AGREEMENT TO CONVERT DEBT

      This Agreement to Convert Debt (the "Agreement") is made as of the 7th day
of November 2005 (the "Effective Date") by and between USDR Aerospace, Ltd.
(referred to herein as the "Holder") and US Global Nanospace, Inc., a Delaware
corporation (referred to herein as the "Company").

                                    RECITALS

      A. Since inception, the Company has received employee and product services
from the Holder, and currently owes the Holder the sum of $300,720.44 (the
"Amount Owed").

      B. The Company wishes to pay the Amount Owed by issuing securities to the
Holder and the Holder has agreed to accept the Company's securities as full and
final payment of the Amount Owed, in accordance with the terms of this
Agreement.

      Therefore, the Company and the Holder agree as follows:

                                    AGREEMENT

      1. Transfer of Securities and Cancellation of Debt.

            (a) Securities to be Issued. The Holder agrees to accept, and the
      Company agrees to issue and transfer to the Holder, 4,009,660 shares of
      the Company's Common Stock, $0.001 par value, having a value of $0.075 per
      share, which was the closing price of the Common Stock on the Effective
      Date. The Common Stock issued in payment of the Amount Owed shall be
      referred to in this Agreement as the "Shares".

            (b) Documents. The certificates representing the Shares shall be
      delivered to the Holder as soon as practicable. Upon receipt of the
      Shares, the Company shall record the payment on its books and records.

      2. Representations by Company.

         The Company hereby represents and warrants to the Holder as follows:

                  (i) The Company is duly organized, validly existing and in
            good standing under the laws of the State of Delaware.

                  (ii) The Company has all requisite power and authority
            (corporate or otherwise) to execute, deliver and perform this
            Agreement and the transactions contemplated thereby, and the
            execution, delivery and performance by the Company of this Agreement
            has been duly authorized by all requisite action by the Company and
            this Agreement, when executed and delivered by the Company,
            constitutes a valid and binding obligation of the Company,
            enforceable against the Company in accordance with its terms,
            subject to applicable bankruptcy, insolvency, reorganization,
            fraudulent conveyance, moratorium or other similar laws affecting
            creditors' rights and remedies generally, and subject, as to
            enforceability, to general principles of equity (regardless of
            whether enforcement is sought in a proceeding at law or in equity).


<PAGE>


                  (iii) The execution, delivery and performance by the Company
            of this Agreement have been duly authorized by all requisite
            corporate action of the Company; and this Agreement has been duly
            executed and delivered by the Company.

                  (iv) The Shares will be duly and validly issued, fully paid
            and nonassessable, and free of any liens or encumbrances.

      3. Representations by the Holder.

         The Holder hereby represents and warrants to the Company as follows:

                  (i) The Holder has all requisite power and authority
            (corporate or otherwise) to execute, deliver and perform this
            Agreement and the transactions contemplated thereby, and the
            execution, delivery and performance by the Holder of this Agreement
            has been duly authorized by all requisite action by the Holder and
            this Agreement, when executed and delivered by the Holder,
            constitutes a valid and binding obligation of the Holder,
            enforceable against the Holder in accordance with its terms, subject
            to applicable bankruptcy, insolvency, reorganization, fraudulent
            conveyance, moratorium or other similar laws affecting creditors'
            rights and remedies generally, and subject, as to enforceability, to
            general principles of equity (regardless of whether enforcement is
            sought in a proceeding at law or in equity).

                  (ii) The Holder has a pre-existing personal or business
            relationship with the Company and its officers and directors.

                  (iii) The Holder is an "accredited investor", as that term is
            defined in Rule 501 of Regulation D in that the Holder is a director
            and officer of the Company.

                  (iv) The Holder has complied with all applicable investment
            laws and regulations in force relating to the legality of an
            investment in the Shares in the jurisdiction in which he is subject,
            and the Holder has obtained any consent, approval or permission
            required in that jurisdiction.

                  (v) The Holder understands and acknowledges that the Shares
            have not been registered with the Securities and Exchange Commission
            under Section 5 of the of the Securities Act or registered or
            qualified with any applicable state or territorial securities
            regulatory agency in reliance upon one or more exemptions afforded
            from registration or qualification.

                  (vi) The Holder understands and acknowledges that the Shares
            are deemed to be "restricted" securities under the Securities Act,
            and may be re-sold only pursuant to exemptions provided by the
            Securities Act. The Holder understands and acknowledges that the
            Company is required to place a legend on each certificate stating
            that the Shares have not been registered under the Securities Act.


<PAGE>


                  (vii) The Holder understands and acknowledges that: (i) prior
            to any sale, transfer, assignment, pledge, hypothecation or other
            disposition of the Shares, he must either: (1) furnish the Company
            with an opinion of counsel, in form and substance reasonably
            satisfactory to the Company and to its legal counsel, to the effect
            that such disposition is exempted from the registration and
            prospectus delivery requirement under the Securities Act and the
            securities laws of the jurisdiction in which the Holder resides, and
            legal counsel for the Company shall have concurred in such opinion;
            or (2) satisfy the Company that a registration statement on Form
            SB-2 under the Securities Act (or any other form appropriate under
            the Securities Act, or any form replacing any such form) with
            respect to the securities proposed to be so disposed of shall then
            be effective; and that such disposition shall have been
            appropriately qualified or registered in accordance with the
            applicable securities laws of the jurisdiction in which the Holder
            resides.

                  (viii) The Holder is entering into this transaction for the
            Holder's own account, own risk and own beneficial interest, is not
            acting as an agent, representative, intermediary, nominee or in a
            similar capacity for any other person or entity, nominee account or
            beneficial owner, whether a natural person or entity (each such
            natural person or entity, an "Underlying Beneficial Owner") and no
            Underlying Beneficial Owner will have a beneficial or economic
            interest in the Shares (whether directly or indirectly, including
            without limitation, through any option, swap, forward or any other
            hedging or derivative transaction) and does not have the intention
            or obligation to sell, pledge, distribute, assign or transfer all or
            a portion of the Shares to any Underlying Beneficial Owner or any
            other person.

                  (ix) The Holder hereby represents and warrants that the
            proposed investment in the Company does not directly or indirectly
            contravene United States federal, state, local or international laws
            or regulations applicable to the Holder, including anti-money
            laundering laws (a "Prohibited Investment").

                  (x) Federal regulations and Executive Orders administered by
            the U.S. Treasury Department's Office of Foreign Assets Control
            ("OFAC") prohibit, among other things, the engagement in
            transactions with, and the provision of services to, certain foreign
            countries, territories, entities and individuals. The lists of OFAC
            prohibited countries, territories, persons and entities can be found
            on the OFAC website at <www.treas.gov/ofac>. The Holder hereby
            represents and warrants that the Holder is not a country, territory,
            person or entity named on an OFAC list, nor is the Holder a natural
            person or entity with whom dealings are prohibited under any OFAC
            regulations.

                  (xi) The Holder represents and warrants that neither the
            Holder nor any Underlying Beneficial Owner is a senior foreign
            political figure, or any immediate family member or close associate
            of a senior foreign political figure within the meaning of, and
            applicable guidance issued by the Department of the Treasury
            concerning, the U.S. Bank Secrecy Act (31 U.S.C. ss.5311 et seq.),
            as amended, and any regulations promulgated thereunder.


<PAGE>

                  (xii) The Holder agrees promptly to notify the Company should
            the Holder become aware of any change in the information set forth
            in subparagraphs (viii) through (xi).

                  (xiii) The Holder agrees to indemnify and hold harmless the
            Company, its affiliates, their respective directors, officers,
            shareholders, employees, agents and representatives from and against
            any and all losses, liabilities, damages, penalties, costs, fees and
            expenses (including legal fees and disbursements) which may result,
            directly or indirectly, from the Holder's misrepresentations or
            misstatements contained herein or breaches hereof relating to
            paragraphs (viii) through (xi).

                  (xiv) The Holder understands and agrees that, notwithstanding
            anything to the contrary contained in any document (including any
            side letters or similar agreements), if, following the Holder's
            investment in the Company, it is discovered that the investment is
            or has become a Prohibited Investment, such investment may
            immediately be redeemed by the Company or otherwise be subject to
            the remedies required by law, and the Holder shall have no claim
            against the Company for any form of damages as a result of such
            forced redemption or other action.

                  (xv) Upon the written request from the Company, the Holder
            agrees to provide all information to the Company to enable the
            Company to comply with all applicable anti-money laundering
            statutes, rules, regulations and policies, including any policies
            applicable to a portfolio investment held or proposed to be held by
            the Company. The Holder understands and agrees that the Company may
            release confidential information about the Holder and any Underlying
            Beneficial Owner(s) to any person if the release of such information
            is necessary to comply with applicable statutes, rules, regulations
            and policies.

      4. Miscellaneous.

            (a) Amendments and Waivers. The provisions of this Agreement may not
      be amended, modified or supplemented, and waivers or consents to
      departures from the provisions hereof may not be given, unless the same
      shall be in writing and signed by the Company and the Holder.


                                       5
<PAGE>


            (b) Notices. Any and all notices or other communications or
      deliveries to be provided by the Holder hereunder shall be in writing and
      delivered personally, by facsimile or sent by a nationally recognized
      overnight courier service, addressed to the Company at 1016 Harris Road,
      Arlington, Texas 76001, facsimile number (817) 375-3401, Attn: Secretary
      or such other address or facsimile number as the Company may specify for
      such purposes by notice to the Holder delivered in accordance with this
      Section. Any and all notices or other communications or deliveries to be
      provided by the Company hereunder shall be in writing and delivered
      personally, by facsimile, sent by a nationally recognized overnight
      courier service addressed to the Holder at an address and facsimile number
      to be provided by Holder. Any notice or other communication or deliveries
      hereunder shall be deemed given and effective on the earliest of (i) the
      date of transmission, if such notice or communication is delivered via
      facsimile at the facsimile telephone number specified in this Section
      prior to 5:30 p.m. (Central time), (ii) the date after the date of
      transmission, if such notice or communication is delivered via facsimile
      at the facsimile telephone number specified in this Section later than
      5:30 p.m. (Central time) on any date and earlier than 11:59 p.m. (Central
      time) on such date, (iii) the second Business Day following the date of
      mailing, if sent by nationally recognized overnight courier service, or
      (iv) upon actual receipt by the party to whom such notice is required to
      be given.


            (c) Successors and Assigns. This Agreement shall inure to the
      benefit of and be binding upon the successors and permitted assigns of
      each of the parties. Neither the Holder nor the Company may assign its
      rights or obligations hereunder without the prior written consent of the
      other.

            (d) Counterparts. This Agreement may be executed in any number of
      counterparts, each of which when so executed shall be deemed to be an
      original and, all of which taken together shall constitute one and the
      same Agreement. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid binding obligation of
      the party executing (or on whose behalf such signature is executed) the
      same with the same force and effect as if such facsimile signature were
      the original thereof.

            (e) Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal, void or unenforceable, the remainder of the terms, provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected, impaired or invalidated, and the
      parties hereto shall use their reasonable efforts to find and employ an
      alternative means to achieve the same or substantially the same result as
      that contemplated by such term, provision, covenant or restriction. It is
      hereby stipulated and declared to be the intention of the parties that
      they would have executed the remaining terms, provisions, covenants and
      restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

            (f) Headings. The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

            IN WITNESS WHEREOF, the parties have executed this Agreement to
      Convert Debt as of the date first written above.


                            US GLOBAL NANOSPACE, INC.


                            By: /s/ Carl Gruenler
                            ---------------------------------
                            Carl Gruenler, President


                            USDR AEROSPACE, LTD.


                            By: /s/ John Robinson
                            ---------------------------------
                            John Robinson, President