|Mind the Trap|
You simply travel just north of the camp, and Ugly is holed up among a small crescent of rocks with a camp.
Notes: It is possible to pickpocket Ugly if you sneak up behind him.
If you equip your Orc Armour here and walk up to him, he does not attack you and the green quest-chat icon appears. However, you cannot speak to him, presumably because only some Orcs speak human language.