ModusLink Announces $30 Million Investment Agreement with Steel Partners Holdings L.P.

  ModusLink Announces $30 Million Investment Agreement with Steel Partners
  Holdings L.P.

Steel Holdings agrees to acquire 7.5 million ModusLink shares at $4 per share,
                           representing 45% premium

Company announces settlement with Handy & Harman Ltd. in relation to upcoming
                        annual meeting of stockholders

Business Wire

WALTHAM, Mass. -- February 11, 2013

ModusLink Global Solutions^(TM), ^ Inc. (NASDAQ: MLNK) today announced that it
has entered into an investment agreement with Steel Partners Holdings L.P.
(NYSE: SPLP, “Steel Holdings”), which together with certain affiliates,
including Handy & Harman Ltd. (NASDAQ: HNH, “Handy & Harman”) (together, the
“Steel Group”), beneficially owns 14.9 percent of ModusLink’s outstanding
shares.

Under the terms of the agreement, Steel Holdings would purchase 7.5 million
newly issued shares of common stock at a price of $4.00 per share,
representing a cash investment in the Company, before fees and expenses, of
$30 million. The $4.00 purchase price per share represents a 45 percent
premium to the closing market price for ModusLink common stock on Friday,
February 8, 2013.

In addition, at the closing of the transaction the Company would issue Steel
Holdings warrants to acquire 2.0 million shares at an exercise price of $5.00
per share. In addition, the Steel Group may purchase up to approximately 1.4
million shares of ModusLink’s outstanding common stock, subject to
proportionate adjustment. If all stock is purchased and all warrants are
exercised as permitted under the agreement, the Steel Group would own
approximately 32.6 percent of ModusLink’s outstanding shares. The investment
is subject to certain enumerated closing conditions, including shareholder
approval of the investment pursuant to Nasdaq Listing Rule 5635(b) and the
election of two Steel Group designees to the ModusLink board of directors at
the Company’s 2012 Annual Meeting of Stockholders (the “Annual Meeting”).

In connection with the investment agreement, ModusLink also announced that it
has reached a settlement agreement with Handy & Harman in relation to the
Annual Meeting. Under the terms of the settlement agreement, ModusLink has
agreed to nominate and solicit proxies solely for the Steel Group
representatives Warren G. Lichtenstein and Glen M. Kassan for election at the
Annual Meeting as Class I directors. Mr. Lichtenstein is Chairman of the Board
of Directors of Handy & Harman and Chairman of the Board and Chief Executive
Officer of the general partner of Steel Holdings. Mr. Kassan is Vice Chairman
of the Board of Directors of Handy & Harman and Managing Director at Steel
Partners LLC. Handy & Harman has agreed to withdraw its preliminary proxy
statement and to end its proxy solicitation, and has entered into certain
other standstill arrangements with the Company.

Upon consummation of the investment, ModusLink Directors Edward E. Lucente and
Joseph M. O’Donnell would step down from the Board, and current Chairman
Francis J. Jules and Director and Audit Committee Chairman Michael J. Mardy,
whose terms on the Board conclude at the Annual Meeting, would each be
reappointed to the Board as Class II directors. In addition, at that time, Mr.
Lichtenstein would be designated Chairman of the Board of the Company. The
size of the Board would be fixed at seven directors immediately following the
Annual Meeting.

ModusLink expects to announce the date and location of the Annual Meeting in
connection with the filing of its definitive proxy statement concerning the
transaction which will, in addition to seeking the election of the Steel Group
representatives and approval of the investment, seek approval of the
declassification of the Company’s Board of Directors such that the annual
election of all directors would take place beginning at the 2013 annual
meeting. The Board is submitting this latter proposal in response to the
approval at the 2011 annual meeting of a shareholder proposal urging such
change.

“The commitment of new capital from Steel Holdings at a significant premium to
the recent price of ModusLink shares is a strong vote of confidence in
ModusLink’s future by our largest stockholder,” said Mr. Jules. “The
investment also validates the recent strategic changes and improvements the
Company has undertaken, and further strengthens the Company’s balance sheet.
We are also pleased to reach an agreement where the Company will be nominating
Warren Lichtenstein and Glen Kassan, two highly qualified nominees, for
election to ModusLink’s board of directors at our upcoming annual meeting. The
Board looks forward to the opportunity to work with Warren and Glen to
increase stockholder value.”

“We have worked constructively with ModusLink to reach these agreements and
are excited by the opportunity to invest further in the Company’s future and
to contribute significantly to the creation of value for all ModusLink
stockholders,” said Mr. Lichtenstein. “I believe ModusLink has considerable
potential for value creation as evidenced by Steel Holdings’ investment. I
also believe that Glen and I are well suited to help the Company towards that
objective and we look forward to working with the rest of the Board and
ModusLink management to that end.”

Complete details of the investment agreement and settlement agreement will be
contained in the Company’s Current Report on Form 8-K, which will be filed
with the Securities and Exchange Commission.

Goldman, Sachs & Co. is serving as financial advisor and Latham & Watkins LLP
is serving as legal counsel to ModusLink. Olshan Frome Wolosky LLP is serving
as legal counsel to Steel Holdings and Handy & Harman.

About Warren G. Lichtenstein

Warren G. Lichtenstein has served as the Chairman of the Board and Chief
Executive Officer of the general partner of Steel Holdings, a global
diversified holding company that owns and operates businesses and has
significant interests in leading companies in a variety of industries,
including diversified industrial products, energy, defense, banking, and food
products and services, since July 15, 2009. He is also the Chairman and Chief
Executive Officer of Steel Partners LLC, a subsidiary of Steel Holdings, and
has been associated with Steel Partners LLC and its affiliates since 1990. Mr.
Lichtenstein has served as Chairman of the Board of Handy & Harman, a
diversified global industrial company, since July 2005. He is a Co−Founder of
Steel Partners Japan Strategic Fund (Offshore), L.P., a private investment
partnership investing in Japan, and Steel Partners China Access I LP, a
private equity partnership investing in China. He also co−founded Steel
Partners II, L.P., a private investment partnership that is now a wholly−owned
subsidiary of Steel Holdings, in 1993. Mr. Lichtenstein has served as a
director of GenCorp Inc., a manufacturer of aerospace and defense products and
systems with a real estate business segment, since March 2008. He has served
as a director of SL Industries, Inc. (“SLI”), a company that designs,
manufactures and markets power electronics, motion control, power protection,
power quality electromagnetic and specialized communication equipment, since
March 2010. From May 2001 to November 2007, Mr. Lichtenstein served as a
director (formerly Chairman of the Board) of United Industrial Corporation
(“United Industrial”), a company principally focused on the design, production
and support of defense systems, which was acquired by Textron Inc.

About Glen M. Kassan

Glen M. Kassan is a Managing Director and operating partner of Steel Partners
LLC, a global management firm, and has been associated with Steel Partners LLC
and its affiliates since August 1999. Mr. Kassan served as the Vice President,
Chief Financial Officer and Secretary of a predecessor entity of Steel
Holdings from June 2000 to April 2007. Mr. Kassan has served as a director of
Handy & Harman since July 2005, as the Vice Chairman of the Board since
October 2005 and as Chief Executive Officer from 2005 to 2012. He has served
as a director of SLI since January 2002 and its Chairman of the Board since
May 2008. He previously served as SLI’s Vice Chairman of the Board from August
2005 to May 2008, its President from February 2002 to August 2005, its interim
Chief Executive Officer from June 14, 2010 to June 29, 2010 and its interim
Chief Financial Officer from June 14, 2010 to August 30, 2010. He was a
director of United Industrial from October 2002 to November 2007.

About ModusLink Global Solutions

ModusLink Global Solutions Inc. (NASDAQ: MLNK) executes comprehensive supply
chain and logistics services that improve clients’ revenue, cost,
sustainability and customer experience objectives. ModusLink is a trusted and
integrated provider to the world’s leading companies in consumer electronics,
communications, computing, medical devices, software, luxury goods and retail.
The Company’s operating infrastructure annually supports more than $80 billion
of its clients’ revenue and manages approximately 470 million product
shipments through more than 30 sites in 15 countries across North America,
Europe, and the Asia/Pacific region. For details on ModusLink’s flexible and
scalable solutions visit www.moduslink.com and www.valueunchained.com, the
blog for supply chain professionals.

ModusLink Global Solutions is a registered trademark of ModusLink Global
Solutions, Inc. All other company names and products are trademarks or
registered trademarks of their respective companies.

Important Additional Information

ModusLink, its directors and certain of its executive officers and employees
are participants in a solicitation of proxies in connection with its 2012
annual meeting of stockholders (the “2012 Annual Meeting”). Important
information concerning the identity and interests of these persons is
available in ModusLink’s preliminary proxy statement filed with the Securities
and Exchange Commission (the “SEC”) on December 21, 2012, as amended on
January 7, 2013. ModusLink plans to file with the SEC and mail to its
stockholders a definitive proxy statement in connection with the 2012 Annual
Meeting. Information regarding the identity of the participants, and their
direct or indirect interests, by security holdings or otherwise, is set forth
in the preliminary proxy statement and ModusLink’s Annual Report on Form 10-K
for the year ended July 31, 2012. To the extent holdings of ModusLink
securities have changed since the amounts printed in the preliminary proxy
statement for the 2012 Annual Meeting, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with the SEC.

Copies of ModusLink’s preliminary proxy statement, any other relevant
documents and other materials filed with the SEC concerning ModusLink, when
filed, may be obtained free of charge at http://www.sec.gov and
http://www.ir.moduslink.com. Stockholders should carefully read the proxy
statement and the accompanying proxy card when they become available before
making any voting decision.

Forward-Looking Statements

This press release contains forward-looking statements, which address a
variety of subjects including, for example, the consummation and impact of the
announced transaction and the Company’s prospects for creating value for
stockholders. All statements other than statements of historical fact,
including without limitation, those with respect to the Company’s goals,
plans, expectations and strategies set forth herein are forward-looking
statements. The following important factors and uncertainties, among others,
could cause actual results to differ materially from those described in these
forward-looking statements: the announced transaction is subject to certain
enumerated closing conditions and there can be no assurance that such
conditions will be met and the transaction will be consummated; the Company’s
success, including its ability to meet its revenue, operating income and cost
savings targets, maintain and improve its cash position, expand its operations
and revenue, lower its costs, improve its gross margins, reach and sustain
profitability, reach its long-term objectives and operate optimally, depends
on its ability to execute on its business strategy, including the investment
and costs savings plan and the continued and increased demand for and market
acceptance of its services; global economic conditions, especially in the
technology sector are uncertain and subject to volatility; demand for our
clients’ products may decline or may not achieve the levels anticipated by our
clients; the Company's management may face strain on managerial and
operational resources as they try to oversee the expanded operations; the
Company may not realize the expected benefits of its restructuring and cost
cutting actions; the Company may not be able to expand its operations in
accordance with its business strategy; the Company’s cash balances may not be
sufficient to allow the Company to meet all of its business and investment
goals; the Company may experience difficulties integrating technologies,
operations and personnel in accordance with its business strategy; the Company
derives a significant portion of its revenue from a small number of customers
and the loss of any of those customers could significantly damage the
Company’s financial condition and results of operations; the Company
frequently sells to its supply chain management clients on a purchase order
basis rather than pursuant to contracts with minimum purchase requirements,
and therefore its sales and the amount of projected revenue that is actually
realized are subject to demand variability; risks inherent with conducting
international operations; tax rate expectations are based on current tax law
and current expected income and may be affected by the jurisdictions in which
profits are determined to be earned and taxed, changes in estimates of
credits, benefits and deductions, the resolution of issues arising from tax
audits with various tax authorities, including payment of interest and
penalties and the ability to realize deferred tax assets; the potential tax
benefits represented by the net operating loss carryforwards may not be
realized and the tax benefit preservation plan may not be effective in
preserving those benefits; the mergers and acquisitions and IPO markets are
inherently unpredictable and liquidity events for companies in the Company’s
venture capital portfolio may not occur; and increased competition and
technological changes in the markets in which the Company competes. For a
detailed discussion of cautionary statements that may affect the Company’s
future results of operations and financial results, please refer to the
Company's filings with the Securities and Exchange Commission, including the
Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. Forward-looking statements represent management's current expectations
and are inherently uncertain. We do not undertake any obligation to update
forward-looking statements made by us.

Contact:

ModusLink Global Solutions
Robert Joyce, 781-663-5120
ir@moduslink.com
 
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