1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Facts of recognition

On August 9, 2016, the Plaintiff and C entered into a contract with the Defendant for transfer of management rights (hereinafter “instant contract”) with the effect that “the Plaintiff and C (hereinafter “D”) transfer the management rights to the Defendant.” On August 18, 2016, the Plaintiff resigned from D representative director.

The main contents of the above contract are as follows:

Article 2 (Basic Guide of this Transaction) (1) This transaction is subject to the pre-determination of Section 2 of this Agreement to issue new shares for consideration to D under a third party allocation method, and is to be implemented in the manner that will become the largest shareholder by acquiring the new shares in full by the Defendant. 2) Prior to the issuance and acceptance of the new shares under paragraph 1 of this Article, the Plaintiff and C will convert the amount of provisional payment to D in accordance with Article 3 of this Agreement.

3) This transaction guarantees the Plaintiff’s right to preferential purchase of D’s entire shares after the conversion of shares into investments under paragraph (2) of this Article by the Plaintiff after six months, and its purchase amount is KRW 250 million. As of July 31, 2016, the Plaintiff, based on the financial statements of Article 3 (Plaintiff and C’s conversion of shares) D, has a provisional deposit of KRW 170 million in D, and the Defendant’s acquisition of new shares by the transfer of shares, shall be converted into D in full in accordance with relevant laws and regulations.

2) At the time of debt-to-equity swap, D will acquire 1700 shares of registered common shares with par value at KRW 10,000,000. D will issue new shares under the following conditions:

(1) Amount of issued stocks: 40 million won. (2) The issue value per share shall be 10,000 won per par value. (4) The issuance date of new stocks and payment per share: The date when the plaintiff and C have completed the preparation for the implementation of legal procedures, and it shall be within two weeks from the date of conclusion of this contract.

At the time of the Plaintiff’s employment as the representative director prior to the conclusion of the instant contract, the Plaintiff’s obligations for loans to the Bank, the Small & Medium Business Corporation, and the Corporate Bank.