PREFERRED STOCK REDEMPTION AGREEMENT

THIS PREFERRED STOCK REDEMPTION AGREEMENT (this “ Agreement ”), dated as of February 27, 2009, is made by and among Paradigm Holdings, Inc., a Wyoming corporation (the “ Company ”), Semper Finance, Inc., a Delaware corporation, and USA Asset Acquisition Corp. (each a “ Stockholder ,” and, collectively, the “ Stockholders ”).

WHEREAS, Hale Capital Partners, LP and EREF PARA LLC (collectively, the “ Investors ”) and the Company propose to enter into a Preferred Stock Purchase Agreement dated as of February 27, 2009 (as the same may be amended or supplemented, the “ Purchase Agreement ”) providing for the purchase by the Investors of shares of Series A-1 Senior Preferred Stock, $0.01 par value per share, of the Company (the “ Series A-1 Preferred Stock ”) and certain series of warrants (the “ Warrants ”) to purchase Common Stock, $0.01 par value per share, of the Company (the “ Common Stock ”) (the transactions contemplated by the Purchase Agreement, including without limitation the issuance of securities thereunder and the amendment or amendment and restatement of the Company’s Articles of Incorporation, the “ Transactions ”);

WHEREAS, each Stockholder is the record and beneficial owner of such number of shares of Series A Preferred Stock of the Company (the “ Series A Preferred Stock ”) set forth opposite such Stockholder’s name on Schedule I hereto (such shares of Series A Preferred Stock, the “ Shares ”).

WHEREAS, the Stockholders have agreed with the Company to sell the Series A Preferred Stock held by them for the Purchase Price (as defined below).

WHEREAS, as a condition to the execution and delivery of the Purchase Agreement, the Investors have requested that the Stockholders enter into this Agreement; and

WHEREAS, the Stockholders believe that the execution, delivery and performance of the Purchase Agreement and the consummation of the Transactions is in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein, the Stockholders agree as follows:

1.      Sale of Series A Preferred Stock .  At the closing of the Transactions, each Stockholder agrees to sell all Shares held by such Stockholder for the consideration set forth opposite such Stockholder’s name on Schedule I hereto (the “ Purchase Price ”).  At the closing of the Transactions, each Stockholder shall deliver all share certificates evidencing all of said Stockholder’s Shares to the Company and shall execute a stock power separate from the certificate transferring the Stockholder’s Shares to the Company and the Company shall deliver to each Stockholder the Purchase Price for such Stockholder’s Shares.

2.      Representations and Warranties of the Stockholders .  Each Stockholder hereby, severally and not jointly, represents and warrants to the Company as follows:

(a)   Authority .  The Stockholder has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Stockholder.  This Agreement has been duly executed and delivered by the Stockholder and, assuming this Agreement constitutes a valid and binding obligation of the other parties hereto, constitutes a valid and binding obligation of the Stockholder enforceable against the Stockholder in accordance with its terms.  Neither the execution, delivery or performance of this Agreement by the Stockholder nor the consummation by the Stockholder of the transactions contemplated hereby will (i) require any filing with, or permit, authorization, consent or approval of, any federal, state, local or municipal foreign or other government or subdivision, branch, department or agency thereof or any governmental or quasi-governmental authority of any nature, including any court or other tribunal, (a “ Governmental Entity ”), or (ii) violate any judgment, order, writ, preliminary or permanent injunction or decree or any statute, law, ordinance, rule or regulation of any Governmental Entity applicable to the Stockholder or any of the Stockholder’s properties or assets, including the Stockholder’s Shares.

(b)  The Shares .  Subject to the terms of this Agreement, the Series A Preferred Stock and the certificates representing such Shares are now held by such Stockholder, or by a nominee or custodian for the benefit of such Stockholder.  The Stockholder has good and marketable title to such Shares, free and clear of any Liens, proxies, voting trusts or agreements, understandings or arrangements, except for any such Liens or proxies arising hereunder.  The Stockholder owns of record or beneficially no Series A Preferred Stock other than the Shares as set forth on Schedule I hereto.

(c)  P urchase Agreement .  Each Stockholder understands and acknowledges that the Investors are entering into the Purchase Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement.

(d)   Information . Each Stockholder has had an opportunity to ask questions of, and receive answers from, the officers of the Company concerning the Transactions and the Company’s business, management and financial affairs, which questions were answered to its satisfaction.  Each Stockholder believes that it has received all the information such Stockholder considers necessary or appropriate for deciding whether to sell the Shares.  Each Stockholder acknowledges that it is relying solely on its own counsel and not on any statements or representations of the Company or its agents for legal advice with respect to the sale of the Shares.

3.      Further Assurances .  Each S