X0202 4 2006-03-02 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 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 0001249758 SUN CAPITAL ADVISORS II LP 0 0 1 0 Series A Preferred Stock 2006-03-02 4 P 0 1 A 2006-03-02 Common Stock 58833451 7 I See footnote Stock Purchase Warrant 0.30 2006-03-02 4 P 0 1 A 2006-03-02 2011-03-02 Common Stock 29416726 8 I See footnote Stock Purchase Warrant 0.50 2006-03-02 4 P 0 1 A 2006-03-02 2011-03-02 Common Stock 29416726 9 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 2, 2006, the Issuer sold Sun Solunet and various other purchasers securities in a private placement transaction pursuant to a securities purchase agreement (the "Securities Purchase Agreement"). Pursuant to the Securities Purchase Agreement, the Issuer issued to Sun Solunet 176.5 units ("Units"), with each Unit consisting of (i) one share of the Issuer's newly designated convertible Series A Preferred Stock, no par value per share, initially convertible into 333,333 shares of the Issuer's common stock, no par value per share; (ii) a warrant to purchase 166,667 shares of common stock exercisable until March 2, 2011 at an initial exercise price of $0.30 per share ("Warrant A"); and (iii) a warrant to purchase 166,667 shares of common stock exercisable until March 2, 2011 at an initial exercise price of $0.50 per share ("Warrant B"). Holders of Series A Preferred Stock are entitled to receive cumulative stock dividends payable in shares of the Issuer's common stock. The Series A Preferred Stock has no expiration date. In the aggregate Sun Solunet's 176.5 shares of Series A Preferred Stock are convertible into 58,833,451 shares of common stock of the Issuer. Pursuant to the Securities Purchase Agreement, on March 2, 2006, the Issuer issued to Sun Solunet a stock purchase warrant, exercisable for 29,416,726 shares of common stock of the Issuer, at an exercise price of $0.30 per share. Pursuant to the Securities Purchase Agreement, on March 2, 2006, the Issuer issued to Sun Solunet a stock purchase warrant, exercisable for 29,416,726 shares of common stock of the Issuer, at an exercise price of $0.50 per share. Sun Solunet, LLC - by Marc J. Leder, its authorized signatory /s/ Marc J. Leder 2006-03-09 Sun Capital Partners II, LP - by Marc J. Leder, its authorized signatory /s/ Marc J. Leder 2006-03-09 Sun Capital Advisors II, LP - by Marc J. Leder, its authorized signatory /s/ Marc J. Leder 2006-03-09 Sun Capital Partners, LLC - by Marc J. Leder, its authorized signatory /s/ Marc J. Leder 2006-03-09 Marc J. Leder /s/ Marc J. Leder 2006-03-09 Rodger R. Krouse /s/ Rodger R. Krouse 2006-03-09