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ModusLink Sends Letter To Stockholders

Stocks in this article: MLNK PRLS

ModusLink Global Solutions (TM), Inc. (NASDAQ: MLNK), today announced that it is mailing a letter to stockholders in connection with the Company’s Annual Meeting of Stockholders to be held on January 20, 2012.

ModusLink’s Board of Directors unanimously recommends that stockholders vote “FOR” the Company’s two experienced and highly-qualified nominees for director: Thomas H. Johnson and Jeffrey J. Fenton – on the WHITE proxy card. The Company also urges shareholders to discard any gold proxy card that they receive from Peerless Systems Corporation (NASDAQ: PRLS). Stockholders are encouraged to vote by telephone, Internet or by signing, dating and returning the WHITE proxy card TODAY.

The text of the letter to ModusLink stockholders is below:

December 16, 2011

Dear Fellow Stockholder:

Your Vote is Critical to the Future of ModusLink

At ModusLink Global Solutions, Inc.’s Annual Meeting of Stockholders on January 20, 2012, you will be asked to determine which director nominees best serve the interests of ALL ModusLink stockholders.

Your Board of Directors unanimously recommends that you vote for ModusLink’s experienced and accomplished director nominees: Thomas (“Tom”) H. Johnson and Jeffrey (“Jeff”) J. Fenton.

Despite the fact that Peerless Systems Corporation has been an investor in ModusLink for only five months, it has initiated a disruptive proxy contest in opposition to your Board of Directors. Peerless is seeking to elect its own slate of two nominees – neither of whom is familiar with ModusLink or the industry in which it operates. Particularly disconcerting, Peerless has yet to outline any constructive strategy or plan for ModusLink.

Protect the value of your investment in ModusLink. Please use the enclosed WHITE proxy card today to vote for ModusLink’s nominees by telephone, by Internet or by signing, dating and returning the WHITE proxy card. Please simply discard any Gold proxy card you may receive from Peerless, as submitting a vote using the Gold card will cancel any previous vote you have submitted for ModusLink.

PEERLESS HAS FAILED TO ARTICULATE ANY PLAN OR SPECIFIC RECOMMENDATIONS FOR MODUSLINK

It is clear that Peerless and its nominees are not familiar with ModusLink or the industry in which it operates. Peerless, throughout multiple phone calls and in-person meetings with your Company – and now in its communications with stockholders – has failed to articulate any strategy or plan for the Company. How can Peerless, a ModusLink stockholder for only five months, expect that stockholders would choose to elect to the Board nominees who lack an understanding of the Company’s business and have no plan for creating value for all stockholders? In fact, Peerless readily admits in its proxy materials that its nominees “do not have specific plans as of this date with respect to enhancing the value of the Company.”

PEERLESS IS ONLY INTERESTED IN PURSUING ITS OWN SELF-SERVING AGENDA AND OBTAINING SHORT-TERM GAINS

Historically, Peerless was a company that provided imaging and networking technologies. However, since Timothy Brog, one of Peerless’ nominees, took control of Peerless, it has somehow evolved into a publicly traded hedge fund, albeit with only approximately $13 million under management. Since first buying stock approximately five months ago, Peerless has now acquired a position of approximately 2.4 percent of ModusLink stock. Less than just one month after becoming a ModusLink stockholder, Peerless notified us of its intent to nominate director candidates.

According to Peerless’ proxy materials, since becoming a stockholder in August this year, Peerless has executed 40 separate purchases and sales of ModusLink stock. Furthermore since October 4, 2011, Peerless has sold approximately 10 percent of its ModusLink position. In our view, such erratic trading is evidence of Peerless’ short-term objectives.

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