Filed on behalf of the Petitioner

Richard Cranswick

First affidavit

Sworn this day of October, 2004

IN THE GRAND COURT OF THE CAYMAN ISLANDS

CAUSE NO OF 2004

IN THE MATTER OF THE COMPANIES LAW (2004 REVISION)

AND IN THE MATTER OF PARADIGM HOLDINGS LIMITED

AFFIDAVIT

I, Richard Cranswick of PO Box 11637 APO, Grand Cayman, Cayman Islands, British West Indies make oath and say as follows:

  1. I make this affidavit in support of a petition for provisional liquidation of Paradigm Holdings Limited (the “Company”).
  1. The matters contained within this affidavit and deposed to herein are within my knowledge and are true. Where matters deposed to herein are not within my direct knowledge, I set out the source of knowledge and verily believe such matters to be true.
  1. I am a British National. At all material times I was the accountant employed by the Company and as such have knowledge of the financial transactions relating to funds received by the company subsidiary Architects of Wine Limited (“AoW”) and the subsidiary AVE International (“AVE”).
  1. I am aware of transactions where customers who had purchased wine contracts from AoW and sent in installment payments did not have those funds forwarded for the purchase of the contracts. The funds were transferred from AoW to AVE instead. The funds were then sent to different customers who had contracted with AVE to have their wine purchased. Now produced and shown to me and marked “RC-1” are copies of payment schedules and account statements setting out several of this type of transaction. As can be seen from the payment schedule the total payments to AVE purchasers is US$287,964.45 plus bank charges. The account statement shows a transfer of that amount. The next series of payments totaled US$ 376,223.99 and these were part paid in arrears in December 2003, with three payments totaling approximately US$ 200,000.
  1. In looking at the transactions outlines in “RC-1” the transfers to A.V.E. North America Ltd were actually transfers to AVE. AVE had only one bank account.
  1. I became disillusioned with the Company when I started to see these type of transactions and could not get any explanation for them from Robert Middlemiss who was my ultimate superior. He became increasingly more difficult to find and speak to. I sought instructions from my immediate superior Diana Church and she was having the same communication problems. Ultimately there was no business explanation provided for the transfers of customer deposit money to AVE. I had no support and did not like what was taking place. My immediate superior, Diana Church and myself resigned from the company. AVE was increasingly contracting to buy wines from AoW customers and there were no funds available to my knowledge to pay for these contracts. Now produced and shown to me and marked “RC-2” is a copy of the payment schedule as of March 2004 showing moneys due and payable of approximately US $11,308,417.79.

______

Richard Cranswick

Sworn before me on the 11th

Day of October 2004

______

Notary Public

THIS AFFIDAVIT was filed by Broadhurst DaCosta, the attorneys-at-law for the Petitioner, whose address for service is 40 Linwood Street, P.O. Box 2503, George Town, Grand Cayman, Cayman Islands, B.W.I.