Via Email May 22, 2007 Mr. William R. McLennan c/o ModusLink PTE LTD

Exhibit 99.1

Via Email

May 22, 2007

Xx. Xxxxxxx X. XxXxxxxx

c/o ModusLink PTE LTD

00 Xxx Xxxxxx 0

Singapore 408858

Dear Xxxx:

This letter confirms our mutual understanding that effective June 1, 2007, ModusLink Corporation will increase your monthly housing fee and utilities as provided for in the Letter of Understanding – Expatriate Assignment (the “Expatriate Agreement”) dated March 10, 2005, from a maximum of 16,000 Singapore dollars per month to a maximum of 22,000 Singapore dollars per month, due to the increase in your rent. Your monthly contribution will continue to be 3,486 USD per month.

Except as indicated hereby, in all other respects your Expatriate Agreement shall remain unmodified and in full force and effect.

Sincerely,

/s/ Xxxxxx X. Xxxxxx

Xxxxxx X. Xxxxxx

President and Chief Executive Officer

Agreed and Acknowledged:

/s/ Xxxxxxx X. XxXxxxxx

Xxxxxxx X. XxXxxxxx