Document:

Exhibit
      10.2

     

    MODIFICATION
      TO SETTLEMENT AGREEMENT

     

    Pursuant
      to Section 13 of the AGREEMENT OF SETTLEMENT AND MUTUAL RELEASE (the
      "Agreement"), this MODIFICATION TO SETTLEMENT AGREEMENT AND MUTUAL RELEASE
      is
      entered into by and between Defendant U.S. Global Nanospace, Inc. (f/k/a U.S.
      Global Aerospace, Inc.) ( “USGN”) and Plaintiff Everest International, Inc.
      f/k/a West Harris Property, Inc. (“Everest”). USGN and Everest hereby agree to
      the following modification of USGN’s obligations under Section 2 of the
      Agreement:

     

    
      	2.  	
              In
                consideration of this Agreement, USGN agrees to the
                

            

    

    following:

    

    
      	 	
              (a)

            	
              conveyance
                and transfer of ownership of the items listed in ¶ 1, above, to Everest by
                June
                21, 2006,
                along with all documents, titles, keys and combinations necessary
                to
                transfer ownership; 

            

    

    

    
      	 	
              (b)

            	
              other
                than the items set forth in ¶ 1 above, removal of all other items
                belonging to USGN, USDR and Seaman that are remaining on the Property,
                leaving the Property broom clean, within ten calendar days of June
                21, 2006,
                in the following order: 

            

    

    
      	 	
              i.

            	
              removal
                of property in the fenced parking area of the Property, including
                the 48’
                truck trailer located on the
                Property;

            

    

    
      	 	
              ii.

            	
              removal
                of the three large storage units behind the building located on the
                Property;

            

    

    
      	 	
              iii.

            	
              removal
                of the chemicals stored in the southwest corner of the building located
                on
                the Property, including all cabinets and
                containers;

            

    

    
      	 	
              iv.

            	
              removal
                of the contents of the warehouse area of the building located on
                the
                Property; and

            

      	 	v. 	
              removal
                of all files and computers owned by USGN in the office area of the
                building located on the Property;

            

    

    

    
      	 	
              (c)

            	
              issuance
                of 893,617 shares (closing price on June 12, 2006 of $.047 per share)
                of
                restricted common stock of USGN to Everest (the “Shares”) within ten
                calendar days of June
                21, 2006;

            

      	 	 	
            

      	 	(d)	
              tender
                cash payment in the amount of $10,000 to Everest by June
                21, 2006;
                

            

      	 	 	 

      	 	(e)	
              forfeit
                all claims to the $11,000 security deposit paid to Everest pursuant
                to the
                Lease Agreement; and

            

      	 	 	 

      	 	(f)	
              tender
                cash payment of $32,000 at 10% per year via monthly installments
                of
                $1,464.43 commencing on October 1, 2006 with no prepayment
                penalty.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    IN
      WITNESS WHEREOF, the Parties hereto have executed this Modification to the
      Agreement on the date set forth below.

     

    
      	
              Dated:
                June 21, 2006

            	
              U.S.
                GLOBAL NANOSPACE, INC. 

              (f/k/a
                U.S. GLOBAL AEROSPACE, INC.)

            
	 	 	 	 
	 	By:	
              
                /s/
                  Carl Gruenler

              

            	 
	 	Its:	
              Chief
                Executive Officer

            	 
	 	 	 	 
	
              Dated:
                June 21, 2006

            	
              EVEREST
                INTERNATIONAL, INC., 

              f/k/a/
                WEST HARRIS PROPERTY, INC.

            	 
	 	 	 	 
	 	By:	
              /s/
                Patrick Sullins

            	 
	 	
              Its:

            	President	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGMENT

     

     

    
      	STATE OF __________________	§	 
	 	§	 
	COUNTY OF ________________	§	 

    

     

     

    BEFORE
      ME, the
      undersigned notary public, on this day personally appeared
      _____________________, who, being duly sworn on his oath, deposed and declared
      himself to be in his capacity as representative of U.S. Global Nanospace, Inc.
      (f/k/a U.S. Global Aerospace, Inc.), a Delaware corporation, and acknolwedged
      that he is duly authorized to enter into, sign and execute the foregoing
      instrument on behalf of U.S. Global Nanospace, Inc., on this ______ day of
      ______________, 2006.

     

    

    
      	 	 	____________________________________
	 	 	 
	 	 	Notary Public in and for the
	 	 	 
	 	 	State of _____________
	 	 	 
	 	 	My Commission
              Expires:

    

     

    
      
         

        
          	STATE OF Texas	§	 
	 	§	 
	
                  COUNTY OF Tarrant

                	§	 

        

         

      

       

    

    BEFORE
      ME, the
      undersigned notary public, on this day personally appeared Patrick Sullins,
      who,
      being duly sworn on his oath, deposed and declared himself to be in his capacity
      as representative of Everest International, Inc., a Texas corporation, and
      acknolwedged that he is duly authorized to enter into, sign and execute the
      foregoing instrument on behalf of Everest International, Inc., on this 21st
      day of June, 2006.

     

     

    
      
        	 	 	Sandra L. Nash
	 	 	 
	 	 	Notary Public in and for the
	 	 	 
	 	 	State of Texas
	 	 	 
	 	 	My Commission
                Expires:Exhibit
      10.3

    PURCHASE
      AGREEMENT

    

    This
      PURCHASE
      AGREEMENT
      (hereinafter the “Agreement”) is made and entered into as of this _____ day of
      June 2006, by and between US Global Nanospace, Inc. (the “Purchaser”), and USDR,
      Inc. (the “Seller”), with reference to the following facts:

    

    RECITALS

    

    WHEREAS,
      the
      Seller and Purchaser are both party to a settlement agreement entered into
      with
      Everest International, Inc. to resolve a
      Complaint in Tarrant County District Court, State of Texas, entitled
Everest
      International, Inc. f/k/a/ West Harris Property, Inc. v. U.S. Global Nanospace,
      Inc., U.S. Global Aerospace, Inc., and Julie Seaman,
      Cause
      No. 141-215474-05 (the "Action") arising out of the purported breach of an
      agreement to lease property at 1016 Harris Road, Arlington, TX.

    

    WHEREAS,
      in
      connection with the settlement agreement described above, the Seller shall
      sell
      to the Purchaser, and the Purchaser shall purchase from the Seller, certain
      personal property listed in Section 1 below which is presently located at
1016
      Harris Road, Arlington, TX.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and promises contained herein, and for
      other valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged and confessed, the parties to this Agreement (hereinafter
      collectively “parties” and individually “party”) agree as follows:

    

    AGREEMENT

    

    1. SALE
      AND PURCHASE OF PERSONAL PROPERTY.

    

    On
      the
      terms and conditions hereinafter set forth, the Seller shall sell and the
      Purchaser shall purchase all of the Seller’s right, title and interest in and to
      all of the assets used in the Business (the “Purchased Property”) along with all
      documents, titles, keys and combinations necessary to transfer ownership, which
      are presently located at 1016 Harris Road, Arlington, TX and are set forth
      as
      follows

    

    
      	 	
              (a)

            	
              All
                equipment related to metal fabrication, such as drill presses, welders,
                table saw, and tools;

            

    

    
      	 	
              (b)

            	
              All
                pallet racks and shelving;

            

    

    
      	 	
              (c)

            	
              All
                office furniture and front office filing cabinets (not including
                computers, printers, copiers, or phone systems);
                

            

    

    
      	 	
              (d)

            	
              One
                Yale Forklift, model
                GIC505DENUAE083;

            

    

    
      	 	
              (e)

            	
              One
                floor pallet jack;

            

    

    
      	 	
              (f)

            	
              One
                “Movin Cool” Classic Plus 14, located in the computer room of the
                Property;

            

    

    
      	 	
              (g)

            	
              One
                HP DesignJet 450C; and

            

      	 	(h)	One single axle utility trailer (with no certificate
              of
              origin, title, or tags).

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. PURCHASE
      PRICE AND PAYMENT TERMS.

    

    As
      payment in full for the Purchased Assets, the Purchaser agrees to issue 731,707
      shares of restricted common stock of the Purchaser to Seller of its nominee
      (the
“Shares”) within 10 business days from date of Agreement to Seller.

    

    3. SELLER’S
      REPRESENTATION’S AND WARRANTIES.

    

    The
      Seller hereby represents, warrants and covenants to the Purchaser
      that:

    

    (a)Seller
      has all requisite power and authority (corporate or otherwise) to execute,
      deliver and perform this Agreement and the transactions contemplated
      thereby;

     

    (b)Seller
      holds unencumbered title to all Purchased Property to be conveyed to Purchaser
      under this Agreement; 

     

    (c)This
      Agreement, when executed and
      delivered on behalf of the Seller, shall constitute valid and binding
      obligations of the Seller, enforceable against it in accordance with its
      terms.

     

    (d) Seller
      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.

    

    (e) Seller
      understands and acknowledges that the Shares are deemed
      to
      be “restricted” under the Securities Act, and may be re-sold only pursuant to
      exemptions provided by the Securities Act or pursuant to an effective
      registration statement. Seller understands and acknowledges that Purchaser
      is
      required to place a legend on the certificate stating that the Common Stock
      not
      been registered under the Securities Act.

    

    4. INDEMNIFICATION
      BY SELLER.

    

    The
      Seller hereby agrees to indemnify, defend and hold harmless the Purchaser from
      and against any and all loss, liability, damage or deficiency (including
      interest, penalties, and reasonable attorney’s fees) arising out of or due to
      any subsequent claims of ownership relating to the Purchased
      Property.

    

    5. MISCELLANEOUS.

    

    (a) It
      is
      acknowledged by each party that such party either had separate and independent
      advice of counsel or the opportunity to avail itself of same. This Agreement
      was
      prepared by each party in conjunction with counseling from such party’s
      respective attorney or the opportunity to obtain such counseling. In light
      of
      these facts it is acknowledged that no party shall be construed to be solely
      responsible for the drafting hereof, and therefore any ambiguity shall not
      be
      construed against any party as the alleged draftsman of this
      Agreement.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b) Each
      party agrees, without further consideration, to cooperate and diligently perform
      any further acts, deeds and things and to execute and deliver any documents
      that
      may be reasonably necessary to consummate, evidence, confirm and/or carry out
      the intent and provisions of this Agreement, all without undue delay or expense.
      

    

    (c) The
      parties expressly acknowledge and agree that this Agreement : (i) is the final,
      complete and exclusive statement of the parties’ agreement with respect to the
      subject matter hereof, (ii) supersedes any prior or contemporaneous promises,
      assurances, guarantees, representations, understandings, conduct, proposals,
      conditions, commitments, acts, course of dealing, warranties, interpretations
      or
      terms of any kind, oral or written (collectively “Prior Agreements”), and that
      any such Prior Agreements are of no force or effect except as expressly set
      forth herein, and (iii) may not be varied, supplemented or contradicted by
      evidence of such Prior Agreements or by evidence of subsequent oral agreements.
      Any agreement hereafter made shall be ineffective to modify, supplement or
      discharge the terms of this Agreement, in whole or in part, unless such
      agreement is in writing and signed by the party against whom enforcement of
      the
      modification, supplement or is sought.

    

    (d) The
      Seller and the Purchaser may assign such party’s rights under this Agreement, in
      whole or in part, with the prior written consent of the other, which consent
      shall not be unreasonably withheld. All of the representations, warranties,
      covenants, conditions and provisions of this Agreement shall be binding upon
      and
      shall inure to the benefit of each party and such party’s respective heirs,
      executors, administrators, legal representatives, successors and/or assigns,
      whichever the case may be.

    

    (e) The
      headings used in this Agreement are for convenience and reference purposes
      only,
      and shall not be used in construing or interpreting the scope or intent of
      this
      Agreement or any provision hereof. References to this Agreement shall include
      all amendments or renewals thereof. As used in this Agreement, each gender
      shall
      be deemed to include each other gender, including neutral genders or genders
      appropriate for entities, if applicable, and the singular shall be deemed to
      include the plural, and vice versa, as the context requires.

    

    (f) All
      notices, demands, requests, consents, approvals or other communications (for
      the
      purposes of this Paragraph hereinafter collectively called “Notices”), required
      or permitted to be given hereunder, or which are given with respect to this
      Agreement, shall be in writing, and shall be given by personal delivery,
      telegraph or by express mail, Federal Express, DHL or other similar form of
      internationally recognized airborne/overnight delivery service (which forms
      of
      Notice shall be deemed to have been given upon delivery), or by telex or
      facsimile transmission (which forms of Notice shall be deemed delivered upon
      confirmed transmission). Notices shall be addressed to the appropriate party(s)
      as set forth on the signature page of this Agreement, or to such other address
      as the receiving party shall have specified most recently by like Notice, with
      a
      copy to the other parties hereto.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (g) If
      any
      part or provision of this Agreement shall be determined to be invalid, illegal
      or unenforceable under the laws of the State of Texas, then the remaining parts
      of this Agreement which can be separated from the invalid, illegal or
      unenforceable provisions shall continue in full force and effect, and the
      invalid, illegal or unenforceable provisions shall be construed as if they
      had
      never been incorporated into this Agreement.

    

    (h) This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, and all of which together shall constitute but one and the same
      instrument.

    

    (i) Failure
      to insist on compliance with any of the terms, covenants, or conditions of
      this
      Agreement shall not be deemed a waiver of such terms, covenants, or conditions,
      nor shall any waiver or relinquishment of any right or power hereunder at any
      time be deemed a waiver or relinquishment of such rights or powers.

    

    (j) Each
      party to this Agreement agrees, without further consideration, to cooperate
      and
      diligently perform any further acts, and execute and deliver any documents
      that
      may be reasonably necessary to carry out the intent and provisions of this
      Agreement. 

     

    WHEREFORE,
      the
      parties hereto have executed this Agreement as of the date first set forth
      above.

    

    
      	 	 	“Seller” - USDR,
              Inc.
	 	 	 
	 	 	/s/
              Julie Seaman
	 	 	By: Julie Seaman
	 	 	Secretary
	 	 	Title
	 	 	 
	 	 	 
	 	 	“Purchaser” - US Global Nanospace,
              Inc/
	 	 	 
	 	 	/s/
              Carl Gruenler
	 	 	By: Carl Gruenler
	 	 	Chief
              Executive Officer
	 	 	
              Title

            

    

     

    

    
      
        
        

      

      
        4

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