2. The costs of appeal shall be borne by the Defendant.

Purport of claim and appeal

1..

A. The Defendant is a company that manufactures gold-type, and the Plaintiffs are the companies that lend the manufacturing equipment and factory owned by the Defendant (hereinafter “instant factory”) to manufacture gold-type parts and deliver them to the Defendant.

B. On December 1, 2014 and January 1, 2015, Plaintiff A and Plaintiff B and Plaintiff C respectively entered into an agreement with the Defendant on July 1, 2016, under which the Plaintiffs manufactured and supplied gold-type parts to the Defendant according to the Defendant’s order (hereinafter “instant subcontract agreement”), respectively.

Of the contents of the instant subcontract, the parts related to the instant case are as follows.

Article 21 (Purchase of Contract Materials) (1) B (Plaintiffs) shall purchase the raw materials, subsidiary materials, semi-finished goods, ex officio processing, etc. (hereinafter referred to as “contract materials”) necessary for manufacturing the goods ordered by Gap (Defendants) to Eul from the enterprises designated by Gap.

Provided, That where Party A does not designate an enterprise, Party B may determine it by himself/herself.

In such cases, B shall be supplied with materials suitable for the drawings or specifications required by A, or for the specifications of materials, shapes, sizes, and other specifications.

(3) The order, storage, receipt and payment of the contract materials, and the settlement of payments, shall be implemented, and the ownership of the contract materials shall be held, respectively.

Article 22 (Payment of Urgency) (1) A may pay to B materials, parts, semi-finished goods, products, etc. to be used in manufacturing an object (hereinafter referred to as "emergency materials") in consultation with B, where the quality, improvement, productivity and safety level of the object, observance of relevant Acts and subordinate statutes, or other justifiable grounds exist.

(2) A and B shall be determined by mutual consultation on the classification of dead-end materials, free of charge, and where a dead-end materials are paid at a cost, A shall be determined by mutual consultation with B.

(3) A and B shall determine the date, time, place, method of payment of private capital, etc. through mutual consultation.

(9) Items of private sector materials shall be classified.