X0201 3 2004-04-13 0 0000799097 SAN HOLDINGS INC SANZ.OB 0001193058 KREILEIN DAVID L 5200 TOWN CENTER CIRCLE SUITE 470 BOCA RATON FL 33486 1 0 0 0 Common Stock 55968562 I See footnote Stock Purchase Warrant Common Stock I See footnote David Kreilein ("Kreilein") is a limited partner of Sun Capital Advisors II, LP ("Sun Advisors II"), which in turn is the general partner of Sun Capital Partners II, LP ("Sun Partners II LP"). Sun Partners II LP owns all of the membership interests in Sun Solunet, LLC ("Sun Solunet"). As a result, Kreilein may be deemed to have indirect beneficial ownership of the 55,968,562 shares of Common Stock owned directly by Sun Solunet and the Stock Purchase Warrant pursuant to which Sun Solunet may purchase up to an aggregate of 19,976,737 shares of Common Stock. Kreilein expressly disclaims beneficial ownership of any shares of Common Stock in which he does not have a pecuniary interest. Pursuant to the terms of the Stock Purchase Warrant (the "SANZ Warrant"), Sun Solunet may purchase up to an aggregate of 19,976,737 shares of Common Stock over a term of 10 years at prices ranging from $0.29 to $10.82 per share, with a weighted average price of $0.94 per share. The SANZ Warrant is exercisable only after warrants, options or other conversion rights that were issued and outstanding immediately prior to April 4, 2003 and that are exercisable for shares of Common Stock (the "Pre-Merger Options") have been exercised, resulting, in the aggregate, in the issuance of shares of Common Stock equal to or exceeding 2,958,951 shares (the "Threshold Amount"). After such time, if at all, as the Threshold Amount is achieved and any additional Pre-Merger Options (each a "Post-Threshold Option") have been exercised, Sun Solunet has the right to purchase 1.5 times the number of shares of Common Stock exercised by the holder of a Post-Threshold Option at the exercise price associated with such Post-Threshold Option. /s/ David Kreilein 2004-04-22