SITE INFORMATION AND CORRESPONDENCE

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STARSKY & KIRK LLp ATTORNEYS AT LAW SUM 264 6M UNIVERSITY AVENUE SACRAMENTO, CALIFORNIA 95825-6710 TELEPHONE (916) 567-3%0 TELECOPIER (916) 567-3%7 March 2, 1999 CONFIDENTIAL COMMUNICATION-FOR SETTLEMENT PURPOSES ONLY VIA TELECOPIER L209/469-0314)AND U.S. MAIL David 7. Irey,Esq. Deputy District Attorney Enviroumnental Prosecutions Unit Office of the District Attorney San Joaquin County Courthouse- P.O. Box 990 Stockton, CA 95201 Re: Unocal Corooration- Stockton Service Stations Dear Mr.Irey. This will confirm our telephone conversation yesterday wherein we discussed the "settlement in principle" between our clients, including the two issues that remained after our conversation of February 17, 1999, i.e., allocation of penalties and Unocal's application to the State Water Board for Suspension of Work at 1665 Pacific Avenue. As I advised you during our eouversation, Unocal has no objection to the county allocating the agreed-to penalty of$182,500 one-half to the alleged UST violations and one-half to the alleged unfair business practices. However, as I also told you, Unocal will not withdraw its application to the State Water Resources Control Board, pursuant to California Health and Safety Code Section 25299.39.2, for site closure at 1665 Pacific Avenue, as you have requested. Unocal believes that your request is an inappropriate condition of settlement and that settlement of these matters should not be contingent upon whether or not Unocal exercises its Constitutional right to avail itself of a procedure that has been established by the Legislature for resolving disputes over cleanup actions. San Joaquin County PHS/EHD was aware of Unocal's position with respect to the site's closure since its petition was filed in June 1997. Indeed, the timing of PHS/EI-ID's EXIMIT 9