Document:

CONSULTING
AGREEMENT

    

    This Consulting
Agreement (the “Agreement”) is made as of this June 7, 2010 (the “Effective Date”),
by and between Top Gear
Inc., (hereinafter the "Company") and Moshe Perl, with offices at 102
Sanhedria Murhevet St. Suite 8, Jerusalem, Israel (hereinafter called the
"Consultant").

    

    WITNESSES:

    

    WHEREAS, the Company is a
kosher certification company, and is interested in developing a kosher
manual  in order to be used as a study tool by field representatives
of the Company primarily in the United States;

    

    WHEREAS, Consultant is a
“mashgiach” in the area of kashrut and jewish dietary laws and has extensive
knowledge and experience in the field;

    

    WHEREAS, the Company desires
to enter into an Consulting Agreement with Consultant, and Consulant desires to
act as a consultant to the Company on the terms and conditions set forth
herein.

    

    NOW THEREFORE, in
consideration of the premises and of the mutual covenants and conditions herein
contained, the parties hereto agree as follows:

    

    1.           Term.  The  Company  hereby  retains
Consultant  to  perform  consulting  services,
including assisting the Company in developing its Kosher Instruction Manual to
be used by sales representatives of the Company, as well as to assist in
oversight of the kosher certification process via internet and other forms of
communication from time to time, for a term  commencing  on
the  date  hereof  and  terminating  one
year from the Effective Date. This Agreement may be extended on a
yearly basis upon the Parties mutual written consent.  Consultant
hereby accepts such retention.

    

    2.  Remuneration.

    

    2.1          The
Company shall pay to Consultant the following:

    

    (a)           Five
thousand dollars ($5,000) for the preparation of a comprehensive Kosher
Instruction Manual  which will include a detailed step by step process
on explaining the jewish dietary laws as well as a operational plan for making a
place “kosher.”  Consultant shall first prepare an outline of the
manual for approval by the Company.  After the Company approves the
outline, the Consultant shall prepare the comprehensive manual.  In
the event that after prepared of the outline the Company decides not to proceed
with the preparation of the Kosher Instruction Manual, then the Company will pay
the Consultant the amount of $500.00 for the preparation of the outline of the
manual.

    

    (b)           Payment
for additional tasks such as the preparation of additional business plans shall
be agreed to in writing by the Company and Consultant, and shall be attached to
this Agreement to form an integral part hereof. The cost of such tasks will be
pre-approved in writing by the Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2. The
Company will reimburse the Consultant for reasonable travel expenses for travel
pre-approved in writing by the Company, including (i) coach air travel (ii)
lodging, and (iii) a per diem of $200 per day, including the day of travel and
the day of return.  All flights to the USA shall be coordinated,
scheduled and approved in writing in advance by the Company.  Travel
expenses will be reimbursed within 10 days of completion of travel, or in such
other manner as shall be agreed to in writing by the Company and
Consultant.

    

    2.3         In
the event that the Company business proves a success and the Company is
interested in retaining the services of the Consultant for further assistance
with  the Companies operating plan then then the Parties will agree in
writing on the remuneration method on a per case basis.

    

    3.           Business Expenses.. The
Company shall reimburse Consultant for all pre-approved, reasonable and proper
business expenses incurred by the Consultant, including  disbursements
made in the performance of his duties to the Company. Prior to incurring
any expenses and/or disbursements,  the Consultant shall obtain the prior
written approval of the Chief Executive Officer or the Board of Directors of the
Company.

    

    4.           Confidentiality.         All written, electronic or oral
proprietary or confidential information provided by the Company to the
Consultant in furtherance of this Agreement or in order for the Consultant to
perform his obligations hereunder, including, without limitation, identities of
any pending or future vendors or planned products or services to be offered;
customer information; planned and future promotions; business plans and
forecasts; the terms of this Agreement, or any other information to which a
party became privy in the course of the performance of this Agreement, shall be
confidential and proprietary information or trade secrets of the
Company.  In addition, all deliverables, including the Kosher
Instruction Manual, shall be deemed confidential information of the
Company.  The Consultant shall not make any unauthorized use of the
Company’s confidential information, nor disclose, reproduce or otherwise make
available such confidential information to any third party.  The
Consultant agrees to exercise all due care and take all reasonable precautions
to prevent any use or disclosure of any of the Company’s confidential
information in violation of this Agreement.

    

    5.           Non-Competition.  Consultant  agrees
that  during  the  term  of  this
Agreement , and continuing for a period of 1 years
thereafter,  Consultant will not directly
or  indirectly  enter  into
or  remain  in the  employ  of
any  person,  firm or corporation,  or provide
services to, or engage in or have a financial interest in any business which is
then directly or  indirectly  competitive  to the
business of the Company in the United States.  In the event of a
breach of this covenant not to compete, the parties acknowledge that the Company
may be irreparably damaged and may not have an adequate remedy at
law.  The Company may therefore obtain injunctive relief, without the
necessity of posting a bond, for any breach or threatened reach of this
covenant.  The parties hereto further acknowledge that this covenant
not to compete is intended to conform to the laws of both the State of Israel
and the United States, and a court of competent jurisdiction is hereby
authorized to expand or contract the restrictions of this covenant not to
compete in order to conform it with the said laws so that it shall bind the
parties hereto.  This Section 5 shall survive termination of this
Agreement.

    

    The
Parties have entered into a Non-Compete and Non-Circumvent Agreement which is
attached hereto as Annex B.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    6.           Ownership of Work
Product.         The Company
shall own all right, title, and interest (including copyrights, trade secret
rights, and all other intellectual  property rights of any sort
throughout the world) in and to any and all deliverables, works of authorship,
designs, know-how, ideas and information made or conceived or reduced to
practice, in whole or in part, by the Consultant during the term of this
Agreement that relate to the subject matter of, or arise out of, the services
being performed for the Company, including the outline and the Kosher
Instruction Manual (collectively, the “Work Product”).  All Work
Product is work made for hire owned by the Company to the extent allowed by law,
and, in addition, the Consultant hereby makes all assignments necessary to vest
ownership of the Work Product in the Company.  The Consultant shall
further assist Company, at Company’s expense, to further evidence, record and
perfect such assignments, and to perfect, obtain, maintain, enforce, and defend
any rights assigned.  The Consultant hereby irrevocably designates and
appoints Company as its agents and attorneys-in-fact, coupled with an interest,
to act for and in the Consultant’s behalf to execute and file any document and
to do all other lawfully permitted acts to further the foregoing with the same
legal force and effect as if executed by the Consultant.

    

    7.           Termination.  Consultant's
agreement hereunder may be terminated by the Company on thirty days prior
written notice for a material breach of this Agreement or immediately in the
event of a material breach of Section 5 of this Agreement.

       

    8.           Limitation
of Liability

    

    8.1           Neither
party shall be liable hereunder for any indirect, special, or consequential
losses or damages of any kind or nature whatsoever, including lost profits,
regardless of whether arising from breach of contract, warranty, tort, strict
liability or otherwise, even if advised of the possibility of such loss or
damage, or if such loss or damage could have been reasonably
foreseen.

    

    8.2           IN
NO EVENT SHALL COMPANY BE LIABLE TO THE CONSULTANT FOR ANY CLAIM OR CLAIMS
ARISING OUT OF THIS AGREEMENT IN AN AMOUNT EXCEEDING THE TOTAL MONETARY
OBLIGATION OF COMPANY TO THE CONSULTANT REMAINING UNDER THIS AGREEMENT FROM TIME
TO TIME.

    

    9.           Relationship
of the Parties.

    

    9.1           Notwithstanding
any provision hereof, the Consultant is an independent contractor and not an
employee or agent of Company, and shall not bind nor attempt to bind Company to
any contract.  The Consultant shall accept any directions issued by
Company pertaining to the goals to be attained and the results to be achieved
but shall be solely responsible for the manner and hours in which Services are
performed under this Agreement.  The Consultant shall not be eligible
to participate in any of Company’s employee benefit plans, fringe benefit
programs, group insurance arrangements or similar programs.  The
Consultant shall comply at the Consultant’s expense with all applicable laws,
regulations and codes required to be fulfilled by independent
contractors.  The Consultant agrees to indemnify Company from any and
all claims, damages, liability, settlement, attorneys’ fees and expenses, as
incurred, on account of the foregoing.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    9.2           The
Parties agree that should any competent judicial authority hold that the
relationship between the Consultant, and Company in respect of the services
provided pursuant to this Agreement is one of employer and employee, then
retroactively from the commencement of this Agreement, and in lieu of any
monthly consulting fee, the Consultant shall be deemed to have been entitled
only to a gross monthly salary (including for all over-time hours, if relevant)
in an amount equal to 70% of the actual monthly consulting fee paid to him, and
all excess amounts shall be repaid to Company together with interest at the
applicable rate.  All amounts paid or payable to the Consultant will be
subject to withholding in accordance with applicable law.

    10.          Notices.  Notice is
to be given hereunder to the parties by telegram or by certified or registered
mail, addressed to the respective parties at the addresses hereinbelow set forth
or to such addresses as may be hereinafter furnished, in writing:

    

                 To:     __________________________

    

                 To:     _____________________________

    

    11.          Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Unless clearly
inapplicable, reference herein to the Company shall be deemed to include such
other successor.  In addition, this Agreement shall be binding upon
and inure to the benefit of the Consultant and his heirs, executors, legal
representatives and assigns, provided, however, that the obligations of
Consultant hereunder may not be delegated without the prior written approval of
the Board of Directors of the Company.

    

    12.         Amendments.  This
Agreement may not be altered, modified, amended or Terminated except by a
written instrument signed by each of the parties hereto.

    

    13.         Governing Law. This Agreement
is entered into and shall be governed by and construed in accordance with the
laws of the State of New York.

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.

    

    
      
        	
                TopGear
      Inc.

              	 
      	
                Consultant

              
	 
      	 
      	 
      	 
      
	
                /s/ Omri Amos Shalom

              	 
      	
                /s/ Moshe Perl

              
	
                By:

              	
                Omri
      Amos Shalom

              	 
      	
                By:
      Moshe Perl

              
	
                Title:

              	
                President

              	 
      	
                Title:

              

      

    

     

    
      
         

      

      
        4Magal
Receives a Letter of Support from its Principal Shareholder

    

    Natie
Kirsh Offers a $5 Million Bridge Financing in Anticipation of Proposed Rights
Offering;

    Loan
Contingent on Maintaining Current Board and Chairman

    

    YEHUD, Israel - July 12, 2010 - Magal
Security Systems Ltd. (NASDAQ GM: MAGS; TASE: MAGS), disclosed today that
it has received a letter from its principal shareholder, Mr. Natie Kirsh, in
which he notified Magal that he has sent a letter to the shareholders of the
Company in which he has indicated unequivocal support for the Company’s current
Board of Directors and Chairman.  The letter also states that Mr.
Kirsh is against the current initiative of certain shareholders to elect a new
Board of Directors and Chairman.  In his letter, Mr. Kirsch confirms
his support for a proposed rights offering that will provide the Company with
additional capital and will enable management to fully implement its recently
announced strategic plan.  Mr. Kirsh also advised that he has offered
to extend a bridge loan of $5 million in anticipation of such offering,
contingent on the current Board of Directors remaining in place.

    

    The full
text of Mr. Kirsh’s letter follows:

    

    “In the
light of the attempt by Mr. Yoav Stern and certain shareholders to
initiate a change in the composition of the Board of Directors, I write to you
as a fellow shareholder to provide some background and to share with you my
views on the company’s present situation.

    

    “About 30
years ago I acquired a majority interest in the company, purchasing 74% of the
outstanding shares from Israel Aircraft Industries.

    

    “I
immediately invited Mr. Kobi Even Ezra, a well regarded Israeli businessman to
become both the Chairman and a significant shareholder, and under Kobi’s
stewardship the Company went public. On reaching the age of 75, Kobi decided to
step down as Chairman of the Board and Mr. Jacob Perry took on this
role.

    

    “It was and remains my view that Mr.
Perry is ideally suited to fill this role and I have given him every
encouragement to introduce new ideas and energy to the
Company.

    

    “Following
the departure of Mr. Izhar Dekel as CEO, Mr. Perry recruited Mr. Stern and,
initially, all the Board members were impressed with his enthusiasm and energy.
However, after a trial period, it was generally felt that based on his
managerial style it would not be in the Company’s best interests to make his
appointment permanent.

    

    “Mr.
Eitan Livneh was then recruited and since his arrival in August 2009 the Company
and the management team have stabilised.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “These
management changes coupled with the worldwide economic downturn created
considerable challenges for the company, exacerbated by the unbecoming attempt
by Mr. Stern to create dissention and undermine management, including
approaching me and all major shareholders with negative comments about Mr.
Perry, the management and the Board, and calling for the replacement of Mr.
Perry as Chairman as well as four of the current standing
directors.

    

    “While
the Company’s immediate business prospects are difficult, I am satisfied that
Mr. Perry and his management team are exerting their best efforts to overcome
these difficulties. Despite the continued economic crisis in Europe and
elsewhere, which has had a severe impact on these efforts, they will, given
time, succeed.

    

    “The
Company is currently participating in several tenders and bidding processes that
I hope will be fruitful. The Company has adopted a new strategic plan that
allocates proper emphasis to the development of new products on the one hand and
the participation in projects, on the other. This strategic plan completely
replaces the plan that was developed by Mr. Stern which was found to be
unsuitable for the Company. In addition, during the last few months the Company
initiated, for the second time since mid-2009, a restructuring program designed
to further streamline the organisation and reduce operating costs.

    

    “Following
the request from a group of shareholders, an extraordinary general meeting has
been convened to consider the demand for the appointment of a new Board of
Directors to replace the current Board, other than myself and the external
directors appointed under Israeli law.

    

    “I urge you not to support the
proposal, and to give Mr. Perry and his team the opportunity to bring Magal back
to profitability which I am confident that they will achieve.

    

    “Magal’s
reputation as a worldwide leader in perimeter security is well known and now is
not the time to create further distractions for management.

    

    “Despite
the recently reported disappointing operating results, Magal has considerable
potential and enjoys an excellent reputation worldwide – well beyond what it has
achieved financially for its shareholders.

    

    “To allow
the required recovery to be achieved without undue stress, it is my belief that
the Company requires additional capital and that given the present depressed
share price, this should best be done by way of a rights issue. Details of such
rights issue have been sent to all shareholders and the proposal will be on the
agenda at the EGM.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “I fully
support this initiative and I have notified the Company that I intend to fully
exercise the oversubscription right in the framework of such rights
offering.  In addition, provided that the current Board will continue
to direct the operations of Magal, I will provide the Company with a $5 million
bridge loan, the proceeds of which will be applied against the payment for the
shares that will be purchased by me pursuant to the rights offer.”

    

    This
press release does not constitute an offer to sell or the solicitation of offers
to buy any securities of Magal Security Systems Ltd. and shall not constitute an
offer, solicitation or sale of any security in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.

    

    About
Magal S3:

    Magal S3
is a leading international provider of security, safety and site management
solutions and products (NASDAQ: MAGS).  Over the past 40 years, Magal
S3 has delivered tailor-made solutions to hundreds of satisfied customers in
over 80 countries.

    

    Magal S3
offers a broad portfolio of unique products used to protect sensitive
installations in some of the world’s most demanding locations and harshest
climates. This portfolio covers the following categories:

    Perimeter
Intrusion Detection Systems (PIDS) - a variety of smart barriers and fences,
fence mounted detectors, virtual gates, buried and concealed detection
systems

    Close
Circuit TV (CCTV) – comprehensive management platforms with a leading
Intelligent Video Analysis (IVA) and Video Motion Detection (VMD)
engine

    Physical
Security Information Management (PSIM) - a proprietary site management system
that enhances command, control and decision making during both - routine
operations and crisis situations

    

    This
press release contains forward-looking statements, which are subject to risks
and uncertainties. Such statements are based on assumptions and expectations
which may not be realized and are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. Future events and actual results, financial and otherwise, may
differ from the results discussed in the forward-looking statements. A number of
these risks and other factors that might cause differences, some of which could
be material, along with additional discussion of forward-looking statements, are
set forth in the Company's Annual Report on Form 20-F filed with the Securities
and Exchange Commission.

     

    
      
        	
                Magal S3

              	
                Financial
      Communication Public & Investor

                Relations

              
	
                Eitan
      Livneh, President & CEO

              	
                Hadas
      Friedman

              
	
                Tel:
      +972-3-539-1444

              	
                Tel:
      +972-3-695-4333 Ext. 6

              
	
                Fax:
      +972-3-536-6245

              	
                E-mail:
      hadas@fincom.co.il

              
	
                Assistant:
      Ms. Elisheva
      Almog

              	
                Mobile:
      +972-54-230-3100

              
	
                E-mail:
      ElishevA@magal-s3.com

              	 
      

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    N
KIRSH

    Suite
A, 204 Finchley Road

    (at
rear of AIB Bank)

    London
NW3 6BX

    Tel:  +44
20 7644 9220  Fax: +44 207 435 9621

    

    Email: natie@parway.co.uk

    
       

        

      
  

    5 July
2010

     

    Dear
Sirs

     

    Re:
Magal Security Systems

     

    In the
light of the attempt by Mr. Yoav Stern and certain shareholders to
initiate a change in the composition of the Board of Directors, I write to you
as a fellow shareholder to provide some background and to share with you my
views on the company’s present situation.

     

    About 30
years ago I acquired a majority interest in the company, purchasing 74% of the
outstanding shares from Israel Aircraft Industries.

     

    I
immediately invited Mr. Kobi Even Ezra, a well regarded Israeli businessman to
become both the Chairman and a significant shareholder, and under Kobi’s
stewardship the Company went public. On reaching the age of 75, Kobi decided to
step down as Chairman of the Board and Mr. Jacob Perry took on this
role.

     

    It was and remains my view that Mr.
Perry is ideally suited to fill this role and I have given him every
encouragement to introduce new ideas and energy to the
Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Following
the departure of Mr. Izhar Dekel as CEO, Mr. Perry recruited Mr. Stern and,
initially, all the Board members were impressed with his enthusiasm and energy.
However, after a trial period, it was generally felt that based on his
managerial style it would not be in the Company’s best interests to make his
appointment permanent.

     

    Mr. Eitan
Livneh was then recruited and since his arrival in August 2009 the Company and
the management team have stabilised.

     

    These
management changes coupled with the worldwide economic downturn created
considerable challenges for the company, exacerbated by the unbecoming attempt
by Mr. Stern to create dissention and undermine management, including
approaching me and all major shareholders with negative comments about Mr.
Perry, the management and the Board, and calling for the replacement of Mr.
Perry as Chairman as well as four of the current standing
directors.

     

    While the
Company’s immediate business prospects are difficult, I am satisfied that Mr.
Perry and his management team are exerting their best efforts to overcome these
difficulties. Despite the continued economic crisis in Europe and elsewhere,
which has had a severe impact on these efforts, they will, given time,
succeed.

     

    The
Company is currently participating in several tenders and bidding processes that
I hope will be fruitful. The Company has adopted a new strategic plan that
allocates proper emphasis to the development of new products on the one hand and
the participation in projects, on the other. This strategic plan completely
replaces the plan that was developed by Mr. Stern which was found to be
unsuitable for the Company. In addition, during the last few months the Company
initiated, for the second time since mid-2009, a restructuring program designed
to further streamline the organisation and reduce operating costs.

     

    Following
the request from a group of shareholders, an extraordinary general meeting has
been convened to consider the demand for the appointment of a new Board of
Directors to replace the current Board, other than myself and the external
directors appointed under Israeli law.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    I urge you not to support the
proposal, and to give Mr. Perry and his team the opportunity to bring Magal back
to profitability which I am confident that they will achieve.

     

    Magal’s
reputation as a worldwide leader in perimeter security is well known and now is
not the time to create further distractions for management.

     

    Despite
the recently reported disappointing operating results, Magal has considerable
potential and enjoys an excellent reputation worldwide – well beyond what it has
achieved financially for its shareholders.

     

    To allow
the required recovery to be achieved without undue stress, it is my belief that
the Company requires additional capital and that given the present depressed
share price, this should best be done by way of a rights issue. Details of such
rights issue have been sent to all shareholders and the proposal will be on the
agenda at the EGM.

     

    I fully
support this initiative and I have notified the Company that I intend to fully
exercise the oversubscription right in the framework of such rights
offering.  In addition, provided that the current Board will continue
to direct the operations of Magal, I will provide the Company with a $5 million
bridge loan, the proceeds of which will be applied against the payment for the
shares that will be purchased by me pursuant to the rights offer.

     

    Should
you wish to discuss your thoughts on Magal, please feel free to contact me on
natie@parway.co.uk or Mr. Perry on JacobP@magal-s3.com.

     

    Yours
sincerely

     

    CC: J.
Perry, Chairman

     

    Magal
Security Systems Ltd

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