X0202 4 2005-05-16 0 0000799097 SAN HOLDINGS INC SANZ.OB 0001226013 SUN SOLUNET LLC 0 0 1 0 0001129733 SUN CAPITAL PARTNERS II LP 5200 TOWN CENTER CIRCLE SUITE 470 BOCA RATON FL 33486 0 0 1 0 0001249758 SUN CAPITAL ADVISORS II LP 0 0 1 0 0001249755 SUN CAPITAL PARTNERS LLC 0 0 1 0 0001193052 LEDER MARC J 5200 TOWN CENTER CIRCLE, SUITE 470 BOCA RATON FL 33486 1 0 1 0 0001193057 KROUSE RODGER R 5200 TOWN CENTER CIRCLE, SUITE 470 BOCA RATON FL 33486 1 0 1 0 Stock Purchase Warrant .001 2005-05-16 4 P 0 1 A 2005-05-16 2013-04-04 Common Stock 2224522 4 I See footnote Marc J. Leder ("Leder") and Rodger R. Krouse ("Krouse") each currently serve as a director of the Issuer. In addition, Leder and Krouse each own 50% of the membership interests in Sun Capital Partners, LLC ("Sun Partners LLC"), which in turn is the general 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 99% of the membership interests of Sun Solunet, LLC ("Sun Solunet"). As a result, Leder, Krouse, Sun Partners LLC, Sun Advisors II, and Sun Partners II LP may be deemed to have indirect beneficial ownership of the Stock Purchase Warrants pursuant to which Sun Solunet may purchase shares of Common Stock of the Issuer. Leder, Krouse, Sun Partners LLC, Sun Advisors II, and Sun Partners II LP each expressly disclaim beneficial ownership of any shares of Common Stock in which they do not have a pecuniary interest. On March 31, 2003, the Issuer, Sun Partners II LP, Solunet Storage Holding Corp. and Sun Solunet entered into a letter agreement (the "Credit Support Agreement") providing that (i) Sun Partners II LP would guaranty certain indebtedness of the Issuer and/or its subsidiaries in an amount equal to $3,000,000 (the "Initial Guaranty Amount"), (ii) in addition to the Initial Guaranty Amount, Sun Partners II LP may guaranty additional indebtedness (the "Additional Guaranty") of the Issuer and/or its subsidiaries and (iii) if any Additional Guaranty was not released within eighteen (18) months after the initial effective date of the Additional Guaranty, the Issuer would grant a stock purchase warrant to Sun Solunet, exercisable for a number of shares of common stock of the Issuer determined pursuant to a formula based on the amount that Sun Partners II LP's outstanding guaranty provided on behalf of the Issuer exceeds the Initial Guaranty Amount. Pursuant to the Credit Support Agreement, on May 16, 2005, the Issuer issued to Sun Solunet a stock purchase warrant, exercisable for 2,244,522 shares of common stock of the Issuer, at an exercise price of $0.001 per share. Until the guaranteed debt is reduced to $3,000,000 or less, the Issuer will be required to issue additional warrants to Sun Solunet at six-month intervals based upon formulas set forth in the Credit Support Agreement. Sun Solunet, LLC - by Marc J. Leder, its authorized signatory 2005-05-16 Sun Capital Partners II, LP - by Marc J. Leder, its authorized signatory 2005-05-16 Sun Capital Advisors II, LP - by Marc J. Leder, its authorized signatory 2005-05-16 Sun Capital Partners, LLC - by Marc J. Leder, its authorized signatory 2005-05-16 /s/ Marc J. Leder 2005-05-16 /s/ Rodger R. Krouse 2005-05-16