Exhibit (a)(1)(B)
(Letterhead of Aviation Group)
September __, 2000
Dear Series B Preferred Shareholders:
On May 3, 2000, we, Aviation Group, Inc., entered into an arrangement
agreement with ▇▇▇▇▇▇▇▇▇▇.▇▇▇ ltd., an Ontario corporation, under which
▇▇▇▇▇▇▇▇▇▇.▇▇▇ will become a subsidiary of our Canadian subsidiary, Aviation
Group Canada Ltd. The arrangement, conducted in accordance with Canadian law,
will result in a business combination between us and ▇▇▇▇▇▇▇▇▇▇.▇▇▇. The
arrangement is one of the major steps of our plan to redirect our business
strategy from providing airline companies with airline-related services and
products to the e-commerce travel industry.
In connection with the proposed arrangement, we are offering to all of our
Series B preferred shareholders to exchange each Series B preferred share for
one share of our Series C convertible preferred stock. The exchange offer will
expire on _______, 2000, unless extended by us. The exchange offer is
conditioned upon the completion of the proposed arrangement with ▇▇▇▇▇▇▇▇▇▇.▇▇▇
and the approval by our common shareholders of the issuance of the Series C
convertible preferred stock. There is no minimum share tender requirement in
order to complete the exchange offer. The Series C shares are convertible into
our common stock, at a minimum conversion price of $6 per share, subject to
certain restrictions.
The exchange offer is required by the terms of the Preferred Stock Purchase
Agreement dated as of March 1, 2000 between ▇▇▇▇▇▇▇▇▇▇.▇▇▇ and us under which
▇▇▇▇▇▇▇▇▇▇.▇▇▇ purchased shares of our Series B preferred stock. We also issued
shares of Series B preferred stock in connection with a private financing
arranged by ▇▇▇▇▇▇ Capital Management, a division of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Inc. The purpose of the exchange offer is to provide the holders of Series B
preferred shares the opportunity to obtain preferred stock that is freely
transferable and convertible into common stock after completion of our proposed
arrangement with ▇▇▇▇▇▇▇▇▇▇.▇▇▇.
This letter is accompanied by our joint proxy statement/prospectus, dated
as of __________, 2000, the related Supplement dated as of _________, 2000, and
a Letter of Transmittal. We urge you to read these documents carefully for more
information about the Series C shares which you will be receiving in the
exchange offer and the procedures you must follow in order to tender your Series
B shares. We recommend that you elect to accept the exchange offer by completing
the Letter of Transmittal and delivering it to us along with your tendered
Series B share certificates at the address indicated on the Letter of
Transmittal. Please keep in mind that if you do wish to participate in the
exchange offer, it will be necessary for you to execute and deliver to us the
enclosed Letter of Transmittal in a timely manner.
If you do not wish to participate in the exchange offer, you may continue
to hold the Series B preferred shares. The Series B shares were sold with
certain restrictions on transfer, and will continue to be subject to such
restrictions in the future. In addition, the Series B shares are not convertible
and do not have general voting rights.
Please feel free to contact ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President and
Chief Financial Officer of Aviation Group, Inc., at (▇▇▇) ▇▇▇-▇▇▇▇, ext. 1102,
if you have any further questions regarding this exchange offer.
Yours truly,
___________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer