Document:

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                                                                  Exhibit 10.5

                                    FORM OF

                             AVIATION GROUP, INC.

                               WARRANT AGREEMENT

                         Dated as of February 23, 2000

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                               WARRANT AGREEMENT
                               -----------------

     This WARRANT AGREEMENT (the "Agreement") is dated as of February 23, 2000
between AVIATION GROUP, INC., a Texas corporation (the "Company"), and
__________, a __________ resident, his heirs, personal representatives, and
assigns (collectively, "__________").

                             W I T N E S S E T H:
                             - - - - - - - - - -

     WHEREAS, the Company intends to enter into letters of intent to acquire
Global Leisure Travel, Inc., a Washington corporation, and travelbyus.com Ltd.,
an Ontario corporation (the "Acquisitions");

     WHEREAS, the Board of Directors of the Company desires to incentivize
__________ to use his reasonable best efforts to cause the Company to consummate
the Acquisitions;

     WHEREAS, pursuant to rules of the Nasdaq Stock Market, Inc., this Agreement
requires the approval of the Company's shareholders because of the listing of
the Company's common stock, par value $0.01 per share (the "Common Stock"), on
the Nasdaq SmallCap Market;

     NOW, THEREFORE, in consideration of the premises, the agreements set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

     1.   Grant. Subject to the terms and conditions hereof, __________ is
          -----
hereby granted the right to purchase, at any time prior to 5:00 p.m., Dallas,
Texas time on February 23, 2005, 50,000 shares of Common Stock (the "Shares").
One share of Common Stock is hereinafter referred to as a "Warranty Security"
and more than one collectively referred to as the "Warrant Securities". The
exercise price of each Warrant shall equal (subject to adjustment as provided in
Section 9) $1.50 per Warrant Security subject to the terms and conditions of
this Agreement.

     2.   Conditions. Notwithstanding any other provisions hereof, none of the
          ----------
Warrants may be exercised by __________ unless and until (i) the Acquisitions
are completed and (ii) the shareholders of the Company approve this Agreement.

     3.   Warrant Certificates.  The warrant certificates (the "Warrant
          --------------------
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
                         ---------
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.

     4.   Exercise of Warrant.
          -------------------

          4.1   Method of Exercise. The Warrants initially are exercisable at an
                ------------------
aggregate initial exercise price (subject to adjustment as provided in Section 9
hereof) per Warrant Security set forth in Section 7 hereof payable by certified
or official bank check, subject to adjustment as provided in Section 9 hereof.
Upon surrender of a Warrant Certificate with the annexed Form of

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Election to Purchase duly executed, together with payment of the Exercise Price
(as hereinafter defined) for the Warrant Securities purchased at the Company's
principal offices (presently located at 700 North Pearl, Suite 2170, Dallas,
Texas 75201) the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased. The purchase rights represented by each
Warrant Certificate are exercisable at the option of the Holders thereof, in
whole or part (but not as to fractional shares of the Common Stock). In the case
of the purchase of less than all Warrant Securities purchasable under any
Warrant Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Warrant Securities purchasable thereunder.

          4.2   Exercise by Surrender of Warrant.  In addition to the method of
                --------------------------------
payment set forth in Section 3.1 and in lieu of any cash payment required
thereunder, the Holder(s) of the Warrants shall have the right at any time and
from time to time to exercise the Warrants in full or in part by surrendering
the Warrant Certificate in the manner specified in Section 4.1. The number of
shares of Common Stock to be issued pursuant to this Section 4.2 shall be equal
to the difference between (a) the number of shares of Common Stock in respect of
which the Warrants are exercised and (b) a fraction, the numerator of which
shall be the number of shares of Common Stock in respect of which the Warrants
are exercised multiplied by the Exercise Price (as hereinafter defined) and the
denominator of which shall be the Market Price (as defined in Section 4.3).

          4.3   Definition of Market Price.  As used herein, the phrase "Market
                --------------------------
Price" at any date shall be deemed to be the last reported sale price, or, in
case no such reported sale takes place on such day, the average of the last
reported sale prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading or by The Nasdaq Stock Market's National
Market or SmallCap Market ("Nasdaq"), or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted by Nasdaq, the
average closing bid price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no
longer reporting such information, or if the Common Stock is not quoted by the
NASD or such similar organization, the fair market value of a share of Common
Stock as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.  Notwithstanding the
foregoing, for purposes of Section 8, the Market Price of a share of Common
Stock shall be determined by reference to the relevant information set forth
above during the thirty (30) trading days immediately preceding the date of the
event requiring the determination of the Market Price (except that, in the event
of a public offering of shares of Common Stock, the Market Price of a share of
Common Stock shall be determined by reference to the trading day immediately
preceding the effective date of the public offering and not such thirty (30)
trading day period).

     5.   Issuance of Certificates.  Upon the exercise of the Warrants, the
          ------------------------
issuance of certificates for shares of Common Stock and/or other securities,
properties or rights underlying such Warrants shall be made forthwith (and in
any event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance thereof, and such certificates shall (subject to the provisions
of Sections 6 and 8 hereof) be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other

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than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

     The Warrant Certificates and the certificates representing the Shares
(and/or other securities, property or rights issuable upon the exercise of the
Warrants) shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant Secretary of the Company.  Warrant Certificates
shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.

     6.   Restriction On Transfer of Warrants.  The Holder of a Warrant
          -----------------------------------
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof.  This Agreement is binding upon any Holder(s) of a Warrant Certificate
and their respective heirs, successors, and permitted assigns.  The Holder may
assign interests granted by this Agreement, subject to the any other limitations
in the Agreement, provided that the transferee agrees to be bound by the terms
of this Agreement as if such transferee were a Holder and, provided further,
that the assignment is made pursuant to an effective registration statement
under the Securities Act or a valid exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act").  If requested by the
Company, the Holder shall have furnished to the Company an opinion of counsel
reasonably satisfactory to the Company to such effect.

     7.   Exercise Price.
          --------------

          7.1   Initial and Adjusted Exercise Price.  Except as otherwise
                -----------------------------------
provided in Section 8 hereof, the initial exercise price of each Warrant shall
be $1.50 per Warrant Security.  The adjusted exercise price shall be the price
which shall result from time to time from any and all adjustments of the initial
exercise price in accordance with the provisions of Section 8 hereof.

          7.2   Exercise Price.  The term "Exercise Price" herein shall mean the
                --------------
initial exercise price or the adjusted exercise price, depending upon the
context.

     8.   Registration Rights.
          -------------------

          8.1   Piggyback Registration.
                ----------------------

                (a)   If, at any time prior to the seventh anniversary of the
          date of this Agreement, the Company proposes to register any of its
          securities under the Securities Act of 1933, as amended (the "Act"),
          either for its own account or the account of any other security holder
          or holders of the Company possessing registration rights ("Other
          Stockholders") (other than pursuant to Form S-4, Form S-8 or
          comparable registration statement), it shall give written notice, at
          least thirty (30) days prior to the filing of each such registration
          statement, to any Holder(s) of Registrable Securities (as hereinafter
          defined), of its intention to do so. If such

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          Holder(s) notify the Company within twenty-one (21) days after the
          receipt of any such notice of its or their desire to include any
          Registrable Securities in such proposed registration statement, the
          Company shall afford such Holder(s) of such Registrable Securities the
          opportunity to have any such Registrable Securities registered for
          resale by the Holder(s) under such registration statement. The term
          "Registrable Securities" means (i) all shares of Common Stock owned by
          a Holder as a result of the exercise of a Warrant, and (ii) all shares
          of Common Stock which a Holder has an option to purchase under a
          Warrant, until, in the case of any such security described by (i) or
          (ii), (a) such security is disposed of in accordance with an effective
          registration statement under the Securities Act, (b) such security is
          saleable by the Holder pursuant to Rule 144(k), (c) such security is
          saleable by the Holder pursuant to Rule 144 without regard to any
          volume limitations, or (d) such security is distributed to the public
          pursuant to Rule 144.

                (b)   If the registration of which the Company gives notice is
          for a registered public offering involving an underwriting, the
          Company shall so advise any Holder(s) as part of the written notice
          given pursuant to Section 8.1(a) hereof. The right of any such
          Holder(s) to registration pursuant to this Section 8.1 shall not be
          conditioned upon their participation in such underwriting and the
          inclusion of their Registrable Securities in the underwriting to the
          extent hereinafter provided.

                (c)   Notwithstanding the provisions of this Section 8.1, the
          Company shall have the right at any time after it shall have given
          written notice pursuant to Section 8.1(a) hereof (irrespective of
          whether a written request for inclusion of any such securities shall
          have been made) to elect not to file any such proposed registration
          statement, or to withdraw the same after the filing but prior to the
          effective date thereof.

          8.2   Covenants of the Company with Respect to Registration.  In
                -----------------------------------------------------
connection with any registration under Section 8.1 hereof, the Company covenants
and agrees as follows:

                (a)   The Company shall use its best efforts to have any
          registration statements declared effective at the earliest practicable
          time and shall furnish each Holder desiring to sell Registrable
          Securities such number of prospectuses as shall reasonably be
          requested.

                (b)   The Company shall pay all costs, expenses and fees
          (excluding fees and expenses of Holder(s)' counsel and any
          underwriting or selling commissions), in connection with all
          registration statements filed pursuant to Section 8.1 hereof
          including, without limitation, the Company's legal and accounting
          fees, printing expenses, blue sky fees and expenses. If the Company
          shall fail to comply with the provisions of Section 8.2(a), the
          Company shall, in addition to any other equitable or other relief
          available to the Holder(s), extend the exercise period of the Warrants
          by such number of days as shall equal the delay caused by the
          Company's failure.

                (c)   The Company will take all necessary action which may be
          required in qualifying or registering the Registrable Securities
          included in a registration

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          statement for offering and sale under the securities or blue sky laws
          of such states as reasonably are requested by the Holder(s); provided
          that, the Company shall not be obligated to execute or file any
          general consent to service of process or to qualify as a foreign
          corporation to do business under the laws of any such jurisdiction.

                (d)   The Company shall indemnify the Holder(s) of the
          Registrable Securities to be sold pursuant to any registration
          statement and each person, if any, who controls such Holders within
          the meaning of Section 16 of the Act or Section 21(a) of the
          Securities Exchange Act of 1934, as amended ("Exchange Act"), against
          all loss, claim, damage, expense or liability (including all expenses
          reasonably incurred in investigating, preparing or defending against
          any claim whatsoever) to which any of them may become subject under
          the Act, the Exchange Act or otherwise, arising from such registration
          statement except for matters for which the Company is indemnified
          under subsection 8.2(e) hereof.

                (e)   The Holder(s) of the Registrable Securities to be sold
          pursuant to a registration statement, and their successors and
          assigns, shall severally, and not jointly, indemnify the Company, its
          officers and directors and each person, if any, who controls the
          Company within the meaning of Section 16 of the Act or Section 21(a)
          of the Exchange Act, against all loss, claim, damage or expense or
          liability (including all expenses reasonably incurred in
          investigating, preparing or defending against any claim whatsoever) to
          which they may become subject under the Act, the Exchange Act or
          otherwise, arising from information furnished by or on behalf of such
          Holders, or their successors or assigns, for specific inclusion in
          such registration statement.

                (f)   For a period of ninety (90) days after the effectiveness
          of any registration statement filed pursuant to Section 8.1 hereof,
          the Company shall not permit any other registration statement (other
          than (1) a registration statement relating to the securities for which
          the Company has made available to the Holder(s) of the Registrable
          Securities piggyback registration rights hereunder and (2) a
          registration statement filed on Forms S-4 or S-8 or a shelf
          registration on Form S-3) to be or remain effective during the
          effectiveness of a registration statement or a shelf registration on
          Form S-3 filed pursuant to Section 8.1 hereof, without the prior
          written consent of the Holders of the Registrable Securities
          representing a majority of such securities.

                (g)   The Company shall furnish to each Holder participating in
          the offering and to each underwriter, if any, a signed counterpart,
          addressed to such Holder or underwriter, of (i) an opinion of counsel
          to the Company, dated the effective date of such registration
          statement (and, if such registration includes an underwritten public
          offering, an opinion dated the date of the closing under the
          underwriting agreement), and (ii) a "cold comfort" letter dated the
          effective date of such registration statement (and, if such
          registration includes an underwritten public offering, a letter dated
          the date of the closing under the underwriting agreement) signed by
          the independent public accountants who have issued a report on the
          Company's financial statements included in such registration
          statement, in each case

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          covering substantially the same matters with respect to such
          registration statement (and the prospectus included therein) and, in
          the case of such accountants' letter, with respect to events
          subsequent to the date of such financial statements, as are
          customarily covered in opinions of issuer's counsel and in
          accountants' letters delivered to underwriters in underwritten public
          offerings of securities.

                (h)   The Company shall as soon as practicable after the
          effective date of any registration statement filed pursuant to Section
          8.1 hereof, and in any event within fifteen (15) months thereafter,
          make "generally available to its security holders" (within the meaning
          of Rule 158 under the Act) an earnings statement (which need not be
          audited) complying with Section 11(a) of the act and covering a period
          of at least twelve (12) consecutive months beginning after the
          effective date of the registration statement.

                (i)   The Company shall deliver promptly to each Holder
          participating in the offering requesting the correspondence and
          memoranda described below and to the managing underwriters, copies of
          all written correspondence between the Commission and the Company, its
          counsel or auditors and all memoranda relating to discussions with the
          Commission or its staff with respect to the registration statement and
          permit each Holder and underwriters to do such investigation, upon
          reasonable advance notice, with respect to information contained in or
          omitted from the registration statement as it deems reasonably
          necessary to comply with applicable securities laws or rules of the
          NASD.  Such investigation shall include access to books, records and
          properties and opportunities to discuss the business of the Company
          with its officers and independent auditors, all to such reasonable
          extent and at such reasonable times and as often as any such Holder or
          underwriter shall reasonably request.

                (j)   Nothing contained in this Agreement shall be construed as
          requiring the Holder(s) to exercise their Warrants prior to the
          initial filing of any registration statement or the effectiveness
          thereof.

          8.3   Restrictive Legends.  The Warrant Certificates, any certificates
                -------------------
representing the Shares underlying the Warrants and any of the other securities
issuable upon exercise of the Warrants shall bear the following restrictive
legend:

          The securities represented by this certificate have not been
          registered under the Securities Act of 1933, as amended ("Act"), and
          may not be offered or sold except pursuant to (i) an effective
          registration statement under the Act, (ii) to the extent applicable,
          Rule 144 under the Act (or any similar rule under such Act relating to
          the disposition of securities), or (iii) an opinion of counsel, if
          such opinion shall be reasonably satisfactory to counsel to the
          issuer, that an exemption from registration under such Act is
          available.

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     9.   Adjustments to Exercise Price and Number of Securities.
          ------------------------------------------------------

          9.1   Computation of Adjusted Exercise Price.  Except as hereinafter
                --------------------------------------
provided, in the event the Company shall at any time after the date hereof issue
or sell any shares of Common Stock including shares held in the Company's
treasury (other than (i) the issuances or sales referred to in Section 9.7
hereof, (ii) shares of Common Stock issued upon the exercise of any options,
rights or warrants to subscribe for shares of Common Stock, or (iii) shares of
Common Stock issued upon the direct or indirect conversion or exchange of
securities for shares of Common Stock), for a consideration per share less than
the Market Price in effect immediately prior to the issuance or sale of such
shares, or without consideration, then forthwith upon such issuance or sale, the
Exercise Price shall (until another such issuance or sale) be reduced to the
price (calculated to the nearest full cent) equal to the quotient derived by
dividing (i) an amount equal to the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to the issuance or sale of such
shares, multiplied by the Exercise Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 9.3
hereof.

     For the purposes of this Section 9 the term Exercise Price shall mean the
Exercise Price per share of Common Stock set forth in Section 7 hereof, as
adjusted from time to time pursuant to the provisions of this Section 9.

     For the purposes of any computation to be made in accordance with this
Section 9.1, the following provisions shall be applicable:

                (a)   In case of the issuance or sale of shares of Common Stock
          for a consideration part or all of which shall be cash, the amount of
          the cash consideration therefor shall be deemed to be the amount of
          cash received by the Company for such shares (or, if shares of Common
          Stock are offered by the Company for subscription, the subscription
          price, or, if either of such securities shall be sold to underwriters
          or dealers for public offering without a subscription offering, the
          initial public offering price) before deducting therefrom any
          compensation paid or discount allowed in the sale, underwriting or
          purchase thereof by underwriters or dealers or others performing
          similar services, or any expenses incurred in connection therewith.

                (b)   In case of the issuance or sale (other than as a dividend
          or other distribution on any stock of the Company) of shares of Common
          Stock for a consideration part or all of which shall be other than
          cash, the amount of the consideration therefor other than cash shall
          be deemed to be the value of such consideration as determined in good
          faith by the Board of Directors of the Company and shall include any
          amounts payable to security holders or any affiliates thereof
          including, without limitation, pursuant to any employment agreement,
          royalty, consulting agreement, covenant not to compete, earnout or
          contingent payment right or similar arrangement, agreement or
          understanding, whether oral or written; all such

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          amounts being valued for the purposes hereof at the aggregate amount
          payable thereunder, whether such payments are absolute or contingent,
          and irrespective of the period or uncertainty of payment, the rate of
          interest, if any, or the contingent nature thereof; provided, however,
          that if any Holder(s) does not agree with such evaluation, a mutually
          acceptable independent appraiser shall make such evaluation, the cost
          of which shall be borne by the Company.

                (c)   Shares of Common Stock issuable by way of dividend or
          other distribution on any stock of the Company shall be deemed to have
          been issued immediately after the opening of business on the day
          following the record date for the determination of stockholders
          entitled to receive such dividend or other distribution and shall be
          deemed to have been issued without consideration.

                (d)   The reclassification of securities of the Company other
          than shares of Common Stock into securities including shares of Common
          Stock shall be deemed to involve the issuance of such shares of Common
          Stock for a consideration other than cash immediately prior to the
          close of business on the date fixed for the determination of security
          holders entitled to receive such shares, and the value of the
          consideration allocable to such shares of Common Stock shall be
          determined as provided in subsection (ii) of this Section 9.1.

                (e)   The number of shares of Common Stock at any one time
          outstanding shall include the aggregate number of shares issued or
          issuable (subject to readjustment upon the actual issuance thereof)
          upon the exercise of options, rights, warrants and upon the conversion
          or exchange of convertible or exchangeable securities.

          9.2   Options, Rights, Warrants and Convertible and Exchangeable
                ----------------------------------------------------------
Securities.  In case the Company shall at any time after the date hereof issue
----------
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock, for
a consideration per share less than the Market Price in effect immediately prior
to the issuance of such options, rights or warrants, or such convertible or
exchangeable securities, or without consideration, the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants, or such
convertible or exchangeable securities, as the case may be, shall be reduced to
a price determined by making a computation in accordance with the provisions of
Section 9.1 hereof, provided that:

                (a)   The aggregate maximum number of shares of Common Stock, as
          the case may be, issuable under such options, rights or warrants shall
          be deemed to be issued and outstanding at the time such options,
          rights or warrants were issued, and for a consideration equal to the
          minimum purchase price per share provided for in such options, rights
          or warrants at the time of issuance, plus the consideration
          (determined in the same manner as consideration received on the issue
          or sale of shares in accordance with the terms of the Warrants), if
          any, received by the Company for such options, rights or warrants.

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                (b)   The aggregate maximum number of shares of Common Stock
          issuable upon conversion or exchange of any convertible or
          exchangeable securities shall be deemed to be issued and outstanding
          at the time of issuance of such securities, and for a consideration
          equal to the consideration (determined in the same manner as
          consideration received on the issue or sale of shares of Common Stock
          in accordance with the terms of the Warrants) received by the Company
          for such securities, plus the minimum consideration, if any,
          receivable by the Company upon the conversion or exchange thereof.

                (c)   If any change shall occur in the price per share provided
          for in any of the options, rights or warrants referred to in
          subsection (a) of this Section 9.2, or in the price per share at which
          the securities referred to in subsection (b) of this Section 8.2 are
          convertible or exchangeable, such options, rights or warrants or
          conversion or exchange rights, as the case may be, shall be deemed to
          have expired or terminated on the date when such price change became
          effective in respect of shares not theretofore issued pursuant to the
          exercise or conversion or exchange thereof, and the Company shall be
          deemed to have issued upon such date new options, rights or warrants
          or convertible or exchangeable securities at the new price in respect
          of the number of shares issuable upon the exercise of such options,
          rights or warrants or the conversion or exchange of such convertible
          or exchangeable securities.

          9.3   Subdivision and Combination.  In case the Company shall at any
                ---------------------------
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.

          9.4   Adjustment in Number of Securities.  Upon each adjustment of the
                ----------------------------------
Exercise Price pursuant to the provisions of this Section 9, the number of
Warrant Securities issuable upon the exercise at the adjusted exercise price of
each Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Securities issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

          9.5   Definition of Common Stock.  For the purpose of this Agreement,
                --------------------------
the term "Common Stock" shall mean (i) the class of stock designated as Common
Stock in the Articles of Incorporation of the Company as amended as of the date
hereof, or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.  In
the event that the Company shall after the date hereof issue securities with
greater or superior voting rights than the shares of Common Stock outstanding as
of the date hereof, the Holder, at its option, may receive upon exercise of any
Warrant either shares of Common Stock or a like number of such securities with
greater or superior voting rights.

          9.6   Merger or Consolidation.  In case of any consolidation of the
                -----------------------
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of each
Warrant then

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outstanding or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by a holder of the number of shares of Common
Stock of the Company for which such Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 9. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.

          9.7   No Adjustment of Exercise Price in Certain Cases.  No adjustment
                ------------------------------------------------
of the Exercise Price shall be made:

                (a)   Upon the issuance or sale of the Warrants or the shares of
          Common Stock issuable upon the exercise of the Warrants; or

                (b)   If the amount of such adjustment shall be less than two
          cents ($.02) per Warrant Security, provided, however, that in such
          case any adjustment that would otherwise be required then to be made
          shall be carried forward and shall be made at the time of and together
          with the next subsequent adjustment which, together with any
          adjustment so carried forward, shall amount to at least two cents
          ($.02) per Warrant Security; or

                (c)   If the Exercise Price would be less than the par value per
          share of Common Stock.

          9.8   Dividends and Other Distributions. In the event that the Company
                ---------------------------------
shall at any time prior to the exercise of all Warrants declare a dividend
(other than a dividend consisting solely of shares of Common Stock) or otherwise
distribute to its stockholders any assets, property, rights, evidences of
indebtedness, securities (other than shares of Common Stock), whether issued by
the Company or by another, or any other thing of value, the Holders of the
unexercised Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities and property receivable upon the exercise
thereof, to receive, upon the exercise of such Warrants, the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution as if the Warrants had been exercised immediately prior to such
dividend or distribution. At the time of any such dividend or distribution, the
Company shall make appropriate reserves to ensure the timely performance of the
provisions of this Section 9.8.

          9.9   Statement on Warrant Certificate.  Irrespective of any
                --------------------------------
adjustments in the Exercise Price or the number or kind of shares purchasable
upon the exercise of the Warrants, the Warrant Certificate or certificates
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.

     10.  Exchange and Replacement of Warrant Certificates.  Each Warrant
          ------------------------------------------------
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing

                                       11
<PAGE>

in the aggregate the right to purchase the same number of Warrant Securities in
such denominations as shall be designed by the Holder thereof at the time of
such surrender.

     Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.

     11.  Elimination of Fractional Interests.  The Company shall not be
          -----------------------------------
required to issue fractional shares of Common Stock upon the exercise of
Warrants.  Warrants may only be exercised in such multiples as are required to
permit the issuance by the Company of one or more whole shares of Common Stock.
If one or more Warrants shall be presented for exercise in full at the same time
by the same Holder, the number of whole shares of Common Stock which shall be
issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of shares of Common Stock purchasable on exercise of the
Warrants so presented.  If any fraction of a share of Common Stock would, except
for the provisions provided herein, be issuable on the exercise of any Warrant
(or specified portion thereof), the Company shall pay an amount in cash equal to
such fraction multiplied by the then current Market Price of a share of Common
Stock, determined in accordance with Section 4.3 hereof.

     12.  Reservation and Listing of Securities.  The Company shall at all times
          -------------------------------------
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof.  The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price therefor, all shares
of Common Stock and other Securities issuable upon such exercise shall be duly
and validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any stockholder.

     13.  Notices to Warrant Holders.  Nothing contained in this Agreement shall
          --------------------------
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company.  If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:

          (a)   the Company shall take a record of the holders of its shares of
     Common Stock for the purpose of entitling them to receive a dividend or
     distribution payable other than in cash, or a cash dividend or distribution
     payable other than out of current or retained earnings, as indicated by the
     accounting treatment of such dividend or distribution on the books of the
     Company; or

          (b)   the Company shall offer to all the holders of its Common Stock
     any additional shares of capital stock of the Company or securities
     convertible into or exchangeable for shares of capital stock of the
     Company, or any option, right or warrant to subscribe therefor; or

                                       12
<PAGE>

          (c)   a dissolution, liquidation or winding up of the Company (other
     than in connection with a consolidation or merger) or a sale of all or
     substantially all of its property, assets and business as an entirety shall
     be proposed;

then, in any one or more of such events, the Company shall give written notice
of such event to the Holders at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer book, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.

     14.  Notices.  All notices, requests, consents and other communications
          -------
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:

          (a)   If to the registered Holder of the Warrants, to the address of
     such Holder as shown on the books of the Company; or

          (b)   If to the Company, to the address set forth in Section 4 hereof
     or to such other address as the Company may designate by notice to the
     Holders.

     15.  Supplements and Amendments.  The Company and __________ may from time
          --------------------------
to time supplement or amend this Agreement without the approval of any Holders
of the Warrant Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and __________ may deem
necessary or desirable and which the Company and __________ deem shall not
adversely affect the interests of the Holders of the Warrant Certificates.  If
__________ no longer owns any Warrants, then this Agreement may be amended by
the Company and the Holders of a majority of the then outstanding Warrants.

     16.  Successors.  All the covenants and provisions of this Agreement shall
          ----------
be binding upon and inure to the benefit of the Company, the Holders and their
respective successors and assigns hereunder.

     17.  Governing Law; Submission to Jurisdiction.  This Agreement and each
          -----------------------------------------
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Texas and for all purposes shall be construed in
accordance with the laws of such State without giving effect to the rules of
such State governing the conflicts of laws.

     The Company, __________ and any other registered Holders hereby agree that
any action, proceeding or claim against it arising out of, or relating in any
way to, this Agreement shall be brought and enforced in the courts of the State
of Texas or of the United States of America for the Northern District of Texas,
and irrevocably submits to such jurisdiction, which jurisdiction shall be

                                       13
<PAGE>

exclusive. The Company, __________ and any other registered Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum. Any such process or summons to be served upon any of the Company,
__________ and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof, by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 14 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the party so served in any
action, proceeding or claim. The Company, __________ and any other registered
Holders agree that the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all of its/their
reasonable legal costs and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.

     18.  Entire Agreement; Modification.  This Agreement contains the entire
          ------------------------------
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.

     19.  Severability.  If any provision of this Agreement shall be held to be
          ------------
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.

     20.  Captions.  The caption headings of the Sections of this Agreement are
          --------
for convenience of reference only and are not intended, nor shall they be
construed as, a part of this Agreement and shall be given no substantive effect.

     21.  Benefits of this Agreement.  Nothing in this Agreement shall be
          --------------------------
construed to give to any person or corporation other than the Company and
__________ and any other registered Holder(s) of the Warrant Certificates or
Warrants Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole benefit of the Company and
__________ and any other registered Holders of Warrant Certificates or Warrant
Securities.

     22.  Counterparts.  This Agreement may be executed in any number of
          ------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.

                                       14
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.

                             AVIATION GROUP, INC.

                              By:
                                 ------------------------------------------
                              Name:
                                   ----------------------------------------
                              Title:
                                    ---------------------------------------

                              ---------------------------------------------
                              Warrant Holder

                                       15
<PAGE>

                                   EXHIBIT A
                                   ---------

                         [FORM OF WARRANT CERTIFICATE]

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                           EXERCISABLE ON OR BEFORE
               5:00 P.M., DALLAS, TEXAS TIME, FEBRUARY 23, 2005

No. W-                                                      Warrants to Purchase
      --------                                            Shares of Common Stock
                                                 --------

                              WARRANT CERTIFICATE
                              -------------------

     This Warrant Certificate certifies that ______________________, or
registered assigns, is the registered holder of _______________ Warrants to
purchase, until 5:00 p.m. Dallas, Texas time on February 23, 2005 ("Expiration
Date"), up to _______________ fully-paid and non-assessable shares of common
stock, $.01 par value ("Common Stock") of AVIATION GROUP, INC., a Texas
corporation (the "Company"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $1.50 per share of
Common Stock upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the Warrant Agreement dated as of February
23, 2000 between the Company and __________ (the "Warrant Agreement").  Payment
of the Exercise Price shall be made by certified or official bank check payable
to the order of the Company or by surrender of this Warrant Certificate.

     No Warrant may be exercised after 5:00 p.m., Dallas, Texas time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.

     Notwithstanding any other provisions hereof, this Warrant may not be
exercised to purchase any shares of Common Stock unless and until (i) the
Acquisitions are completed and (ii) the shareholders of the Company approve this
Agreement.

                                       16
<PAGE>

     The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.

     The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted.  In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.

     Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.

     Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.

     The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.

     All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.

     Dated as of                         .
                 ------------------------

                                              AVIATION GROUP, INC.

                                              By:
                                                 -----------------------------
                                              Name:
                                                   ---------------------------
                                              Title:
                                                    --------------------------

[SEAL]

                                       17
<PAGE>

Attest:

------------------------------------
Name:
     -------------------------------
Title:
      ------------------------------

                                       18<PAGE>

                                                                  Exhibit 10.6

                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into by
and between Aviation Group, Inc., a Texas corporation (the "Company"), and
Richard L. Morgan, an individual ("Employee"), as of February 23, 2000 (the
"Effective Date").

                             W I T N E S S E T H:

     In consideration of the mutual covenants herein contained, the employment
of Employee upon the terms, conditions and covenants set forth herein and each
act performed pursuant hereto, the parties hereto agree as follows:

                                   Article I
                             EMPLOYMENT AND DUTIES
                             ---------------------

     1.1  Employment.  For the term of employment as below stated, the Company
          ----------
hereby employs Employee as its Executive Vice President to perform such duties
as the Chief Executive Officer of the Company shall from time to time prescribe.
Employee will be required to perform his duties in Dallas, Texas and not
required to move to another city.

     1.2  Employee's Resources.  Employee shall devote substantially all of his
          --------------------
time, energy and capabilities to the performance of such duties and shall not
devote any material portion of his time or abilities to the planning,
organization, promotion, direction, management or conduct of any other business
activity, whether or not such other business activity is pursued for the gain,
profit or pecuniary advantage of Employee, without having first obtained the
consent of the Company.  Employee further agrees that, without the prior consent
of the Company, Employee shall not during the term of this Agreement directly or
indirectly (i) invest in any business which is competitive with that of the
Company, (ii) attempt to influence customers or other business associates not to
do business with or not to continue to do business with the Company, or (iii)
take any other action inconsistent with the fiduciary responsibility of an
employee to his employer.

                                  Article II
                              TERM OF EMPLOYMENT
                              ------------------

     2.1  Term.  Subject to earlier termination as hereinafter provided, the
          ----
initial term of employment of Employee hereunder shall commence on the Effective
Date and shall end on the  first anniversary of the Effective Date.  As used
herein, the phrase "Term of Employment" shall mean said initial term of
employment as well as any renewal terms thereof.

     2.2  Termination.  This Agreement may be terminated at any time during the
          -----------
Term of Employment only by reason of and in accordance with the following:
<PAGE>

          (a)   Death.  If Employee dies during the term of this Agreement and
                -----
while in the employ of the Company, this Agreement shall automatically terminate
as of the date of Employee's death; and the Company shall have no further
obligation to Employee or his estate, except to pay to the estate of Employee
(i) any accrued, but unpaid, Salary (as hereinafter defined) and any vacation or
sick leave benefits which have accrued as of the date of death but were then
unpaid or unused, (ii) the Minimum Bonus (as hereinafter defined), and (iii) any
declared, accrued Bonus Compensation (as hereinafter defined), if any, in excess
of the Minimum Bonus.

          (b)   Disability. If, during the term of this Agreement, Employee
                ----------
shall be prevented from performing his duties hereunder by reason of becoming
totally disabled, then the Company, on thirty (30) days' prior notice to
Employee, may terminate this Agreement. For purposes of this Agreement, Employee
shall be deemed to have become totally disabled when (i) he receives "total
disability benefits" under the Company's disability plan (whether funded with
insurance or self-funded by the Company), or (ii) the Board, upon the written
report of a qualified physician (after complete examination of Employee)
designated by the Board, shall have determined that Employee has become
physically and/or mentally incapable of performing his duties under this
Agreement on a permanent basis. In the event of termination pursuant to this
Section, the Company shall be relieved of all of its obligations under this
Agreement, except to pay Employee any accrued, but unpaid Salary, any vacation
or sick leave benefits which have accrued as of the date on which such permanent
disability is determined, but then remain unpaid, the Minimum Bonus and any
declared Bonus Compensation in excess of the Minimum Bonus. The provisions of
the preceding sentence shall not affect Employee's rights to receive payments
under the Company's disability insurance plan, if any.

          (c)   Termination by the Company for Cause. Prior to the expiration
                ------------------------------------
of the term of this Agreement, the Company may discharge Employee for cause and
terminate this Agreement without any further liability hereunder to Employee or
his estate, except to pay any accrued, but unpaid, Salary, the Minimum Bonus,
any declared Bonus Compensation in excess of the Minimum Bonus, and any vacation
benefits due to him. For purposes of this Agreement, a "discharge for cause"
shall mean termination of Employee upon written notification to Employee
limited, however, to one or more of the following reasons:

                (i)     Fraud, misappropriation or embezzlement by Employee in
connection with the Company as determined by the affirmative vote of at least a
majority of the Board; or

                (ii)    Mismanagement, lack of performance, or neglect of
Employee's duties as determined solely by the Chief Executive Officer of
Aviation Group, Inc.; or

                (iii)   Willful and unauthorized disclosure of information
proprietary or confidential to the Company; or

                (iv)    Employee's breach of any material term or provision of
this Agreement, after notice to Employee of the particular details thereof and a
period of thirty (30) days thereafter within which to cure such breach, if any,
and the failure of Employee to cure such breach within such thirty (30) day
period.

                                       2
<PAGE>

          (d)   Termination by Employee with Notice. Employee may terminate this
                -----------------------------------
Agreement at any time upon thirty (30) days' notice to the Company, in which
event Employee shall be paid his then prevailing Salary prorated to the date of
termination, plus any accrued, but unused, vacation benefits.

          (e)   Severance.  Additional severance payments of Salary will be paid
                ---------
to Employee if employee is terminated under terms listed above in Section
2.2(c), subsection (ii).  Employee shall receive as additional severance pay an
amount equal to 90 days of regular Salary if employee is terminated for reasons
listed in Section 2.2(c), subsection (ii).  If employee is terminated for any
other reasons with cause (other than the reasons listed in Section 2.2(c),
subsection (ii)), then Employee will not be paid any additional severance
payments of Salary.

                                  Article III
                           COMPENSATION AND BENEFITS
                           -------------------------

     3.1  Salary and Bonus.  As compensation for the Employee's services to the
          ----------------
Company and other duties and responsibilities herein contemplated, Employee
shall receive from the Company a salary commencing on March 1, 2000, and payable
in equal monthly installments, equivalent to $125,000 per year.  Employee may
also be entitled to receive from time to time bonuses and additional
compensation ("Bonus Compensation") when, as, and if determined by the Board.
The Bonus Compensation shall at a minimum be $150,000 (the AMinimum Bonus@) and
such Minimum Bonus shall be payable in full upon the earlier of (i) January 2,
2001 or (ii) the sale or other disposition, in one or more transactions, of the
Company=s operating subsidiaries, General Electrodynamics Corporation, Aero
Design, Inc., Battery Shop L.L.C., Aviation Exteriors Louisiana, Inc., Aviation
Exteriors Portland, Inc. and Aviation Exteriors Greenville, Inc., or all or
substantially all of their assets, on terms as may be approved by the Board.  In
the event of the termination of this Agreement or Employee=s employment for any
reason by the Company, the Company shall pay the Minimum Bonus to Employee in
addition to any other sums that may be owing to Employee hereunder.

     3.2  Employment Benefits.  In addition to the Salary and Bonus Compensation
          -------------------
payable to Employee hereunder, Employee shall be entitled to the following
benefits upon satisfaction by Employee of the eligibility requirements therefor,
subject to the following limitations:

          (a)   Sick Leave Benefits and Disability Insurance.  Unless this
                --------------------------------------------
Agreement is terminated pursuant to the provisions of Section 2.2(b) hereof,
Employee shall be paid sick leave benefits at his then prevailing Salary rate
during his absence due to illness or other incapacity, reduced by the amount, if
any, of worker's compensation, social security entitlement or disability
benefits, if any, under the Company's group disability insurance plan.  The
Company, at its own expense, shall provide Employee with the maximum amount of
disability insurance benefits allowed for one in the position of Employee with
the Company under and consistent with any group disability insurance plan which
the Company, at its election, may adopt.  Notwithstanding anything herein to the
contrary,

                                       3
<PAGE>

Employee's sick leave days shall not exceed the number of sick leave days
provided to employees of similar tenure and position in the Company as provided
in the Company's policy manual, if any.

          (b)   Hospitalization, Accident, Major Medical and Dental Insurance.
                -------------------------------------------------------------
The Company shall provide Employee with group hospitalization, group accident,
major medical, and dental insurance in amounts of coverage comparable to the
coverage, if any, provided other employees in similar positions with the
Company.

          (c)   Vacations.  Employee shall be entitled to a reasonable paid
                ---------
vacation each year during the term of this Agreement as determined by the Board,
exclusive of holidays and weekends, which vacation shall be taken by Employee in
accordance with the business requirements of the Company at the time and its
personnel policies then in effect relative to this subject.

          (d)   Working Facilities.  The Company shall provide, at its expense,
                ------------------
adequate facilities, equipment, supplies and personnel (including professional,
clerical, support and other personnel) for Employee's use in performing his
duties and responsibilities under this Agreement.

          (e)   Other Employment Benefits.  As an employee of the Company,
                -------------------------
Employee shall participate in and receive such other fringe benefits as may be
in effect from time to time for employees of similar tenure and position in the
Company, whether or not specifically enumerated herein and whether or not
through any written plan or arrangement, upon satisfaction by Employee of the
eligibility requirements therefor.

     3.3  Reimbursement of Employee Expenses.  Employee is authorized to incur
          ----------------------------------
ordinary, necessary and reasonable expenses in connection with the performance
of his duties and responsibilities under this Agreement and for the promotion of
the business and activities of the Company during the term hereof, including,
without limitation, expenses for necessary travel and entertainment and other
items of expenses required in the normal and routine course of Employee's
employment hereunder.  The Company will reimburse Employee from time to time for
all such business expenses incurred pursuant to and in conformity with the
provisions of this Section provided that Employee presents to the Company
documentary evidence of such expenses necessary to satisfy the reporting
requirements of the Internal Revenue Code of 1986, as amended.

     3.4  Warrants.  In consideration of Employee=s execution of this Agreement,
          --------
the Company shall grant to Employee warrants to purchase up to 250,000 shares of
the Company=s Common Stock at $1.50 per share expiring on February 23, 2005, in
a form substantially similar to the warrants granted to Employee in the fall of
1999.  Upon any exercise of such warrants by Employee, Employee shall be
entitled to offset the Minimum Bonus payable to him hereunder against the
exercise price of such warrants.

                                  Article IV
                             RESTRICTIVE COVENANTS
                             ---------------------

                                       4
<PAGE>

     4.1  Trade Secrets, Propriety and Confidential Information.  Employee
          -----------------------------------------------------
recognizes and acknowledges that Employee will acquire during his employment
hereunder access to certain trade secrets and confidential and proprietary
information of the Company (including, but not limited to, financial data,
marketing and sales plans, customer and supplier lists, and technical and
commercial information relating to the Company's properties, customers and
suppliers). Employee acknowledges that the information he obtains through his
employment hereunder constitutes valuable, special, and unique property of the
Company and that the Company would suffer great loss and damage if he should
violate the covenants set forth in this Agreement. Employee acknowledges that
such covenants and conditions are reasonable and necessary for the protection of
the Company's business.

     4.2  Solicitation of Employees.  Employee agrees that during the Term of
          -------------------------
Employment and until one year after the termination or expiration of the Term of
Employment, he will not, directly or indirectly, or by act in concert with
others, employ or attempt to employ or solicit for employment to any business
which is competitive with the Company, any of the Company's employees, or seek
to influence any employees of the Company to leave their employment with the
Company.

     4.3  Nondisclosure of Trade Secrets, Propriety and Confidential
          ----------------------------------------------------------
Information.  Employee agrees that without the prior written approval of the
-----------
Company, Employee shall not during the Term of Employment or following the
cessation of the Term of Employment for any reason disclose any of the Company's
trade secrets or confidential or proprietary information to any person or firm,
company, association, or other entity (except for authorized personnel of the
Company) for any reason or purpose whatsoever; provided, however, that this
Section shall not apply to the extent that Employee shall be required to provide
information pursuant to a valid, lawful subpoena or court order so long as
Employee shall have made his best efforts in good faith to cause the court of
relevant jurisdiction, to the greatest extent possible, to limit the scope of
such subpoena or order and protect the confidentiality of the information so
disclosed.

     4.4  Noncompetition Agreement.  Employee covenants and agrees to refrain
          ------------------------
for one year after any termination or expiration of his employment with the
Company from engaging in, or being employed by or performing consulting services
for any company or firm engaged in, the business of providing painting and/or
paint stripping services for aircraft, manufacturing, repairing or selling
batteries or  weighing scales to the airline industry, purchasing, consolidating
and reselling travel packages on a retail or wholesale basis, selling online
travel services or products through the Internet, or any other business in which
the Company may be engaged at the time of such employment termination or
expiration.

     4.5  Solicitation of Business of Company.  Employee covenants and agrees
          -----------------------------------
that during the Term of Employment and until one year after the termination or
expiration of the Term of Employment, Employee will not attempt to influence
customers, suppliers, and other business associates not to do business with or
not to continue to do business with the Company or its affiliates.

     4.6  Survival of Covenants.  Sections 4.2, 4.3, 4.4 and 4.5 hereof shall
          ---------------------
survive any expiration or termination of this Agreement and shall continue to
bind the parties hereto in accordance with the terms hereof.  The covenants
contained in this Article IV shall be construed as

                                       5
<PAGE>

covenants or agreements independent of any other provision of this Agreement and
the allegation or existence of any claim or cause of action of Employee against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants
contained herein.

     4.7  Remedies.  In the event of breach or threatened breach by Employee of
          --------
any provision of this Article IV, the Company shall be entitled to relief by
temporary restraining order, temporary injunction, permanent injunction, or
otherwise in addition to other legal and equitable relief to which it may be
entitled, including any and all monetary damages which the Company may incur as
a result of said breach, violation or threatened breach or violation.  The
Company may pursue any remedy available to it concurrently or consecutively in
any order as to any breach, violation, or threatened breach or violation, and
the pursuit of one of such remedies at any time will not be deemed an election
of remedies or waiver of the right to pursue any other of such remedies as to
such breach, violation, or threatened breach or violation, or as to any other
breach, violation, or threatened breach or violation.

                                   Article V
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     5.1  Notices.  Whenever, in connection with this Agreement, any notice is
          -------
required to be given or any other act or event is to be done or occur on or by a
particular number of days, and the date thus particularized should be a
Saturday, Sunday, or bank holiday in the City of Dallas, Texas, such date shall
be postponed to the next day which shall not be a Saturday, Sunday, or bank
holiday in the City of Dallas, Texas.  In the event a notice or other document
is required to be given hereunder to the Company or Employee, such notice or
other document shall either be personally delivered or be mailed to the party
entitled to receive the same by certified mail, return receipt requested, at the
appropriate address set forth below or at such other address as such party shall
designate in a written notice given in accordance with this Section:

     Company:                                 Employee:

     Aviation Group, Inc.                     Richard L. Morgan
     700 North Pearl Street, Suite 2170       3832 Centenary Avenue
     Dallas, Texas 75201                      Dallas, Texas  75225

Notice shall be deemed given on the date of actual delivery, if delivered in
person, or, if mailed, then on the date noted on the return receipt.

     5.2  Binding Effect.  The rights and obligations of the parties shall inure
          --------------
to the benefit of and shall be binding upon their heirs, representatives,
successors and assigns as the case may be.

     5.3  Severability.  If any provision contained in this Agreement is
          ------------
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain

                                       6
<PAGE>

in full force and effect as if the provision which was determined to be void,
illegal, or unenforceable had not been contained herein.

     5.4  Waiver, Modification and Integration.  The waiver by any party hereto
          ------------------------------------
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party.  This instrument contains the
entire agreement of the parties concerning employment and supersedes all prior
and contemporaneous representations, understandings and agreements, either oral
or in writing, between the parties hereto with respect to the employment of
Employee by the Company and all such prior or contemporaneous representations,
understandings and agreements, both oral and written, are hereby terminated.
This Agreement may not be modified, altered or amended except by written
agreement of all the parties hereto.

     5.5  GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
          -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND ACTIONS HEREON SHALL BE
BROUGHT IN DALLAS COUNTY, TEXAS.

     5.6  Counterpart Execution.  This Agreement may be executed in two or more
          ---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.

     5.7  Captions.  The captions herein are inserted for convenience only and
          --------
shall not affect the construction of this Agreement.

     IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth above.

                              COMPANY:

                              AVIATION GROUP, INC., a Texas corporation

                              By: /s/  Lee B. Sanders
                                 --------------------------------------
                              Name: Lee B. Sanders
                              Title: Chairman

                              EMPLOYEE:

                              /s/  Richard L. Morgan
                              ----------------------
                              Richard L. Morgan

                                       7

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