Risks

Description of Risks
The risks normally faced by educational institutions including the Online School include:

1. PARTIAL OR TOTAL MANAGEMENT TAKE OVER: Management take over by

corrupt officers of an organization occurs when an influential group partially or total-
ly takes hold of the records and operations of the organization.

2. GOVERNMENT-SANCTIONED SHUTDOWN OF OPERATIONS: Government-

sanctioned shutdown of operations of an organization occurs when the organization
fails to observe pertinent laws, rules, and regulations of concerned government agen-
cies during the conduct of its operations, or when it performs acts or omissions that
are contrary to law.

3. LOSSES DUE TO COMPETITION: Losses due to competition occur when an or-

ganization losses its leading edge to its competitors due to its failure to enhance its
products and services, and due to its failure to take good care of its customers, its
good image, and public relations.

4. LOSSES DUE TO CALAMITIES: Losses due to calamities occur when an organi-

zation suffers physical losses resulting from calamities.

5. LOSSES DUE TO MISMANAGEMENT: Losses due to mismanagement occur

when the officers of an organization misappropriate its funds, fail to take good care
of its finances, fail to meet its obligations, fail to maximize its profits and/or to mini-
mize its costs.

Contingency Plans
The Online School like any other business entity has laid out contingency plans to ward off the
effects of risks should they come anytime during its period of operations. These contingency plans in-
clude:

1. MANAGEMENT CONTROL: The Online School will ensure that:

a. The ownership of the Online School Website can neither be sold, assigned,
or transferred by any person, juridical or natural, nor can they allow any nat-
ural or juridical person to modify the Website as circumstances demand. The
Website will contain functions aimed at protecting itself against software pi-
racy, reverse-engineering, cracking, and unauthorized use. Any acts of pira-
cy, reverse-engineering, cracking, and unauthorized use or duplication of the
website, its programs, and its files will render the Online School and its
Board of Directors innocent of such acts, thus, exempting them from liabili-
ties caused by the same unless proven otherwise;

b. The maximum amount that can be invested by all Investors of the corpora-
tion must be equal to forty percent (40%) of its authorized capital stock for
purposes of registration, program and website development and maintenance,
and the construction and/or maintenance of its offline facilities, and that this
percentage will be maintained for as long as the Online School exists, or as
provided for by law. This provision will ensure that no person or persons can
sell any property that belongs to the Online School without incurring civil
and criminal liability;

c. The compliance of the total required investment or any amount lower than
that, as needed by the Online School and as enforced by concerned govern-

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 ment agencies, will earn the Investors the right to fifty percent (50%) of the
collections of the Online School, less the itemized amounts mentioned earlier
in this document to be confirmed and strictly enforced by subsequent Inves-
tors, the said percentage of the collections to be divided among them prorata
monthly based on the number of their shares in the Online School, and re-
leased on the second day of each succeeding month; will earn them the right
to secure a copy of the financial statements that will be generated by the
Website on the second day of each succeeding month once its Accounting
modules are fully operational; and will earn them the right to sit as a Member
of the Board of Directors of the Online School as enforced by its Articles of
Incorporation and By-Laws;

d. All Investors will be fully informed of this Agreement between the Project
Proponent and the Investors thru a Memorandum of Agreement that will be
entered into between them, and a copy of the Acknowledgement Receipt will
be issued by the Project Proponent upon receipt of the amount initially in-
vested by each of the said Investors to the Online School for Website Devel-
opment, Maintenance, Hosting, Registration, Operation, Marketing, and
Promotional purposes;

e. A person will be treated by the Website as its Student only upon receipt of
the Website Maintenance Department of thirty percent (30%) of the Subject
Fee less the itemized deductions given earlier in this document paid by that
person, giving the Website the right to deny service to that person prior to the
compliance of this provision, or to all the clients of the corporation for its
failure to comply with this provision for three (3) consecutive times;

f. The President, Secretary, and Treasurer of the Board of Directors of the

Online School, and will act as signatories to the Bank Accounts of the Cor-
poration;

g. Any violation of these provisions, of existing laws, or any illegal act done by
a Director or by Directors that may cause damage to another Director or Di-
rectors or to the Corporation at present or in the future, will give the ag-
grieved Director or Directors or the Corporation the right to be indemnified
by an amount equivalent to the cost of the damage caused to the agrieved Di-
rector or by Directors, plus damages amounting to fifty percent (50%) of the
income that accrued to the benefit of the guilty Director or by Directors for
the current year as damages, after the violation has been determined by a
court of competent jurisdiction – all releases of the earnings of the guilty Di-
rector or by Directors will be withheld prior to the payment of such damages;

h. Shares of the guilty Director or by Directors may not be assigned, sold, or

transfered while the guilty Director or by Directors is or are in the act of pay-
ing for the damages caused to the agrieved Director or Directors or to the
Corporation; and if such shares are sold prior to the detection of the offense
while the investigation for the offense is in process, the Online School will
nullify such sale, and the benefits of the said shares will accrue to the benefit
of the agrieved Director or by Directors once such offense and the damages
for the same has been properly determined;

i. All stockholders may only retain, sell, assign, or transfer their individual
shares of stock in accordance with the Corporation Code of the Philippines;
and

j. All legal disputes will be decided upon by the courts of competent jurisdic-
tion in Quezon City, Philippines.

k. All cases involving bonafide personnel will be judged by the National Labor
Relations Commission of the NLRC, and all other cases will be judged by
the concerned government agencies of competent jurisdiction.

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 The purpose of the above-mentioned provisions is to ensure the smooth implementa-
tion and monitoring of the project’s rules, regulations, and guidelines, and to be able
to hold corrupt or guilty Directors and Personnel legally liable for any attempt to
damage and/or to take over the project or against any of its directors or personnel.

2. LEGAL CORPORATE ACTIVITIES: The management of the Online School will

fully observe all laws, rules, and regulations pertinent to its operations, and will con-
fine itself only to legal activities. It will obtain all permits from concerned govern-
ment agencies prior to the performance of any operation, to ensure the legality of its
operations, thereby eliminating the need to resort to bribery and other corrupt practic-
es.

3. CONTINUOUS IMPROVEMENT OF PRODUCTS AND SERVICES: The Website

Maintenance Department will be responsible for the continuous improvement of the
Website and all of its software, always considering QUALITY, QUANTITY and
SPIRIT OF SERVICE as its guiding principles.

4. CONTINUOUS COOPERATION WITH THE PUBLIC: The management of the

Online School will ensure the continuous and harmonious cooperation and communi-
cation with the public and the Website Maintenance Team concerning the swift and
secure delivery of its educational, traditional, livelihood and socio-economic pro-
grams, and charitable projects for their mutual benefit.

5. CONTINGENCY FUNDS: The management of the Online School and the Project
Proponent will continuously set aside an amount representing five percent (5%) of all
monthly collections from Registration and Subject Fees in the form of Retained Earn-
ings to ensure the continuous increase in the book value of the capital stock of the
Online School, and ten percent (10%) of all monthly collections from Registration
and Subject Fees as salaries of the members of the Board of Directors of the Online
School. Both deductions shall be taken from the Registration Fees collected from
Students.

6. NO TO MISMANAGEMENT: The Website will maintain transparency, honesty,

and integrity in monitoring and reporting the financial affairs of the school and all its
allied businesses. Interested Investors, Members, Advertisers, Students, the Project
Proponent, and concerned government agencies may conduct accounting and opera-
tions audit to contain the effects of mismanagement, and to ensure smooth the opera-
tions of the Online School, during legal office hours.

7. PREMIUM PAYMENTS: The Website will automatically deduct from its Monthly
Collections from Registration and/or Subject Fees all amounts that will be used for
the payment of Taxes and other premiums to ensure the timely payment of the same,
the payment of which will be subject to the requirements of the government agency
where such tax or premium is due.

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