EXHIBIT 10.5

                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE

         THIS SETTLEMENT  AGREEMENT AND MUTUAL RELEASE  ("Agreement") is made as
of November 20, 2002 by and among ERBC Holdings,  Ltd., a British Virgin Islands
corporation  ("ERBC"),  US Global  Aerospace,  Inc., a publicly  traded Delaware
corporation  (OTCBB:  USGA) ("USGA"),  USDR Global  Aerospace,  Ltd., a Delaware
corporation and wholly owned subsidiary of USGA ("Global"),  and USDR Aerospace,
Ltd., a Texas limited  partnership under common control with USGA  ("Aerospace")
(USGA,  Global and Aerospace are sometimes referred to hereinafter  collectively
as the "USGA Parties"),  Live Oak Capital,  LLC, a New Jersey limited  liability
company  ("Live Oak"),  Nicholas  Lattanzio,  an individual  who is the managing
member of Live Oak ("Lattanzio"),  Margaret K. Curtis, an individual ("Curtis"),
Smith Point Capital,  Ltd., a Nevada corporation ("Smith Point"),  and Daniel T.
Guilfoile,  an individual who is the President of Smith Point ("Guilfoile"),  on
the  other  hand.  All  of the  foregoing  parties  are  sometimes  referred  to
hereinafter collectively as the "Parties", and each, individually, as a "Party".


                                    RECITALS

         A. Live Oak agreed to provide  $550,000 to ERBC at each of two closings
scheduled  to  occur in May  2002  pursuant  to  certain  transaction  documents
described below.

         B. ERBC and Live Oak executed  that  certain Note and Warrant  Purchase
Agreement,  dated as of May 8, 2002 (the "Note and Warrant Purchase Agreement"),
pursuant to which, among other things,  ERBC sold to Live Oak (i) the First Note
as defined below, (ii) the First Warrant as defined below, (iii) the Second Note
as defined below, and (iv) the Second Warrant as defined below.

         C. ERBC  executed  that certain  ERBC  Holdings,  Ltd. 10%  Convertible
Promissory Note, dated May 8, 2002, in favor of Live Oak in the principal amount
of $550,000 (the "First Note"), pursuant to which ERBC pledged 125,000 shares of
common stock of USGA as security for the First Note.

         D. ERBC  executed  on May 8, 2002 and  issued to Live Oak that  certain
Warrant to purchase  62,500 freely  trading  shares of common stock of USGA (the
"First Warrant").

         E. ERBC  executed  that certain  ERBC  Holdings,  Ltd. 10%  Convertible
Promissory Note, dated May 8, 2002, in favor of Live Oak in the principal amount
of $550,000 (the "Second  Note"),  pursuant to which ERBC pledged 125,000 shares
of common stock of USGA as security for the Second Note.

         F. ERBC  executed  on May 8, 2002 and  issued to Live Oak that  certain
Warrant to purchase  62,500 freely  trading  shares of common stock of USGA (the
"Second Warrant").


<PAGE>

         G. ERBC, Live Oak as "Purchaser" and Gersten, Savage, Kaplowitz, Wolf &
Marcus, LLP as "Escrow Agent" executed that certain Escrow Agreement,  dated May
8, 2002, pursuant to which the Escrow Agent agreed to hold the 250,000 shares of
common  stock of USGA that ERBC  pledged as security  for the First Note and the
Second Note (the "Escrow Agreement").

         H. Live Oak did not provide any funds at the First  Closing (as defined
in Section 2.1 of the Note and Warrant  Purchase  Agreement)  as required by the
Note and Warrant Purchase Agreement.

         I. At ERBC's and Live Oak's instruction, Curtis wired $100,000 directly
to the USGA  Parties'  account on May 21, 2002 and,  at Live Oak's  instruction,
Care Temps, Inc., a client of Live Oak ("Care Temps"), wired $50,000 directly to
the USGA Parties' account on May 23, 2002; and, at ERBC's instruction,  Live Oak
wired  $205,000  directly  to the USGA  Parties'  account  on June 26,  2002 and
thereabout  delivered  $5,000  directly to 3rd  Millenium  Management,  LLC (c/o
Richard Schineller) for services rendered or to be rendered to USGA, for a total
of $360,000 out of the $550,000 that Live Oak had  previously  agreed to provide
at the First Closing.

         J.  Live Oak  subsequently  advised  ERBC  that it would not be able to
provide any additional funds as required under the Agreements.

         K. ERBC and Smith  Point are the  parties  to that  certain  Engagement
Agreement  dated May 16, 2002 (the "Smith Point  Agreement"),  pursuant to which
ERBC is obligated to pay Smith Point 10% of the gross sales price of  securities
sold to persons  introduced to ERBC by Smith Point, and issue a warrant to Smith
Point to purchase 12,500 registered shares of common stock of USGA held by ERBC.

         L. No monetary  compensation  has been paid to Smith Point  pursuant to
the Smith Point Agreement;  however, pursuant to the Smith Point Agreement, ERBC
issued  Smith Point a Warrant to  purchase  12,500  registered  shares of common
stock of CPRD held by ERBC (the "Smith Point  Warrant");  Smith Point has agreed
to waive any and all monetary compensation due to it pursuant to the Smith Point
Agreement and cancel the Smith Point Warrant in its entirety.

         M. The Note and Warrant Purchase  Agreement,  the First Note, the First
Warrant,  the Second Note, the Second Warrant,  the Escrow Agreement,  the Smith
Point  Agreement and the Smith Point  Warrant are  sometimes  referred to herein
collectively as the "Agreements."

         N. The Parties desire to settle the dispute  arising from the foregoing
events.


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<PAGE>



                                    AGREEMENT

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
promises,  covenants  and  conditions  herein  contained,  the Parties  agree as
follows:

         1.  Termination  of  Agreements.  Each  of  the  Agreements  is  hereby
terminated,  rescinded  and cancelled in its entirety and is of no further force
or effect.

         2.  Release  of the USGA  Shares  to Live  Oak;  Valuation  of  Shares.
Anything in the Agreements to the contrary  notwithstanding,  upon the execution
of this  Agreement  by all Parties,  the 125,000  shares of common stock of USGA
pledged  under the First  Note and the  125,000  shares of common  stock of USGA
pledged under the Second Note are hereby  released to Live Oak in full and final
satisfaction  of $125,000 of the debt of $310,000 that Live Oak funded after the
First Closing. Accordingly, upon the execution of this Agreement by all Parties,
ERBC hereby instructs the Escrow Agent to release to Live Oak the 250,000 shares
of common stock of USGA in its  possession.  For the purposes of this Agreement,
the 250,000  shares of common  stock of USGA held by the Escrow  Agent,  and the
shares issuable under Section 3 below, are valued at $0.50 per share.

         3. Tender of Additional USGA Shares to Live Oak.

         Concurrently with the Parties' execution of this Agreement,  USGA shall
execute and deliver irrevocable  instructions to its transfer agent, in the form
of Exhibit A attached  hereto,  effecting  the  issuance  to Live Oak and/or its
designee(s)  of 370,000  restricted  shares of common  stock of USGA in full and
final  satisfaction of the remaining  $185,000 of the original debt of $310,000,
and  15,204  restricted  shares  of  common  stock  of USGA in  full  and  final
satisfaction  of all interest  accrued thereon at the rate of 10% per annum from
the last  funding  date of June 26,  2002 up to and  including  the date of this
Agreement,  for a total of 385,204  restricted shares of common stock of USGA to
be issued to Live Oak pursuant to this Section 3.

         4. Releases.

         (a) Live Oak, Lattanzio, Curtis, Smith Point and Guilfoile each hereby,
for  itself/himself/herself,  and,  as the  case  may be,  its/his/her  past and
present  employees,  officers,  directors,  agents,  executors,  administrators,
trustees, partners, members, managers,  representatives,  parents, subsidiaries,
controlled entities and affiliates,  successors and assigns,  forever discharges
and releases (i) ERBC (except as to any matters related to Care Temps), and each
of its past and  present  employees,  officers,  directors,  agents,  attorneys,
insurers,  representatives  (including,  without  limitation,  Richard A. Wall),
assigns, subsidiaries,  parents, predecessors,  successors and related entities,
and (ii) each of the USGA  Parties  (except  as to any  matters  related to Care
Temps),  and each of their  respective  past and  present  employees,  officers,
directors, agents, attorneys, insurers, representatives,  assigns, subsidiaries,
parents, predecessors, successors and related entities, from any and all claims,
damages,  actions,   judgments,   obligations,   attorneys'  fees,  indemnities,
subrogations,  duties, demands, controversies and



                                       3
<PAGE>

liabilities of every nature at law or in equity,  liquidated,  or  unliquidated,
known or unknown, matured or unmatured, foreseeable or unforeseeable, which they
had or have arising out of any circumstance, thing, or event alleged, or arising
out of the  Agreements  and any ancillary  agreement or instrument  entered into
pursuant  thereto,  the Smith Point  Agreement  and any  ancillary  agreement or
instrument  entered into pursuant thereto,  and any and all other matters of any
nature  whatsoever,  including  without  limitation  any and all past,  present,
pending or threatened litigation.

                  (b) ERBC and each of the USGA Parties each hereby, for itself,
and   its   past   and   present   employees,   officers,   directors,   agents,
representatives,  parents,  subsidiaries,  controlled  entities and  affiliates,
successors and assigns,  forever  discharges and releases Live Oak (except as to
any matters related to Care Temps),  Lattanzio,  Curtis, Smith Point,  Guilfoile
and,  as the case may be,  each of their  past and  present  employees,  agents,
executors,  administrators,   trustees,  heirs,  attorneys,  partners,  members,
managers,   insurers,    representatives,    assigns,   subsidiaries,   parents,
predecessors,  successors and related entities from any and all claims, damages,
actions,  judgments,  obligations,  attorneys' fees, indemnities,  subrogations,
duties,  demands,  controversies  and  liabilities  of every nature at law or in
equity,  liquidated,  or unliquidated,  known or unknown,  matured or unmatured,
foreseeable  or  unforeseeable,  which  they  had  or  have  arising  out of any
circumstance,  thing, or event alleged, or arising out of the Agreements and any
ancillary agreement or instrument entered into pursuant thereto, the Smith Point
Agreement  and any  ancillary  agreement or  instrument  entered  into  pursuant
thereto,  and any and all other  matters  of any  nature  whatsoever,  including
without limitation any and all past, present, pending or threatened litigation.

                  (c) ERBC,  for  itself,  and its past and  present  employees,
officers,  directors,  agents,  representatives (including,  without limitation,
Richard A. Wall),  parents,  subsidiaries,  controlled  entities and affiliates,
successors and assigns, forever discharges and releases each of the USGA Parties
and each of their  past and  present  employees,  officers,  directors,  agents,
attorneys,   insurers,   representatives,    assigns,   subsidiaries,   parents,
predecessors,  successors and related entities from any and all claims, damages,
actions,  judgments,  obligations,  attorneys' fees, indemnities,  subrogations,
duties,  demands,  controversies  and  liabilities  of every nature at law or in
equity,  liquidated,  or unliquidated,  known or unknown,  matured or unmatured,
foreseeable  or  unforeseeable,  which  they  had  or  have  arising  out of any
circumstance,  thing, or event alleged, or arising out of the Agreements and any
ancillary agreement or instrument entered into pursuant thereto, the Smith Point
Agreement  and any  ancillary  agreement or  instrument  entered  into  pursuant
thereto,  and any and all other  matters  of any  nature  whatsoever,  including
without limitation any and all past, present, pending or threatened litigation.

                  (d) Each of the USGA Parties  hereby for itself,  and its past
and present employees,  officers, directors, agents,  representatives,  parents,
subsidiaries,  controlled  entities  and  affiliates,  successors  and  assigns,
forever discharges and releases ERBC and each of its past and present employees,
officers,  directors, agents, attorneys,  insurers,  representatives (including,
without  limitation,   Richard  A.  Wall),   assigns,   subsidiaries,   parents,
predecessors,  successors and related entities from any and all claims, damages,
actions,  judgments,  obligations,  attorneys' fees, indemnities,  subrogations,
duties,  demands,  controversies  and  liabilities  of every nature at law or in
equity,  liquidated,  or unliquidated,  known or unknown,  matured or unmatured,
foreseeable  or



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<PAGE>

unforeseeable, which they had or have arising out of any circumstance, thing, or
event alleged,  or arising out of the Agreements and any ancillary  agreement or
instrument entered into pursuant thereto,  and the Smith Point Agreement and any
ancillary  agreement or  instrument  entered into  pursuant  thereto,  including
without limitation any and all past, present,  pending or threatened  litigation
related thereto.

                  (d)  Each of the  Parties  understands  and  agrees  that  the
releases  set  forth  above  extend  to all  claims of every  kind,  nature  and
description whatsoever, known or unknown, suspected or unsuspected.  Each of the
Parties  understands  and  acknowledges  that  he/she/it  is  familiar  with and
expressly  waives and relinquishes  every right or benefit  he/she/it has or may
have under the  provisions  of Section 1542 of the Civil Code of  California  or
under any  comparable  statute of any other  jurisdiction.  Section  1542 of the
Civil Code of the State of California, reads as follows:

                  "A  general  release  does not  extend  to  claims  which  the
creditor does not know or suspect to exist in his favor at the time of executing
the release,  which if known by him must have materially affected his settlement
with the debtor."

         5. No  Disparagement.  Each Party  hereby  agrees to  refrain  from any
communication  with any other person,  entity,  regulatory  body or governmental
authority  which in any way  disparages or defames any other Party,  unless such
communication  is required in response to a valid order by a court of  competent
jurisdiction or other  governmental or regulatory body, or as otherwise required
by applicable law.

         6. Entire  Agreement.  This Agreement  contains the sole,  complete and
entire  agreement  and  understanding  of the  Parties  concerning  the  matters
contained  herein  and may not be  altered,  modified,  or changed in any manner
except by a writing  duly  executed by the  Parties.  No Party is relying on any
representations  other than those  expressly  set forth  herein.  No  conditions
precedent to the effectiveness of this Agreement exists, other than as expressly
provided for herein. There are no oral or written collateral  agreements hereto.
All prior discussions and negotiations have been and are merged, integrated into
and superseded by this Agreement.

         7. Waiver. The delay or failure of a Party to exercise any right, power
or  privilege  hereunder,  or failure to strictly  enforce any breach or default
shall not  constitute a waiver with respect  thereto;  and no waiver of any such
right, power, privilege,  breach or default on any one occasion shall constitute
a waiver thereof on subsequent  occasion unless clear and express notice thereof
in writing is provided.

         8. Applicable  Law;  Venue.  Anything in the Agreements to the contrary
notwithstanding,  this Agreement shall be governed by and construed and enforced
in accordance  with and subject to the laws of the State of California,  and any
and all  actions  brought  under  this  Agreement  shall be brought in the state
and/or  federal  courts of the United States sitting in the City of Los Angeles,
State of California.



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<PAGE>

         9. Advice of Counsel. The Parties represent that prior to the execution
of this  Agreement  they had the  opportunity to seek the benefit of independent
legal counsel of their own selection regarding the substance of this Agreement.

         10. No Liability.  This Agreement is executed by the Parties hereto for
the sole purpose of settling the matters described  herein,  and it is expressly
understood and agreed,  as a condition  hereof,  that this Agreement  should not
constitute  nor be construed to be an admission of the truth or  correctness  of
any claim asserted.


         11. Warranties.  The Parties,  and each of them,  warrant:  (i) that no
other person or entity had or has or claims,  any interest in any of the claims,
demands, causes of action, or damages covered in this Agreement; (ii) that they,
and each of them,  have the sole right and  exclusive  authority to execute this
Agreement; and (iii) that they have not sold, assigned, transferred, conveyed or
otherwise disposed of any claim, demand, cause of action, obligation,  damage or
liability covered in this Agreement.

         12.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts, all of which together constitute one single document.

         13. Facsimile Signatures.  This Agreement and any documents relating to
it may be  executed  and  transmitted  to any other  party by  facsimile,  which
facsimile  shall be deemed to be, and  utilized in all respects as, an original,
wet-inked document.


                            [SIGNATURE PAGES FOLLOW]

                                       6
<PAGE>



         IN WITNESS  WHEREOF,  the parties hereto have executed this  Settlement
Agreement and Mutual Release as of the day and year first written above.

                             ERBC HOLDINGS, LTD.,
                             A British Virgin Islands corporation


                             By:  ________________________________
                             Name:    Kurt Seifman
                             Title:   President


                             US GLOBAL AEROSPACE, INC., a Delaware corporation

                             By:  ________________________________
                             Name:  John Robinson
                             Title:   Chief Executive Officer

                             USDR GLOBAL AEROSPACE, LTD., a Delaware corporation

                             By:  _______________________________
                             Name:  John Robinson
                             Title:  Chief Executive Officer

                             USDR Aerospace, Ltd., a Texas limited partnership

                             By:  _______________________________
                             Name:  John Robinson
                                     Title:


                       [SIGNATURES CONTINUE ON NEXT PAGE]


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<PAGE>



         [SIGNATURE PAGE TWO OF SETTLEMENT AGREEMENT AND MUTUAL RELEASE]

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Settlement
Agreement and Mutual Release as of the day and year first written above.

                         LIVE OAK CAPITAL, LLC,
                         a New Jersey limited liability company

                         By:  ________________________________
                         Name:    Nicholas Lattanzio
                         Title:   Managing Member


                         ------------------------------------
                         NICHOLAS LATTANZIO, an individual


                         ------------------------------------
                         MARGARET K. CURTIS, an individual


                         SMITH POINT CAPITAL, LTD.,
                         a Nevada corporation

                         By:  ________________________________
                         Name:  Daniel T. Guilfoile
                         Title:   President



                         -----------------------------------
                         DANIEL T. GUILFOILE


                        [SIGNATURES FOLLOW ON NEXT PAGE]


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<PAGE>



        [SIGNATURE PAGE THREE OF SETTLEMENT AGREEMENT AND MUTUAL RELEASE]


AGREED AND ACKNOWLEDGED:


GERSTEN, SAVAGE, KAPLOWITZ WOLF & MARCUS LLP

By:  ______________________________________
Name:
Title:


                            ************************

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