VI.DAE:CJVE2
September 14, 2000
VIA FACSIMILE 520-577-7441
John Van Egmond
President & CEO
Ozona Corporation
6900 North Ozona Drive
Tucson, Arizona 85718
Re: Don Addink
Dear John:
The purpose of this letter is to state the material terms of the
agreements between Ugly Duckling Corporation ("UDC") and the beneficiaries
and/or representative of the estate of Don Addink ("Addink"). UDC and Addink
have agreed to the following:
1. Addink holds approximately 96,000 shares of common stock of UDC
(the "UDC Stock"). The UDC Stock is held by the brokerage firm of
Roth Capital Partners, Inc. ("Roth"). Provided UDC obtains the
required approval of its creditor - General Electric, UDC shall
purchase and Addink shall sell all UDC Stock pursuant to a trade
executed by Roth within 30 days after UDC obtains the required
approval. The purchase price of the UDC Stock shall be $672,000.00
($7.00/share). UDC shall pay the purchase price for the UDC Stock
directly to Roth for application and disbursement by Roth.
2. Addink holds options to acquire 78,500 shares of common stock of
UDC (the "UDC Options"). UDC agrees to vest all unvested UDC
Options so that all UDC Options held by Addink are fully vested
and may be exercised at the prices provided in the Option
Agreements. The current value of the UDC Options is estimated to
be approximately $86,250.00 (the "UDC Options Value"). Addink
hereby waives, releases and cancels the UDC Options in
consideration of a payment by UDC to Addink of an amount equal to
the UDC Options Value. The UDC Options Value amount shall be paid
by UDC to Addink within 10 days after the date of this Agreement.
3. Addink is indebted to UDC under two Promissory Notes, one in the
original principal amount of $100,000.00, dated November 24, 1997,
and one in the original principal amount of $200,000.00, dated
September 3, 1998 (the "Promissory Notes"). The principal balance
due under the Promissory Notes is $300,000.00. The interest
accrued and due under the Promissory Notes due through June 30,
2000, is $51,392.89. UDC hereby waives all principal and interest
due under the Promissory Notes.
Page Two
John Van Egmond
September 14, 2000
If this letter accurately states the material terms of our agreements
regarding the transactions between UDC and Addink, please acknowledge acceptance
by signing this letter and returning it to me at your earliest convenience. If
you have any questions or comments regarding this statement of the material
terms of the agreements, please contact me at 602-778-5003.
John, your assistance and cooperation in these matters is greatly
appreciated by everyone at Ugly Duckling Corporation.
Very truly yours,
Ernie Garcia
Chairman
cc: Greg Sullivan
Steven P. Johnson
Accepted this ___ day of September, 2000.
- -----------------------------
John Van Egmond
Under Power of Attorney for
Mary Addink