STOCKHOLDERS AGREEMENT





     THIS AGREEMENT is made as of ____________ __, 2000, by and among KC Holding

Corporation, a Delaware corporation (the "Company"), the Persons listed on

Schedule A attached hereto (the "Investing Stockholders"), and Mark D. Lerdal

(the "Executive Stockholder"). The Investing Stockholders and the Executive

Stockholder are collectively referred to as the "Stockholders" and individually

as a "Stockholder." Except as otherwise specified herein, capitalized terms used

herein are defined in paragraph 11 hereof.



     The Investing Stockholders shall purchase shares of Common Stock of the

Company and the Executive Stockholder shall receive shares of Common Stock of

the Company in exchange for his existing shares of common stock of KENETECH

Corporation, a Delaware corporation, pursuant to a subscription and contribution

agreement between the Company and the Stockholders dated as of October 24, 2000

(the "Subscription Agreement"). The Company and the Stockholders desire to enter

into this Agreement for the purposes, among others, of (i) establishing the

composition of the Company's Board of Directors (the "Board"), (ii) providing

the Executive Stockholder certain veto rights with respect to certain corporate

transactions, (iii) assuring continuity in the management and ownership of the

Company and (iv) limiting the manner and terms by which the Stockholder Shares

may be transferred. The execution and delivery of this Agreement is a condition

to the Stockholders' purchase of the Company's Common Stock pursuant to the

Subscription Agreement.



     NOW, THEREFORE, in consideration of the mutual covenants contained herein

and other good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the parties to this Agreement hereby agree as follows:



    1.   Board of Directors.



    (a) From and after the Closing (as defined in the Subscription Agreement)

and until the provisions of this paragraph 1 cease to be effective, each holder

of Stockholder Shares shall vote all of his Stockholder Shares which are voting

shares and any other voting securities of the Company over which such holder has

voting control and shall take all other necessary or desirable actions within

his control (whether in his capacity as a stockholder, director, member of a

board committee or officer of the Company or otherwise, and including, without

limitation, attendance at meetings in person or by proxy for purposes of

obtaining a quorum and execution of written consents in lieu of meetings), and

the Company shall take all necessary or desirable actions within its control

(including, without limitation, calling special board and stockholder meetings),

so that:



          (i) the authorized number of directors on the Board shall be

     established at three directors;



          (ii) the following individuals shall be elected to the Board:



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               (A) one representative designated by the Executive Stockholder

     (the "Management Director"), which shall be Mr. Mark Lerdal;



               (B) two representatives elected by the Investing Stockholders,

     determined by the holders of a majority of the Stockholder Shares held by

     the Investing Stockholders (the "Investor Directors"), provided that until

     the first annual meeting of the Company's stockholders, Jeffrey Ubben and

     Peter Kamin shall serve as the Investor Directors.



          (iii)  the composition of the board of directors of each of the

     Company's Subsidiaries (a "Sub Board") shall be the same as that of the

     Board;



          (iv)  there shall be no executive committee of the Board or any other

     committee of the Board with general authority to act as the Board;



          (v) the removal without cause from the Board or a Sub Board of any

     director designated hereunder by either the Investing Stockholders or the

     Executive Stockholder shall be only at the written request of the

     Stockholder who designated such director (determined on the basis of a vote

     of the holders of a majority of the Stockholder Shares held by such

     Persons); and



          (vi)  in the event that any director designated hereunder by the

     Investing Stockholders or the Executive Stockholder ceases to serve as a

     member of the Board or a Sub Board during his term of office, the resulting

     vacancy on the Board or the Sub Board shall be filled by a director

     selected by the Stockholder who designated such representative, as provided

     in this paragraph 1(a).



     (b) The Company shall pay the reasonable out-of-pocket expenses incurred by

each director in connection with attending the meetings of the Board, any Sub

Board and any committee thereof.  So long as any director appointed pursuant to

Section 1(a) serves on the Board and for three years thereafter, the Company

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