Offer to Purchase for Cash
All Outstanding Shares of Common Stock,
Together With the Associated Rights Attached Thereto
of
KENETECH Corporation
at
$1.04 Net Per Share
by
KC Merger Corp.
a wholly owned subsidiary of
KC Holding Corporation
a wholly owned subsidiary of
ValueAct Capital Partners, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORKCITY
TIME, ON DECEMBER 7, 2000, UNLESS THE OFFER IS EXTENDED.
November 6, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November 6,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with the Offer to Purchase and any amendments or supplements thereto,
collectively constitute the "Offer") in connection with the offer by KC Merger
Corp., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of
KC Holding Corporation, a Delaware corporation ("Parent"), to purchase all of
the shares of common stock, par value $0.0001 per share ("Common Stock") of
KENETECH Corporation, a Delaware corporation (the "Company"), that are issued
and outstanding, together with the associated rights attached thereto (the
"Rights" and, together with the Common Stock, the "Shares") issued pursuant to
the Rights Agreement dated as of May 4, 1999, as amended, between the Company
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, for $1.04 per
share (such amount being the "Per Share Amount"), net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to
Purchase.
We are (or our nominee is) the holder of record of Shares held for your
account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $1.04 per Share, net to you in cash, without
interest thereon.
2. The Offer is being made for all of the outstanding Shares.
3. The Board of Directors of the Company (with Mark D. Lerdal
abstaining), based on the recommendation of a special committee of
independent directors, has (i) determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, are
fair to and in the best interests of the Company and its stockholders, (ii)
approved and declared advisable
the Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger and (iii) recommended that the stockholders tender
their Shares in the Offer and, if applicable, approve and adopt the Merger
Agreement in all respects.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on December 7, 2000, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer at
least the number of Shares that shall constitute 85% of the then
outstanding Shares on a fully diluted basis (excluding shares held by Mr.
Mark D. Lerdal, President and Chief Executive Officer of the Company, who
has agreed not to tender his Shares in the Offer).
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares
by Purchaser pursuant to the Offer.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. Purchaser is
not aware of any jurisdiction where the making of the Offer is prohibited by
any administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good faith effort to comply with such state statute. If, after such good faith
effort, Purchaser cannot comply with such state statute, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares held by us for your
account, please so instruct us by completing, executing and returning to us
the instruction form contained in this letter. An envelope in which to return
your instructions to us is enclosed. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified in your
instructions. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
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Instructions with Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock,
Together With the Associated Rights Attached Thereto
of
KENETECH Corporation
by
KC Merger Corp.
a wholly owned subsidiary of
KC Holding Corporation
a wholly owned subsidiary of
ValueAct Capital Partners, L.P.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 6, 2000, and the related Letter of
Transmittal (which, together with the Offer to Purchase and any amendments or
supplements thereto, collectively constitute the "Offer") in connection with
the offer by KC Merger Corp., a Delaware corporation and a wholly owned
subsidiary of KC Holding Corporation, a Delaware corporation, to purchase all
the shares of common stock, par value $0.0001 per share ("Shares"), of
KENETECH Corporation, a Delaware corporation, that are issued and outstanding.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Number of Shares To Be Tendered*:
___________________________________ Shares
Dated: _____________________________, 2000
SIGN HERE
___________________________________________________________________________
Signature(s)
___________________________________________________________________________
Please type or print name(s)
___________________________________________________________________________
Please type or print address
___________________________________________________________________________
Area Code and Telephone Number
___________________________________________________________________________
Taxpayer Identification or Social Security Number
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
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