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			Exhibit 10.2

			

			

		

		
			STOCK GRANT AND

					GENERAL RELEASE AGREEMENT

				

			

		

		
			          This Stock Grant and General Release Agreement (“Agreement”) is entered into effective this 21st day of November, 2006 (the “Effective Date”) by and between Material Technologies, Inc., a Delaware corporation (“MaTech”), and Robert M. Bernstein, an individual (“Bernstein”).  MaTech and Bernstein shall each be referred to as a “Party” and collectively as the “Parties.”

				

			

		

		
			RECITALS

				

			

		

		
			          WHEREAS, Bernstein has recently signed a new employment agreement with Ma Tech for a three (3) year term (the “Employment Agreement”);

				

				          WHEREAS, the Board of Directors of MaTech (the “Directors”) wishes to issue to Bernstein shares of MaTech’s Class A common stock in appreciation of his work over the past several years, as well as a bonus for signing the Employment Agreement;

				

				          WHEREAS, the Directors and Bernstein have agreed that a forfeiture restriction will be placed on any and all shares of its Class A common stock issued under this Agreement such that if Bernstein is not employed continuously from the Effective Date and for the next thirty six (36) months, then he will forfeit the shares back to MaTech, unless such termination of employment is without cause or Bernstein is forced to resign for good reason, as defined herein;

				

				          NOW, THEREFORE, for good and adequate consideration, the receipt of which is hereby acknowledged, without admitting or denying any wrongdoing by any Party hereto, the Parties wish to resolve the dispute in full and therefore, covenant, promise and agree as follows:

				

			

		

		
			AGREEMENT

					

				

		

		
			          1.       Issuance of MaTech Shares.  As a bonus for Bernstein’s past work and his execution of the Employment Agreement, MaTech agrees to issue to Bernstein, as soon as possible, Thirty Million (30,000,000) shares of MaTech Class A common stock, restricted in accordance with Rule 144 and has set forth in Section 3, below (the “MaTech Shares”).   

				

				          2.       Consideration of Bernstein.  In exchange for the MaTech Shares, Bernstein agrees that any outstanding amounts that are currently due and owing to Bernstein from MaTech will be considered satisfied in their entirety and fully releases MaTech for all such amounts as set forth herein.

				

				          3.       Vesting of MaTech Shares.

				

		

		
			
				          (a)       The MaTech Shares will be “unvested shares” until the date which is thirty six (36) months from the Effective Date (the “Forfeiture Period”).  If Bernstein is not continuously employed by MaTech during and at the end of the Forfeiture Period, then Bernstein will be forced to forfeit the MaTech Shares to MaTech upon the cessation of his employment (a “Share Forfeiture”).

			

		

		

		

		

		
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			          (b)       Notwithstanding the above, if Bernstein ceases to be employed by MaTech as the result of a “Termination Without Cause” or a “Resignation For Good Reason,” as defined herein, then he will not be required to forfeit the MaTech Shares upon termination of his employment.

				

				          (c)       Under the terms of Bernstein’s Employment Agreement with MaTech dated October 1, 2006, MaTech is entitled to terminate Bernstein’s employment at any time with or without cause.  For the purposes of this Agreement, MaTech’s termination of Bernstein is a “Termination For Cause” if it is due to Bernstein: i) committing any material act of dishonesty, ii) disclosing Confidential Information, (as defined in the Employment Agreement), iii) is guilty of gross carelessness or gross misconduct, iv) engages in unfair competition (as defined in the Employment Agreement), or v) unjustifiably and materially neglects his duties under the Employment Agreement.  Any termination by MaTech of Bernstein’s employment for any reason other than those delineated in this Section will be considered a “Termination Without Cause.”

				

				          (d)       If Bernstein resigns from his employment with MaTech, then his resignation will be deemed a “Resignation for Good Reason” under the terms of this Agreement if, and only if, one or more of the following conditions occur and such condition(s) is (are) not fully corrected within ten (10) business days after written notice from Bernstein to MaTech:

			

			
				          (i)       the assignment to Bernstein of any duties or responsibilities materially inconsistent with the job description outlined in Section 2 of the Employment Agreement; or

					

					          (ii)      the failure by MaTech to either pay Bernstein any salary or bonus due hereunder within ten (10) business days of the date that such payment is due and/or to provide any employment benefits as required by his Employment Agreement.

			

		

		          4.       Shareholder Rights.  During the Forfeiture Period, Bernstein (or any successor in interest) shall have all stockholder rights (including voting, dividend and liquidation rights) with respect to the MaTech Shares, subject, however, to the forfeiture  restrictions discussed herein.

			

			          5.       Representation and Warranties of Bernstein.  Bernstein hereby represents and warrants that:

		

		
			          (a)       Bernstein is an individual with authority to execute and deliver this Agreement, and to carry out the provisions of this Agreement.

				

				          (b)       The Agreement, when executed and delivered, will create valid and binding obligations of Bernstein, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws 

		

		

		

		

		
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			of general application affecting enforcement of creditors’ rights, and (ii) general principles of equity that restrict the availability of equitable remedies.

				

				          (c)       Bernstein acknowledges that by executing this Agreement he is extinguishing all debts and/or other obligations owed to him by MaTech as of the date of this Agreement. 

				

				          (d)       Bernstein acknowledges and represents that in executing this Agreement, Bernstein has not relied on any inducements, promises, or representations made by any Party or any party representing or serving such Party, unless expressly set forth herein.

				

				          (e)       The MaTech Shares will be held in Bernstein’s own account, and not as a nominee or agent, and not with a view to the resale or distribution of all or any part of the MaTech Shares. Bernstein is prepared to hold the MaTech Shares for an indefinite period and has no present intention of selling, granting any participating interest in, or otherwise distributing any of the MaTech Shares.  Bernstein does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant a participating interest in, any of the MaTech Shares.

				

				          (f)       Bernstein has a preexisting business relationship with MaTech, which is of a nature and duration sufficient to make Bernstein aware of the character, business acumen and general business and financial circumstances of the.  In addition, Bernstein has been furnished with, and has had access to, such information concerning MaTech’s business, management and financial condition as he considers necessary or appropriate for deciding whether to accept the MaTech Shares, and Bernstein has had an opportunity to ask questions and receive answers from MaTech regarding the terms and conditions of the issuance of the MaTech Shares.

				

				          (g)       Bernstein is fully aware of: (i) the speculative nature of the MaTech Shares; (ii) the lack of liquidity for the MaTech Shares and (iii) the transfer restrictions and repurchase rights applicable to the MaTech Shares.

				

				          (h)       Bernstein is aware the MaTech Shares have not been registered under the 1933 Act and are being issued to Bernstein in reliance upon the exemption from such registration provided by Section 4(2) of the 1933 Act.  Bernstein hereby confirms that he has been informed that the MaTech Shares are restricted securities under the 1933 Act and may not be resold or transferred unless the MaTech Shares are first registered under the Federal securities laws or unless an exemption from such registration is available. Accordingly, Bernstein hereby acknowledges that Bernstein is prepared to hold the MaTech Shares for an indefinite period and that Bernstein is aware that SEC Rule 144 issued under the 1933 Act which exempts certain resales of unrestricted securities is not presently available to exempt the resale of the MaTech Shares from the registration requirements of the 1933 Act.

		

		

		

		

		

		

		

		
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		          6.       Representations and Warranties of MaTech.

		
			          (a)       MaTech is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  MaTech has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement, and to carry out the provisions of this Agreement.

				

				          (b)       All corporate action on the part of MaTech, its officers and directors necessary for the authorization of this Agreement, the performance of all obligations of MaTech hereunder, and the authorization and issuance of the MaTech Shares pursuant hereto, has been taken.  The Agreement, when executed and delivered, will create valid and binding obligations of MaTech enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (ii) general principles of equity that restrict the availability of equitable remedies. 

				

				          (c)       MaTech acknowledges and represents that in executing this Agreement, it has not relied on any inducements, promises, or representations made by any Party or any party representing or serving such Party, unless expressly set forth herein.

				

				          (d)       Neither this Agreement nor the consummation of the transactions provided for herein conflicts with or violates (i) any provision of MaTech’s Certificate of Incorporation, as amended, or Bylaws, (ii) any agreement by which MaTech or its stockholders, or any of its or their respective properties, is bound, or (iii) any federal, state or local law, rule or regulation or judicial order.

				

				          (e)       The MaTech Shares have been duly authorized and are fully paid and non-assessable and are being issued to Bernstein free and clear of any liens, claims or rights of any entity or person.

		

		          7.       Disposition of the MaTech Shares.  Bernstein shall make no disposition of the MaTech Shares during the Forfeiture Period and will not make disposition of the MaTech Shares after the Forfeiture Period unless and until there is compliance with all of the following requirements:

		

		
			          (a)       Bernstein shall have complied with all requirements of this Agreement applicable to the disposition of the MaTech Shares.

				

				          (b)       Bernstein shall have provided MaTech with written assurances, in form and substance satisfactory to MaTech, that (i) the proposed disposition does not require registration of the MaTech Shares under the 1933 Act or (ii) all appropriate action necessary for compliance with the registration requirements of the 1933 Act or any exemption from registration available under the 1933 Act (including Rule 144) has been taken.

		

		

		

		

		

		
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		          MaTech shall NOT be required (i) to transfer on its books any MaTech Shares which have been sold or transferred in violation of the provisions of this Agreement OR (ii) to treat as the owner of the MaTech Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom the MaTech Shares have been transferred in contravention of this Agreement.

		

		          A Permitted Transfer shall mean a transfer of title to the MaTech Shares effected pursuant to Bernstein’s will or the laws of intestate succession following Bernstein’s death.

		

		          8.       Restrictive Legends.  The stock certificates for the MaTech Shares shall be endorsed with one or more of the following restrictive legends and any legend required to be placed thereon by the applicable blue sky laws of any state:

		
			“The shares represented by this certificate have not been registered under the Securities Act of 1933.  The shares may not be sold or offered for sale in the absence of (a) an effective registration statement for the shares under such Act, (b) a “no action” letter of the Securities and Exchange Commission with respect to such sale or offer or (c) satisfactory assurances to Material Technologies, Inc. that registration under such Act is not required with respect to such sale or offer.”

				

				“The shares represented by this certificate are subject to certain forfeiture rights granted to Material Technologies, Inc. and accordingly may not be sold, assigned, transferred, encumbered, or in any manner disposed of except in conformity with the terms of the Stock Grant and Release Agreement dated November 21, 2006, between Material Technologies, Inc. and Robert M. Bernstein (or the predecessor in interest to the shares).  A copy of such agreement is maintained at Material Technologies, Inc.’s principal corporate offices.”

			

		

		          9.       Section 83(b) Election. 

		

		
			          (a)       Under Code Section 83, the excess of the fair market value of the MaTech Shares on the date any forfeiture restrictions applicable to such shares lapse over any price paid for such shares will be reportable as ordinary income on the lapse date.  For this purpose, the term “forfeiture restrictions” includes the forfeiture of the MaTech Shares pursuant to Section 3 of this Agreement.  Bernstein may elect under Code Section 83(b) to be taxed at the time the MaTech Shares are acquired, rather than when and as such MaTech Shares cease to be subject to such forfeiture restrictions.  Such election must be filed with the Internal Revenue Service within thirty (30) days after the date of this Agreement.  Even if the fair market value of the MaTech Shares on the date of this Agreement is $0 (and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future.  

				

				          (b)       Bernstein acknowledges that it is Bernstein’s sole responsibility, and not MaTech’s, to file a timely election under code section 83(b), even if Bernstein requests MaTech or its representatives to make this filing on his behalf.

		

		

		

		

		
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			          (c)       Bernstein acknowledges that it is his sole responsibility to make MaTech’s Board of Directors aware immediately upon filing an election under Code Section 83(b).

			

		

		          10.      General Release.  Effective on the date hereof, the Parties, and their respective agents, affiliates, divisions, predecessors, successors and assigns, hereby release the other Parties, and each and all of their present and former agents, officers, directors, attorneys, and employees, from and against any and all claims, agreements, contracts, covenants, representations, obligations, losses, liabilities, demands and causes of action which it may now or hereafter have or claim to have against that Party, as a result of any amounts owed by MaTech to Bernstein as of the date of this Agreement.  This release of claims and defenses shall not alter the prospective duties between the Parties under this Agreement.

			

			          11.      Acknowledgment of Effect of Release.  The Parties acknowledge and agree that this release applies to all claims that one Party may have against any other Party arising out of, or pertaining to, any amounts alleged to be owed by MaTech to Bernstein as of the date of this Agreement, including, but not limited to, causes of action, injuries, damages, claims for costs or losses to a Party’s person and property, real or personal, whether those injuries, damages, or losses are known or unknown, foreseen or unforeseen, or patent or latent.  The Parties agree not to file any complaints, causes of action, or grievances with any governmental, state or county entity against the other Party arising out of, or pertaining to any amounts alleged to be owed by MaTech to Bernstein as of the date of this Agreement.  Each Party further agrees and understands that the above releases will be effective as of the date of this Agreement and any Party’s sole remedy against any other Party regarding any amounts alleged to be owed by MaTech to Bernstein will be for breach of this Agreement.

			

			          12.      Section 1542 Release. It is understood and agreed by the Parties hereto that all rights under Section 1542 of the Civil Code of California, which provides as follows:

		

		
			“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor,”

		

		

		are hereby expressly waived.  The Parties acknowledge, agree and understand the consequences of a waiver of Section 1542 of the California Civil Code and assumes full responsibility for any and all injuries, damages, losses or liabilities that may hereinafter arise out of or be related to matters released hereunder.  Releasing Party understands and acknowledges that the significance and consequence of this waiver of Section 1542 of the Civil Code is that even if a Party should eventually suffer additional damages arising out of the subject matter hereof, it will not be permitted to make any claim for those damages.  Furthermore, all Parties acknowledge that they intend these consequences even as to claims for damages that may exist as of the date of this Agreement but which the Parties do not know exist, and which, if known, would materially affect the Parties’ decision to execute this Agreement, regardless of whether the Parties’ lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

			

			

			

		

		
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		          13.      No Employment Agreement or Contract.  The Employment Agreement will govern the terms of Bernstein’s employment and nothing in this Agreement shall confer upon Bernstein any right to continue in employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of MaTech (or any parent or subsidiary company employing or retaining Bernstein) or of Bernstein, which rights are hereby expressly reserved by each, to terminate Bernstein’s employment at any time for any reason, with or without cause.

			

		          14.      No Admission of Liability.  This Agreement pertains to an undetermined amount of money owed and does not constitute an admission of liability by any Party for any purpose, except as otherwise provided herein.

		

		          15.      Survival of Representations and Warranties.  The representations and warranties contained in this Agreement are deemed to and do survive the execution hereof.

		

		          16.      Amendments.  This Agreement may not be amended, canceled, revoked or otherwise modified except by written agreement subscribed by all of the Parties to be charged with such modification.

		

		          17.      Successors.  This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective partners, employees, agents, servants, heirs, administrators, executors, successors, representatives and assigns.

		

		          18.      Attorney’s Fees.  All Parties hereto agree to pay their own costs and attorneys’ fees except as follows:

		
			          (a)       In the event of any action, suit or other proceeding instituted to remedy, prevent or obtain relief from a breach of this Agreement, arising out of a breach of this Agreement, involving claims within the scope of the releases contained in this Agreement, or pertaining to a declaration of rights under this Agreement, the prevailing Party shall recover all of such Party’s reasonable attorneys’ fees and costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom.

				

				          (b)       As used herein, attorneys’ fees shall be deemed to mean the full and actual costs of any legal services actually performed in connection with the matters involved, calculated on the basis of the usual fee charged by the attorneys performing such services.

		

		          19.      Jurisdiction.  This Agreement and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

			

			          20.      Integration.  This Agreement sets forth the entire agreement and understanding of the Parties hereto and supersedes any and all prior agreements, arrangements and understandings related to the subject matter hereof.  No understanding, promise, inducement, statement of 

		

		

		

		
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		intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth.

		

		

		[signature page immediately follows]

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
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		          IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above.

		

		

			
					“MaTech”

						

					

					
					“Bernstein”

				
	
					Material Technologies, Inc.,

					
					Robert M. Bernstein,

				
	
					a Delaware corporation

					
					an individual

				
	
					

						

						/s/ William I. Berks                               

					
					

						

						/s/ Robert M. Bernstein                        

				
	
					By:       William I. Berks

					
					By:       Robert M. Bernstein

				
	
					Its:        A Director of MaTech acting on authority of the Board of Directors of MaTech by Board of Directors’ Resolution dated November 21, 2006

					
					            

				

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
			9Exhibit
      10.02

     

    AGREEMENT

     

    This
      Agreement (this “Agreement”) is dated and effective as of November 22, 2006 (the
“Effective Date”), by and among SAN Holdings, Inc., a Colorado corporation (the
“Company”) and each of the undersigned investors who have executed a counterpart
      hereof (each such investor is referred to as the “2006 Investor” and,
      collectively with the Company, the “Parties”). Capitalized terms used but not
      defined herein have the respective meanings set forth in the Registration Rights
      Agreement or, if not defined in the Registration Rights Agreement, have the
      respective meanings set forth in the Securities Purchase Agreement (each as
      defined below). 

     

    RECITALS

     

    WHEREAS,
      the Company sold in a private placement transaction Units to a number of
      accredited investors in Securities Purchase Agreements, dated as of February
      28,
      2006, April 18, 2006 and May 4, 2006 (the “Securities Purchase Agreements” and,
      the Securities Purchase Agreement to which the 2006 Investor is a party, the
      “Applicable Securities Purchase Agreement”), each by and among the Company and
      the purchasers identified on the signature pages thereto (collectively, the
      “2006 Investors”). 

     

    WHEREAS,
      each Unit consisted of (i) one share of Preferred Stock of the Company
      initially convertible into 333,333 shares of Common Stock, and (ii) a $0.30
      Warrant and a $0.50 Warrant, each of such Warrants initially exercisable into
      166,667 shares of Common Stock.

     

    WHEREAS,
      in connection with the Securities Purchase Agreements, the Company and the
      2006
      Investors entered into that certain Registration Rights Agreement, dated as
      of
      February 28, 2006 (the “Registration Rights Agreement” and, together with the
      Securities Purchase Agreements, the Certificate of Designation of the Preferred
      Stock and the Preferred Stock and Warrants issued thereunder, the “Transaction
      Documents”), by and among the Company and the 2006 Investors, which requires the
      Company to prepare and file with the Commission a Registration Statement (the
      “Resale Registration Statement”) covering the resale of all of the Registrable
      Securities. 

     

    WHEREAS,
      the Company previously filed the Resale Registration Statement with the
      Commission and has been informed by the Commission that, in order for the
      Commission to consider declaring the Resale Registration Statement effective,
      the Company initially will be permitted to register some but not all of the
      Registrable Securities for resale. 

     

    WHEREAS,
      Section 2 of the Registration Rights Agreement (the “Liquidated Damages
      Provision”) requires monthly payment (or accrual) of liquidated damages to the
      2006 Investors for, among other things, failure to have the Resale Registration
      Statement declared effective by the Commission relating to all of the
      Registrable Securities on or before the Effectiveness Date, in an amount equal
      to 2.0% of the aggregate purchase price paid by such 2006 Investor pursuant
      to
      the Securities Purchase Agreements for any Registrable Securities then held
      by
      such Holder, which liquidated damages accrue interest at a rate of 12% per
      annum
      (or such lesser maximum amount that is permitted to be paid by applicable law)
      (the “Liquidated Damages”). 

     

    
      
        
        

      

      
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    WHEREAS,
      as a result of the position of the Commission, the Parties are entering into
      this Agreement to clarify and set forth the amount of and payment terms for
      the
      payment of Liquidated Damages to the 2006 Investor pursuant to the Securities
      Purchase Agreement.

     

    WHEREAS,
      with respect to the 2006 Investor, the Company agrees to continue to use its
      best efforts to process the Resale Registration Statement with the Commission
      pursuant to and conditional upon acceptance of the terms of this Agreement.
      

     

    NOW,
      THEREFORE, IN CONSIDERATION of the above recitals, the mutual covenants
      contained in this Agreement, and for other good and valuable consideration
      the
      receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
      as follows: 

     

    TERMS
      AND CONDITIONS

     

    1. Accrued
      Liquidated Damages; No Additional Liquidated
      Damages.
      The
      Liquidated Damages that accrued from the Effectiveness Date until November
      15,
      2006 shall be referred to herein as the “Accrued Liquidated Damages.” The
      Accrued Liquidated Damages shall be due and payable to the 2006 Investor
      pursuant to the terms set forth herein. 

     

    Within
      30
      days of the date of this Agreement, the Company shall deliver to the 2006
      Investor an unsecured promissory note in a principal amount equal to the Accrued
      Liquidated Damages (the “Unsecured Promissory Note”). The Unsecured Promissory
      Note shall be delivered in a form reasonably acceptable to the 2006 Investors,
      shall accrue interest at a rate of 12% per annum (or such lesser maximum amount
      that is permitted to be paid by applicable law) and shall be payable 15 months
      from the date of issuance (or at such earlier date of an extraordinary corporate
      event such as reorganization, reclassification, merger, consolidation or
      disposition of substantially all of the assets of the Company). The Unsecured
      Promissory Note shall be payable by the Company in immediately available funds
      or, at the mutual agreement of the Parties, in shares of Common Stock (the
      terms
      of such issuance of Common Stock to be mutually agreed upon by the Parties).
      

     

    Notwithstanding
      anything to the contrary set forth in the Transaction Documents, except for
      the
      Accrued Liquidated Damages payable in accordance herewith, no additional
      liquidated damages shall accrue or be payable to the 2006 Investor pursuant
      to
      the Liquidated Damages Provision for any reason whatsoever and any additional
      or
      inconsistent provisions in the Transaction Documents are expressly amended
      hereby. 

     

    2. Reduction
      to Exercise Price of Warrants.
      By no
      later than December 31, 2006, the Company shall amend the Exercise Price of
      the
      $0.50 Warrants issued to the 2006 Investor pursuant to the Applicable Securities
      Purchase Agreement from $0.50 per share to $0.20 per share, it being understood
      that such revised Exercise Price shall apply to all provisions of the warrant
      agreements (including but not limited to Section 13 thereof), and that the
      Company shall make such other changes to the warrant agreements (including
      those
      relating to the $0.30 Warrants issued to the 2006 Investor pursuant to the
      Applicable Securities Purchase Agreement) as may be necessary or appropriate
      in
      connection with Section 3 hereof (collectively, the “Warrant Reprice”). The 2006
      Investor acknowledges that the Warrant Reprice may result in the delay or
      failure of the Commission to declare the Resale Registration Statement or any
      subsequent post-effective amendment thereto or new registration statement
      relating to Registrable Securities effective. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    3.
       Additional
      Financing.
      Notwithstanding anything to the contrary set forth in the Transaction Documents,
      the Company is expressly authorized to issue up to an additional $1.5 million
      in
      equity securities without triggering any of the exercise price or conversion
      price reset provisions or other triggers set forth in any of the Transaction
      Documents; provided, that terms of any such new financing or financings shall
      meet the following requirements: (a) any registration rights granted to such
      new
      securityholders shall have no greater than the same priority as the registration
      rights granted to the 2006 Investor under the Registration Rights Agreement
      and,
      to the extent that the Company is unable to register all the Registrable
      Securities together with the securities issued under the new financing or
      financings, registration rights shall be allocated on a pro
      rata
      basis;
      (b) the purchase price of any Common Stock issued in connection with any such
      new financing (or issuable upon conversion or exchange of any securities issued
      that are convertible into or exchangeable for Common Stock) shall be no less
      than $0.15 per share; (c) the exercise price of any warrants issued in
      connection with any such new financing shall be no less than the revised
      Exercise Price of the Warrants issued to the 2006 Investor as a result of the
      Warrant Reprice, such that no less than 50% of any new warrants must have an
      exercise price no less than $0.30 per share and the remaining 50% of any new
      warrants must have an exercise price of no less than $0.20 per share to avoid
      the application of Section 13 of the Warrants issued to the 2006 Investor
      pursuant to the Applicable Securities Purchase Agreement. 

     

    4.
       Registration
      of Registrable Securities.
      Notwithstanding the provisions in the Registration Rights Agreement relating
      to
      the responsibility of the Company to file registration statements covering
      the
      resale of all the Registrable Securities or any other provisions in the
      Transaction Documents (the “Registration Filing Requirement”), from the date
      hereof, the Company shall use its best efforts to process the Resale
      Registration Statement and have the same declared effective by the Commission,
      registering for resale a portion of the Registrable Securities held by the
      2006
      Investor in such amounts as the staff of the Commission may not object. The
      Company shall use its best efforts to register for resale the remainder of
      the
      Registrable Securities held by the 2006 Investor at such time as the staff
      of
      the Commission may not object. The Company’s sole responsibilities under the
      Transaction Documents with respect to the Registration Filing Requirement are
      set forth in this Section 4, and any additional or inconsistent provisions
      in
      the Transaction Documents are expressly amended hereby.

     

    5. Treatment
      of Other Provisions.
      Notwithstanding
      any provision to the contrary in the Transaction Documents, the execution,
      delivery and performance of this Agreement by the Parties, and of a
      substantially similar agreement by the Company and the other 2006 Investors,
      shall expressly be deemed to be an amendment of, and not a breach of, any
      inconsistent or additional provision of the Transaction Documents, and the
      same
      be deemed not to trigger any right, power or remedy of the Parties not expressly
      set forth herein, nor shall it trigger any of the exercise or conversion price
      reset provisions set forth in any of the Transaction Documents. 

     

    6. Disclosure
      of Transactions and Other Material Information.
      Within
      four business days of the Effective Date, the Company shall file a Current
      Report on Form 8-K with the Commission describing the material terms of this
      Agreement and the transactions contemplated hereby in the form required by
      the
      Exchange Act (including all exhibits, the “8-K Filing”). From and after the
      filing of the 8-K Filing, the 2006 Investor shall not be in possession of any
      material, nonpublic information received from the Company with respect to the
      transactions contemplated by this Agreement, except for such information that
      may be provided with the prior written consent of the 2006
      Investor.

     

    
      
        
        

      

      
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    7. Governing
      Law.  
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Colorado. If any proceeding is brought for the enforcement or breach
      of
      this Agreement, the successful or prevailing party shall be entitled to recover
      its reasonable attorneys’ fees, costs and expenses incurred in that proceeding
      in addition to any other relief to which it might be entitled.

     

    8. Representations
      and Warranties: 

     

    a. Non-Assignment
      of Claim.
      The
      Parties represent and warrant that they have not assigned any claim, in whole
      or
      in part, that each may have against the other that would otherwise be subject
      to
      the terms and conditions of this Agreement.

     

    b. Right
      to Counsel.
      Each
      Party acknowledges that it has read the Agreement, that it has had the
      opportunity to obtain the advice of independent counsel and is signing pursuant
      to the advice thereof, that each understands and fully agrees to every provision
      hereof, and that each has received a copy of this Agreement. 

     

    c. Execution,
      Delivery and Performance; No Conflicts.
      The
      undersigned individually warrant and represent that they are authorized to
      execute, deliver and perform this Agreement and, if applicable, that all
      necessary corporate (or other entity) action has been taken to authorize
      execution, delivery and performance of this Agreement and that the execution,
      delivery and performance of this Agreement does not and will not conflict with
      the undersigned’s charter documents (if such person is an entity) or conflict
      with, or constitute a default under, or give to others any rights of
      termination, amendment, acceleration or cancellation of any material agreement
      or other instrument or understanding to which such person is a party, except
      as
      such could not have or reasonably be expected to result in a material adverse
      effect. 

     

    d. Representations
      and Warranties in Transaction Documents. The
      representations and warranties of the 2006 Investor contained in the Applicable
      Securities Purchase Agreement and the Registration Rights Agreement remain
      true
      and correct as of the date hereof.

     

    9. Severability.
      The
      terms and conditions of this Agreement shall be severable, and the illegality
      or
      unenforceability of any provision and/or term contained herein shall have no
      effect upon and shall not impair the enforceability of any other provision
      of
      this Agreement. 

     

    10. Further
      Assurances. 
      All
      Parties agree to execute any additional documents and to take any additional
      actions that may be reasonably necessary in order to implement this Agreement.
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    11. Counterparts
      and Signatures.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed effective as an original. For purposes of this Agreement, a signature
      transmitted via facsimile shall be deemed effective as an original.

     

    12. Modifications
      and Amendments.
      This
      Agreement may not be modified or amended except by a writing, duly executed
      by
      the Parties hereto or their authorized representatives or agents. This Agreement
      may not be modified or amended by the oral representation or statement of any
      Party.

     

    13. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the Parties with respect
      to
      the subject matter expressly described in this Agreement, is a complete and
      exclusive statement of those terms. This Agreement cancels and supersedes all
      prior agreements, understandings, representations, and negotiations, both oral
      and written with respect to the matters expressly described in this Agreement.
      This Agreement is limited to the matters expressly described herein and shall
      not operate as a waiver of any right, power or remedy of the parties executing
      this Agreement not expressly set forth herein, nor constitute a waiver of any
      other provision of the Applicable Securities Purchase Agreement and the
      Registration Rights Agreement. All of the other covenants and provisions of
      the
      Transaction Documents have not been amended or modified and remain in full
      force
      and effect.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties to this Agreement have carefully read the above,
      know the contents hereof, and have executed the same of their own free and
      voluntary act based on a full and complete understanding of its effect as of
      the
      date first above written. 

     

    THE
      COMPANY:

     

    SAN
      HOLDINGS, INC.

     

     

    By:
      /s/
      Robert C. Ogden

    
      
        

      

      Name:
        Robert C. Ogden   

    

    Title:
      Chief
      Financial Officer and Secretary 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      PURCHASER SIGNATURE PAGE; 

    EXECUTED
      SIGNATURE PAGES INTENTIONALLY OMITTED]

     

    IN
      WITNESS WHEREOF, the Parties to this Agreement have carefully read the above,
      know the contents hereof, and have executed the same of their own free and
      voluntary act based on a full and complete understanding of its effect as of
      the
      date first above written. 

     

    2006
      INVESTOR:

     

    Name
      of
      Investing Entity: 

     

    ______________________________________________________

     

    Signature
      of Authorized Signatory of Investing entity: 

     

    ______________________________________________________

     

    Name
      of
      Authorized Signatory: 

     

    ______________________________________________________
      

     

    Title
      of
      Authorized Signatory: 

     

    ______________________________________________________

    
 

    
      
        
        

      

      
        7

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