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Steel Holdings To Purchase 7.5 Mln ModusLink Shares - Quick Facts

ModusLink Global Solutions Inc. (MLNK) announced it has entered into an investment agreement with Steel Partners Holdings L.P. (SPLP). Steel Holdings would purchase 7.5 million newly issued shares of ModusLink common stock at a price of $4.00 per share, representing a cash investment in the company, before fees and expenses, of $30 million. At the closing, ModusLink would issue Steel Holdings warrants to acquire 2.0 million shares at an exercise price of $5.00 per share. The Steel Group may purchase up to approximately 1.4 million shares of ModusLink's outstanding common stock.

Currently, Steel Partners Holdings L.P., together with certain affiliates including Handy & Harman Ltd. (HNH), beneficially owns 14.9 percent of ModusLink's outstanding shares. 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.

ModusLink also announced it has reached a settlement agreement with Handy & Harman in relation to the Annual Meeting. ModusLink has agreed to nominate and solicit proxies solely for the Steel Group representatives Warren Lichtenstein and Glen Kassan for election as Class I directors. 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 ModusLink.

ModusLink Directors Edward Lucente and Joseph O'Donnell would step down from the Board, and current Chairman Francis Jules and Director and Audit Committee Chairman Michael Mardy would each be reappointed to the Board as Class II directors. Lichtenstein would be designated Chairman of the Board. The size of the Board would be fixed at seven directors immediately following the Annual Meeting.

by RTT Staff Writer

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