February 11, 2002
Xxxxxx Xxxxx
Re: Xxxxxxxxx Agreement
Dear Xxxxx:
Ugly Duckling Corporation, a Delaware corporation and its subsidiaries and
affiliates (collectively, the "Duck") and yourself have entered into a Severance
Agreement of even date with the date of this letter, which agreement is
effective January 31, 2002 (the "Effective Date").
In connection with your severance arrangement with the Duck, it is also our
intent to address certain notes and/or advances that the Duck has made to you
over the course of your employment with the Duck. You entered into a Promissory
Note, dated May 15, 1998 (the "Note"), payable to the Duck for $100,000.00. The
proceeds of the Note were used to purchase 10,000 shares of Duck Stock (the
"Purchased Stock"). The Duck has also made other loans and/or advances to you
(the "Advances"). The Note and the Advances, in the aggregate and with accrued
interest, total $946,637.45. Attached to this letter are copies of the Note and
the documentation of the Advances. You tendered to UDC Acquisition Corp. the
Purchased Stock on or before January 16, 2002 in connection with the Amended
Tender Offer of UDC Acquisition Corp., Xxxxx Xxxxxx, Xxxx Xxxxxxxx and UDC
Holdings. Duck agrees that you will retain the proceeds paid to you for the
Purchased Stock. On or prior to that date thirty (30) days after the Effective
Date, in exchange for the payment to the Duck of $10,000, Duck shall transfer
and make the Note and the Advances payable to a third party mutually agreeable
to the Duck and Employee.
Except as otherwise set forth in the Severance Agreement and this letter, there
are no other terms or conditions applicable to your severance, your employment
with the Duck, your termination from employment from the Duck or the Note and
the Advances. As with the Severance Agreement, we advise you to seek the counsel
of advisors of your choosing as to the terms of this letter and the Severance
Agreement. In addition, this letter is subject to the same 21 day review and 7
day revocation periods as the Severance Agreement and this letter is not
enforceable for or against either of us until the seven day revocation period
has run and you have not revoked either this letter or the Severance Agreement.
If this letter accurately states your understanding of your Agreement with the
Duck, please sign where indicated below. We agree that this letter can be
executed in counterparts and each of us will accept facsimile signatures as
originals.
Sincerely,
Xxx X. Xxxxxxxx,
UDC VP/General Counsel/Secretary
The foregoing is hereby acknowledged and agreed to:
-----------------------
Xxxxx Xxxxx
