LLP One Liberty Plaza New York, New York By: NANCY RUSKIN, ESQ. LAW OFFICES OF ROY P. KOZUPSKY & ASSOCIATES, LLP Attorneys for the Witness 10 East 40th Street Suite 1710 New York, New York 100 16 By: WILLIAM P. WALZER, ESQ. o0o
-."'I

THOMAS GRAZIANO,havingbeen first duly sworn by the Notary Public (Joseph R. Danyo), was examined and testified as follows: EXAMINATION BY MR. MERRICK: Q. Mr. Graziano, with your permission, we will just start all over again, because I don't think we got very far. Is that okay? A. Yes, it is. Q. Would you please state your full name? A. Thomas Graziano. Q. Mr. Graziano, what is your business address? A. 16 Honizon Boulevard, South Hackensack, New Jersey. Q. What business is located there? A. Bind-Rite Services. Q. What position do you hold with Bind-Rite Services? A. Vice president. Q. How long have you been vice
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Graziano president? A. Two years. Q. What position did you hold -- were you employed by Bind-Rite Services prior to two years ago? A. I held a dual position. I was sales manager and plant manager. Q. How long were you sales manager and plant manager for Bind-Rite? A. 20 years. Q. Where were you physically located when you performed that function? A. Same address. Q. Is the 16 Horizon Boulevard, South Hackensack, New Jersey address the principal place of business of Bind-Rite? A. Yes. Q. Does Bind-Rite have any other places of business? A. No. Q. Do you know how long Bind-Rite has been at that location? A. 21lyears. Q. What is the business of Bind-Rite 2 (Pages 2 to 5)

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Graziano Services? A. Bookbinding. Q. Can you elaborate? A. Manufacture paperback books. Q. You say you manufacture paperback books. What do you mean? A. We make paperback books. We actually produce them. Q. Do you print them? A. No. Q. So you get materials that have been preprinted, and they are delivered to your place of business? A. Correct. Q. What do you do with the preprinted matenials when they arrive? A. We process them and make our books. Q. What do you mean by you process them? A. If they require cutting or folding, we do that, and then we do the binding of them. Q. How long has Bind-Rite been in
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Graziano

Q. Let me take that apart a little
bit. How far back do your records go? A. Five years. Q. This job, at least the binding on the '98 and '99 materials, would have been more than five years old, so you don't maintain those files? A. That's correct.

Q. Records?
A. A. A. A.

Q. What became of the records?
They were destroyed. They are destroyed every fifth. January.

That's correct.

Q. When were they destroyed? Q. Is there -Q. Is there a procedure in place at
Bind-Rite that you take materials that are five years or older and destroy them every year? A. Yes. Q. That reminds me. I should have started with my typical admonition. I may have done it already, so I don't want to bore you, but, during the course of this examination, I am
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Graziano that business? A. 21 years. Q. Does Bind-Rite also do binding services for various financial printers? A. Yes, it does. Q. How long has Bind-Rite been in the business of doing binding services for financial printers? A. I would say about 17, 18 years. Q. What financial printers have you been doing business with in that peniod? A. We do work for Bowne, RR. Donnelley, Rosenbaum and others as well. Q. Do you know whether or not Bind-Rite did any pninting -- did any binding in connection with the 1998 Goldman Sachs exchange fund or the 1999 exchange fund? A. Yes, I am almost sure we did the binding. Q. When you say you are almost sure, what do you mean? A. We don't have records back that far, so, looking at the books, I am almost sure that they are our books.

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Graziano going to be asking you a series of questions, which questions are being taken down verbatim by our court reporter. Do you understand that? A. Yes. Q. Similarly, our court reporter is taking down your answers in the stenographic notes. Do you understand that? A. Yes. Q. Your answers are being given under oath under the penalty of perjury. Do you understand that? A. Yes, I do. Q. Ordinarily, our court reporter would prepare a typewnitten transcript, which would be made available to you to review and correct to the extent you believe necessary to ensure your answers are accurate and correct, and ordinarily you would have 30 days to do that, but we are very close to a hearing date, so that is not going to be possible. Accordingly, [ am going to ask you to be extra vigilant to ensure that you understand the questions I am asking and that your answers are truthful to the best of your 3 (Pages 6 to 9)

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Graziano ability. Do you understand that? A. Yes, I do. Q. It is highly important that, if at any point in time you don't understand my question, whether it is because it is vague or it is nonsensical or you just missed it for whatever reason, that you alert me to that fact, and I would be more than happy to restate it or rephrase it so that you and I are asking and answering the same question. Is that fair? A. Sure. Q. You are represented here by your counsel. If at any point in time you need to take a break to speak with your counsel, if you would let me know that, I would be more than happy to accommodate you. A. All right. Q. Similarly, if you want to take a break to stretch your legs or for any other purpose, if you let me know, I will be more than happy to accommodate that request as well. A. Okay. Q. If we could return to the line of questioning having to do with the binding on the
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Graziano the time. They are not opened that long. Q. Were there other binderies that were competing with you back in '98 and '99 that are no longer open today? A. That would be Remco. Q. Do you know whether there are other binderies that you haven't identified in your testimony so far which would have been competitors of yours for binding services back in '98 and '99? A. None that come to my mind at the moment, no. Q. Do you know whether the bindenes that you identified as competitors in the '98 and '99 time fr-ame were performing binding services for financial printers? A. Yes, they were. Q. Do you know whether any of those competing binding services performed binding work for financial printers that did business with Goldman Sachs & Company? A. No one does work directly for Goldman Sachs. What we do. The printer is our customer.
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Graziano 1998, do you know whether Bind-Rite did the binding on the 1998 pnivate placement memorandum? A. Again, I can't tell you for sure, but I am fairly sure we did. Q. How about on the executive summary? A. Same thing. We do a lot of different ones. I can't be 100 percent certain. Q. Do other folks do binding such as what Bind-Rite does? A. I guess there is. Q. You have competitors in the industry, don't you? A. Yes, we do, but -Q. Can you identify who those competitors are? A. Our competitors would be E&M Bindery, Summit Bindery and Remco Bindery, which recently closed. Q. Were these binderies also competitors of yours back in the 1998/1999 time frames? A. I'm not sure if E&M was open at
J.

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Graziano

Q. That was my question. Do you know
whether or not any of your competitors in the '98 and '99 time fr-ame did business with financial printers who in turn did business with Goldman Sachs? A. I would imagine so, yes. Q. Do you know whether your competitors in the '98 and '99 time fr-ame, I am talking about your binding competitors, do you know whether they had the capacity to do Perfect-Bind work? A. Yes, they did. Q. You indicated that you thought that the Perfect-Bind work that was reflected in the 1998 private placement memorandum and executive summary was the work of Bind-Rite. That was your belief. Correct? A. Correct. Q. What basis do you use for that belief? What is the factual basis for that belief? A. Two reasons. The glue. Everybody uses a different glue, and our glue is specially formulated. So I know what it looks like. 4 (Pages 10 to 13)

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Graziano Secondly, the spine of the book, the reason why -- one of the reasons why we are so successful at what we do is because we are able to get that spine square and straight, and it is very, very hard to do. So, looking at them, it looks like that is our spine and our glue. Q. Other than the appearance of the book now several years later as having a square and straight spine and looking at the glue now several years later, do you have any other factual bases for your supposition that Bind-Rite was responsible for the binding work? MR. FEATHERSTONE: Objection to the formn of the question. MR. WAiLZER: You can answer. A. No, I can't tell for sure. Q. If Bind-Rite had done the binding work, let's assume this for the moment, would Bind-Rite have invoiced a financial printer for that? A. Yes. Q. Do you know which financial printer was involved?
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Graziano

Q. Did Mr. Economos give you any
factual bases for his thinking that you folks had done the book? A. Simply by the fact that we do a good deal of their projects. Especially Goldman Sachs. They like our work. Q. Did Mr. Economos say he was able to verify through the records of Bowne that you had done the binding work? A. He wasn't able to. Q. He was not able to? A. No. Q. Did he indicate he had tried? A. Yes. Q. Did he ask you whether or not you have any records of who had done the work? A. Yes. Q. What did you tell him? A. No, I did not. Q. So is it fair to the best of your ability today that your testimony is that neither you nor Bowne have any records of whether or not Bind-Rite Services bound the private placement memorandum and the other
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Graziano It would be Bowne. Q. How do you know it was Bowne? A. Everything that we have done for Goldman Sachs is through Bowne. Q. In other words, the only financial printer that you have done business with on a Goldman Sachs project has been Bowne? A. That's correct. Q. And you can think of no exceptions? A. That's correct. Q. Have you asked Bowne whether or not you did the binding work on this? A. Yes. Q. Who did you speak with? A. Michael Economos. Q. When did you speak with him? A. Several months ago I guess when this first came up. Q. Tell me about that, please. A. He actually called me and asked me if we did the book, and I couldn't find out for sure, and he seems to think we did, and I seem to think we did. That was really it. A.

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Graziano materials associated with the '98 exchange fund? A. To the best of my knowledge, yes. Q. Are you aware of anyone else who has any records which reflect whether or not Bind-Rite Services was responsible for the binding work for the Goldman Sachs 1998 exchange fund? A. No. No one I know would have any kind of record like that. Q. Have you made a diligent search of Bind-Rite Services to ensure that you have no records which will reflect that? A. Absolutely. Q. Do you know what work Bind-Rite did or may have done in connection with the Goldman Sachs 1998 exchange fund? MR. FEATHERSTONE: Objection to the form. A. I don't understand the question. Q. Fair enough. Thank you. If I understood your testimony, you believe that Bind-Rite services may have performed binding services for Bowne in respect of the 1998 exchange fund, correct?
W

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Graziano A. It sounds like the same question that I just said no to. MR. WALZER: It was different. He was talking first about everything they did. Now he is asking about financial printing. A. All Bowne is financial printing. That is all it is. So it is the same question. Q. Do you know what percentage of the Goldman Sachs financial printing work that was done by Bowne ended up being Bind-Rite work in the '98-'99 time fr-ame? A. No. Q. Do you have an estimate? A. No. Q. Along that same line of questioning, with respect to the Goldman Sachs financial pninting work that got bound by Bowne in the '98-'99 time frame, do you know whether Bind-Rite got more of that work than its competitors? A. I believe so. Q. What is the basis of your belief? A. Just from the business
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Graziano they would pick them up? A. That's right. Q. In that time fr-ame, if you had done, and I say you, I mean Bind-Rite Services, if you had done the binding on Exhibit 10-A, how long would it take to do that binding? MR. FEATHERSTONE: Objection to the form of the question. Vague. A. Hours. MR. WALZER: Doesn't it depend on the number of books you are doing? THE WITNESS: This type of product is not a lot of books. The most it would probably take is 12 hours. MR. FEATHERSTONE: The witness was refemrng to Exhibit 10-A, I believe. He placed his hand on it. Q. Would you, and when I say you, Bind-Rite Services, would Bind-Rite Services bind all the materials that arrived, or would you bind a certain number of them, or how did that work? A. Quantity is given to us. Quantity is ordered. We will normnally bind two to 500
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Graziano relationship that we have. Q. Other than your feeling from the business relationship, do you have any factual basis for that? A. No. Q. Let me ask you a different line of questioning. What did you do with the books once they were bound? Again, let me sharpen the focus a bit. Back in the '98-'99 time frame. My questions for this line of questions will remain in that time frame. When you were doing financial printing binding work in that time fr-ame for Bowne, whether it was a Goldman Sachs project or otherwise, what did you do with the bound materials? A. They are boxed, wrapped, strapped, palletized and Bowne's truck picked them up or whoever we do it for picks it up, depending on the client. Q. So, if we are talking about Bowne in the '98-'99 time frame, they would have delivered the preprinted materials to you. You would have bound them and wrapped them up, and

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Graziano more over that quantity. Everything above that is destroyed. Q. So, if I understand what you are saying, I am just using this as an example, but, if somebody wanted a thousand books bound, you would bind 1200 or 1300 and destroy the balance of the materials? A. That's correct. Q. Did you ever retumn the balance of the materials to Bowne? A. No, nothing unbound.

Q. Why?
A. covers? A. There is no reason for it. Bowne.

Q. Did you ever -- who supplied the Q. So Bowne would have supplied the
interior preprinted matenial as well as the covers? A. Yes. Q. Do you know how many covers Bowne had on a given project? A. No. Q. You just know how many pages were 17 (Pages 62 to 65)

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Graziano delivered to you and how many covers were delivered to you, correct? A. I know what is delivered to us. Exact quantity I don't know. Q. Do you also destroy the covers that are in excess of those necessary to bind? A. Absolutely. Q. Are there any exceptions to that? A. No. Q. What if the customer asks for the materials back? A. It is not normal practice. Q. Would you destroy it, even if the customer asked for the materials back? A. If a customer asked for something, I guess I would have to give them what is theirs, but it is not a normnal practice. Q. Now, let's say that for purposes of this line of questioning, let's assume, if you will, that Bind-Rite Services bound Exhibit 10-A. Are you with me? A. I am with you. Q. Do you know whether Bowne delivers to you all of the printed material and all of
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Graziano

Q. Have you ever done that?
A. A. No. No.

Q. Have you ever seen anyone do it? Q. In other words, if I were to ask
you to, and I'm not asking you to, but, if I were to ask you to unbind either 10O-A or 11I-A, how would you go about doing it? A. You will destroy the book. There is no way to do it. Q. Can you cut the spine? A. Once you do that, you are going to destroy the size. Q. Can you cut the spine? MR. WALZER: Objection to form. I don't know what you mean. He can take a knife and do it. Do you mean does he have a machine that does that? Anybody can do it. Q. I agree with your counsel, anybody can do it. Can you cut the spine is my question? A. I guess you can, yes. Q. If you cut the spine, you say that
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Graziano the covers that have been printed by Bowne? A. I don't know. Q. You just know how many Bowne chooses to deliver to Bind-Rite? MR. FEATHERSTONE: Objection. Repetitive.

Q. Correct?
A. I don't know the exact quantities. What comes in and what doesn't. Q. Have you had occasion to take a bound booklet and unbind it? Perfect-bound booklet? A. For what reason? Q. For any reason. A. No. Q. You have never unbound a bound booklet? A. If you unbind a book, you are going to destroy it. Q. Can you cut the binding? A. Can you cut the binding off the book?

Q. Yes.
A. I guess you can. Sure.

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Graziano destroys the book? A. Yes. Q. Does it destroy the book or does it simply open the spine? A. It will open the spine, but what you are doing is destroying the book. Something very, very critical about Goldman Sachs is the size of their book. They are very, very critical down to the millimeter. Q. Is Goldman Sachs one of your customers? A. Bowne is, but we conform to their standards.

Q. Go on.
A. So, by cutting, if you think about cutting the spine off the book, you would have to cut so much off to get the glue out, the size would be totally distorted, and what you have on every one of their books is a border. There is a space from every word that is critical to the book. There is actually rules that we follow to get that spacing proper. MR. FEATHERSTONE: The witness is referring to Exhibit 10O-A. 18 (Pages 66 to 69)

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Graziano A. Or any book of theirs. 10-A, 11-A, any book. Q. Let me see if I understand this correctly. If what you did was you were to cut along the spine, I'm not talking cutting along the edge. I am talking cutting the spine itself. Do you see that? A. Urn-hum. Yes. Q. Is that possible to do? A. I guess you could do it with a knife, but it will destroy the book. Q. It will no longer be a book. It will be free pages, right? A. Right. Now you are ripping the cover. Q. Yes, the cover will be destroyed. I understand that, but that will open up the book, will it not? A. Yes. Q. Then you can remove the pages, correct? A. Right. But the way you are saying it, the pages will have what we call in there something called roughing, which is a notch on
4.

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Graziano would they not? A. At that point, no, because glue takes space. The glue has volume, so, once you take the page out, it will no longer be the same size as the book. Q. WIfwere to take Exhibit 10-A, for example, and take a razor right along the spine there, would running the razor along the spine reduce the size of the pages in the interior of the booklet? A. Once you took the glue off the page, yes. Every page will have glue on it, and glue takes space. Q. Then you could shave down the glue, right? A. Sure, if that is what you are saying. It is not what we would do, but I guess theoretically. How would you bind that book again? Q. Could you bind it the same way it was done the first time? A. If you try to get, first of all, back into the machine would be very difficult. Q. Can it be done?
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Graziano each page, and it is quite visible. Q. I think that is right. There might even be a little residual glue or something, correct? A. That's correct. Q. If you did that, if someone were to cut the spine, that wouldn't reduce the size of the booklet, would it? A. No, but you would have a page with glue and circular rough marks on it. Q. That could be trimmed down, I take it? A. You could trim it down. Q. Now, let me ask you this. If you had a booklet like 10-A which you have in front of you, and you cut it along the spine like I suggested with a razor or knife or whatever sharp object you use, you follow me? A. Yes. Q. And you were to open it up, and I think you and I agreed there will probably be a little residual glue and I think you said roughage or something of that nature, those pages would have approximately the same size,
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Graziano Because now you have all loose. MR. FEATHERSTONE: Let the witness finish his answers, Mr. Merrck. I object to the interruptions. I ask you to finish your answer, Mr. Graziano. A. The machine is not made to handle loose pages and cut-open pages, and, if you did, it would cut the book smaller than is normal for the book size, because the machine will recut it again, so now you will have a book that is a great deal smaller than the normal book size of 8-1/2 inches. Q. Have you finished your answer? A. Yes. Q. Thank you. Are there other machines that do Bind-Rite binding? MR. FEATI{ERSTONE: Objection to the form. Vague. Q. Do you understand the question? A. No. Q. You described the machine that your company has, Bind-Rite Services, correct? A. Yes. A. 19 (Pages 70 to 73)

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Q. Do you know whether there are
other machines that do binding services that do binding that will result in Perfect-Bind binds? A. Yes, there are other machines. Q. Do those other machines, do you know whether there are other machines that will do Perfect-Bind binding along the spine there without cutting the spine? MR. FEATHERSTONE: Objection to the form of the question. MR. WALZER: Go ahead. A. They all operate the same way. Q. If I were to tell you that there is a printer known as Capital Printing that operated in Denver, Colorado, that says that you could take those apart and rebind them and it is done in a heartbeat, would you find that to be incredible? MR. FEATI{ERSTONE: Objection to the form of the question. A. I find it impossible to believe. You will change the size of the book. Q. Assuming that there is a cut? A. Correct.
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Q. Do each and every one of them
require a cut along the binding? A. It requires it in order to open the pages. The only way that you cannot is if the pages all started out loose. Q. If they all started out loose, then what? A. Then you still have to apply the glue and you still have to trim the book. So you are going to distort the size. Q. If they all started out cut, the pages, and you apply the glue, right? A. Yes. Q. And that can be done? A. Yes. Q. And then the book is trimmed, correct? A. Right. Q. What if it is already the correct size? A. You will see that it wasn't trimmed. Q. How will you see that it wasn't trimmed?
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Graziano

Q. And if there is not a cut?
A.

Q. Why does there have to be a cut?
A. Because the pages are all folded. You have to open the book. Q. I understand with a folded book that the machine will cut, so that the glue will apply to all the pages which are adjacent to the spine. I am asking whether or not there are machines that create binding that is Bind-Rite binding without cutting the pages along the spine, whether there are machines that do that. MR. FEATHERSTONE: Object to the form of the question. A. I don't understand the question. Q. Are you familiar with all the machines that do Bind-Rite binding? MR. FEATHERSTONE: I object to the phrase "Bind-Rite binding." Q. I'm sorry. Are you familiar with all the machines that do Perfect-Bind binding? A. I think so.

There has to be a cut.

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Graziano A. You can see it. I could see it. Instantly. You can see it. The edges will be rough. They will not be even like a book is. This book or this book or any other book you have in front of you. It will not be flush even trim. Q. Let me ask you this. What I am trying to get at is as a professional binder and I were to come to you and say, Mr. Graziano, what I would like to do is I would like to take these loose pages and I would like to bind them into a Perfect-Bind binding, here is a cover, the pages are already the correct pages. Maybe the cover needs to be trimmed down. Could you do that? A. We wouldn't do that, no. Q. Could you do it? A. Not on the machinery we have, no. Q. Do you know whether there are machines that do that? A. I am sure there may be small little machines that can do something like that. Q. Those small little machines that could do stuff like that, do you know whether 20 (Pages 74 to 77)

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Graziano Goldman Sachs has such a machine? A. No. Q. You don't know? A. No. I don't think they have any machinery. They don't do any production. Q. How do you know? A. I won't swear to that. I don't know. I don't think they do. Q. Do you know whether Goldman Sachs has any printing ability in-house? MR. FEATHERSTONE: Do you have any good-faith basis for asking some of these questions? M[R. MERRICK: Asking whether he knows whether or not Goldman Sachs has a printing capability in-house? MR. FEATHERSTONE: You are asking the questions the way that you are asking them. Do you have a good-faith basis for that? I guess we know the answer to that.

Q. Do you know?
A. Restate the question, please?

Q. Do you know whether Goldman Sachs
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Graziano are to the form of the question, Bruce. MR. FEATHERSTONE: That is leading and it mischaracterizes. MR. MERRICK: We will let the transcript speak for itself. MR. FEATHERSTONE: You can yell all you want. You are what I have always thought you are. MR. MERRICK: I want to turn away too. Q. Did I misstate your testimony? MR. WALZER: Read it back, please. A. I don't even know where we are anymore. Q. I will try the question again. Is that all right? As I understood your testimony, your testimony was that the machinery that you have would not -- if I were to give you loose pages and a cover that had not been trimmed down would not Perfect-Bind the document again without reducing its size. Did I understand your testimony correctly? MR. FEATHERSTONE: Objection to the form of the question.
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Graziano has in-house printing capability? A. No. Q. Do you know whether Goldman Sachs has in-house printing machinery? A. No. The point is you cannot make this book and get that size using loose sheets. MR. FEATHERSTONE: Referring to which book? THE WITNESS: Either one. NMR. FEATHERSTONE: Exhibits 10-A and 11 -A? A. Any book. Once a size is specified, you cannot get it without trimming. Q. I understand that, but I thought you just got through telling me that if I brought you loose pages and a cover that needed to be trimmed down, that could be done with some of the smaller Perfect-Bind machinery. Is that what you said? MR. FEATHERSTONE: No, that is not what he said. MR. MERRICK: Counselor, do you have an objection? I am sick and tired of you interrupting this. Your comments

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Graziano MR. WALZER: You can answer if you understand the question. A. Can you restate it? Q. Sure. If I understood your testimony, and again correct me where I misstate you in any way, if I were to give you loose pages from a booklet such as 10-A and a cover that had not yet been trimmed, is it possible to Perfect-Bind those pages into the cover? A. Our machine is not made for that. Our machinery is too big to be able to do something like that. If there is a machine that is capable of doing that, you would have a problem with sizing. Q. What do you mean by that? A. If you gave someone loose pages and try to make a book out of it that was already a book, the sizing would never be the same again as to the book you had. Q. I'm sorry. I didn't follow that. MR. WALZER: You are assuming there would have to be more trimming? THE WITNESS: Correct. MR. WALZER: Why would there have 21 (Pages 78 to 81)

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Graziano to be more trimming? THE WITNESS: Once you bind a book, it needs trimming, loose pages or 4 folding pages. 5 Q. What if the pages are already 6 trimmed? It is only the cover that needs to be 7 8 trimmed? A. It will never match up properly. 9 10 Never in a million years. Q. How do you know? I11 A. Because I am doing this for 45 12 13 years. Q. With a machine that you don't 14 15 have? A. With my bookbinding experience. 16 17 It will never ever happen. Q. Have you ever used one of these 18 19 smaller machines? A. No. It won't happen. 20 MR. WALZER: I need a break at a 21 22 suitable juncture. MR. MERRICK: This is as good as 23 24 any time. 25 (Recess taken) 1 2 3
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4 5
6

7
8 9 10 I11 12 13 14

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Graziano of business other than Bind-Rite? A. I have seen them. Q. Have you ever operated one of those smaller machines? A. No. Q. Do you know how they operate? A. Yes. I have an idea. Not totally. Q. I'm not asking you to overstate your knowledge. I am just curious if you know how they operate. Have you ever seen anyone operate one of those machines? A. No. Q. Have you ever been instructed on how to operate one of them? A. No.

Q. How big are they?

A. They could fit on a table top. Maybe five feet, six feet long. Q. Where did you see such a machine when you did see it? A. At a trade show. Q. Was it being offered for sale by the manufacturer or somebody? 25
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Graziano BY MR. MERRICK: Q. Let me ask you a little bit about some of these smaller machines that you talked 5 about. Do you recall that testimony? A. Yes. 6 Q. I take it these smaller machines 7 8 would be used for doing Perfect-Bind work for 9 smaller projects, not the very large projects 10 that your company does, correct? I11 A. Yes. 12 Q. Now these smaller machines, are 13 they capable of doing Perfect-Bind jobs? A. Not to the extent of the quality 14 15 of our machinery. Q. I understand that you have top 16 17 quality machinery, and I respect the work that 18 you folks do, but do these smaller machines do 19 Perfect-Bind work? 20 A. Yes. Q. Are those machines available for 21 22 purchase in the marketplace? Do you know at 23 all? A. I would assume they are. 24 Q. Have you seen them in other places 25 1 2 3 4

1 2 3

A.

Q.

Graziano That would be why they are there. Do you recall who the manufacturer

4 was? A. No. 5
6

Q. Do you know whether there are more

7 than one manufacturer of these smaller types of

_________________________________________________________________________

8 machines? A. I don't know. 9 Q. Are you aware of any reason if 10 11 someone was to have some pressovers, meaning 12 extra pages? Do you know what I am talking 13 about? A. Yes. 14 Q. Why those pressovers, including 15 16 the pages and the cover, could not be 17 Perfect-Bound in one of these smaller machines? A. It would have to go through the 18 19 same operations that I put it to. Q. I am saying, supposing some 20 21 pressover of a booklet such as Exhibit 10O-A. 22 Are you with me? 23 A. Yes. Q. And the smaller machine was doing 24 25 a Perfect-Bound. I think you said that is I. _______________________________________ 22 (Pages 82 to 85)

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Q. On the tape, you make reference to
shredding any leftover materials. Would you state whether that was the practice in 1998 and 1999? A. It certainly was. Q. Were any leftover materials shredded and then baled as shown in the video? A. Yes. Q. Were they then trucked away as shown in the video? A. Yes. Q. Did that apply to unused covers and unused sheets? A. Yes. Q. The process depicted and shown in Exhibit 69, were those signatures that were being bound in the book? A. Yes. Q. You took one of the signatures off of that piece of machinery and opened it up after it was folded. Do you remember that? A. Yes. Q. I believe it was off the piece of machinery where many different signatures were
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Graziano

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Graziano

Q. And it was 24 pages?
MR. MERRICK: I object to the form of the question. A. Yes. Q. Is the cover that is used for these books one piece or multiple pieces? A. The cover that goes in the machine is one piece. Q. Then it is folded around the signatures? A. Yes. Q. To your knowledge, did Bind-Rite ever deliver to Bowne or to Goldman Sachs any unbound books? A. No. We wouldn't do that. Q. To your knowledge, has Bind-Rite ever delivered to Bowne or Goldman Sachs any loose signatures or pages? A. No, definitely not. Q. Have you ever been in the Remco facility? A. Yes. Q. Were you in it when it was operating?
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Graziano being fed and then assembled. Do you recall that? A. Correct. I do. Q. Was that a signature that you removed and opened up? MR. IVERRICK: I object to the form of the question. Repetitive. A. It is a signature, yes. Q. Was it one or more than one? A. The one I had in my hand?

Q. Yes.
A. A. Was one signature. That would have been 24 pages.

Q. Of how many pages? Q. The one I am referring to, just to
make sure that the reference is clear, was the signature that you picked up off that elongated machine where signatures, a number of different signatures, were being stacked and then assembled. MR. MERRICK: I object to the form of the question. A. It was a signature off that machine, yes.

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Graziano Yes. Q. Would you tell us whether or not the process used by Remco was similar or different than the process used at Bind-Rite? MR. MERRICK: Objection to the form of the question. Vague. A. The equipment is similar. Was. Q. Was the process similar? MR. MERRICK: Objection to the form of the question. A. Yes. Q. Did Remco do Perfect-Binding? A. Yes. Q. Was it an automated plant like yours? A. Yes. Q. Was that the case in 1998 and 1999? MR. MERRICK: Objection to the form of the question. A. Yes. Q. M~r. Merrck asked you a number of questions about whether bindings on a Goldman Sachs document could be cut, asked you a number A. 29 (Pages 110O to 113)

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Graziano of questions about whether loose pages could or could not be perfectly bound into a book. Let me ask you this. Setting aside whether that is theoretically possible, do you have any knowledge that anyone for Goldman Sachs ever cut the binding of a book and then rebound it? MR. MERRICK: Objection to the form of the question. A. Never. It doesn't sound possible. Q. Do you have any knowledge that Goldman Sachs or anybody for Goldman Sachs ever bound any loose pages for the 1998 exchange fund, 1999 exchange fund or any other fund? MR. MERRICK: Objection to the form of the question. A. No, we would never do that. MR. FEATHERSTONE: No further questions. MR. MERRICK: I have a couple of questions. EXAAvi1NATION (Continued) BY MR. MERRICK: Q. What color was the glue that Remco
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1 Graziano 2 NMR. MERRICK: That is all I have. 3 Thanks. MR. FEATHERSTONE: No further 4 5 questions. (Time noted: 4:16 p.m.L) 6 7 8 9 Subscribed and sworn to before me 10 this day of , 2005. I11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
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Graziano was using in 1998 and 1999? A. White. Q. What causes your glue to be the darker color? A. The formulation. Q. What do you mean the formulation? A. The glue becomes white when a pigment is added to it. the pigment is not If added, it doesn't become white. It remains that yellowish color. Q. So, in other words, your glue is a glue that doesn't have pigment added? A. That's correct. Q. These small machines that you told us about, what kind of glue do they use? A. I don't know. Q. What color glue do they use? A. I don't know. (Continued on next page)

1 2

CERTIFICATE

3 STATE OF NEW YORK

) Ss.:

________________________________________________________________

4 COUNTY OF NEW YORK) 5 I, JOSEPH R. DANYO, a Shorthand 6 Reporter and Notary Public within and for 7 the State of New York, do hereby certify8 That I reported the proceedings in 9 the within entitled matter, and that the 10 within transcript is a true record of such I1I proceedings. 12 I ffrther certify that Iam not 13 related, by blood or marriage, to any of 14 the parties in this matter and that I am 15 mn no way interested in the outcome of this 16 matter. 17 IN WITNESS WHEREOF, I have hereunto 18 set my hand this 12th day of September, 19 2005. 20 21 JOSEPH R. DANYO 22 23 24 25 J. ________________________________________________________ 30 (Pages 114 to 117)

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