Charter of association of CFHC

General provisions

1 China Famous Hotels Corporation is a non-profit, voluntary community of common interest made up of multi star hotels as well as famous tourist enterprises in China 's main cities

2 CFHC has the aim of developing a common brand; mutual, beneficial cooperation, exploitation of common resource and mutual development. Our goal is to use the leverage of our combined resource to the advantage of all. We intend to pursue the interests of the whole while protecting member's individual interests.

3 CFHC takes direction from the market place according to the fundamental rules of supply and demand but intensely seeking to reform, develop and grow to become a national first-class hotel organization worthy of the international hospitality industry.

Member qualifications

4 Hotels of four and five-star rating registered in the territory of China, including Hong Kong, Macao and Taiwan with a secure home market who are seeking to extend that influence and popularity to the whole of China, who are in agreement with the published rules of the CFHC may apply for membership. Relevant tourism and travel enterprises may apply for membership as a cooperating partner.

5 Enterprises applying to join the organization whether hotels or tourism and travel related bodies must have the written recommendation of two or more current, full members of CFHC or: the provincial or city tourism administration or organization. The CFHC will then set a qualification examination and on site Quality Management Department investigation of the candidate. The report of this investigation will be joined to the application and put before the General Meeting of the membership for consideration and a vote to accept or reject the candidate as a full or cooperating member.

6 In order to protect and maintain the impact of the CFHC brand image and safeguard the rights and interests of the membership, a given city may have only one hotel or relevant enterprise as a CFHC member. A recommendation from the Central authority of municipality acting directly under the Central Government may decide to increase member units based on special circumstances. This recommendation must then receive the sanction of the Standing Council in order to take effect.

7 The organization maintains a membership qualification system which requires that every member must be confirmed annually by the Secretariat. Members who violate the published terms of organization will be warned and directed to rectify this conduct and make any necessary improvement in order to maintain membership. Those who seriously violate the organization's conditions of membership or fail to heed the warning as outlines will have their membership terminated forthwith. Biannually the CFHC carries on qualification checks on members. These checks may be with or without prior notice.

Member's rights and obligations

8 Member's rights

8.1 Have the non-transferable right to use uniform logo and insignia of this organization.

8.2 The right to participate in the CFHC annual meeting and to take part in promoting the development of this organization;

8.3 The right to participate in every special and theme activity of this organization and to share in the benefits of membership in the organization;

8.4 The right to share all the resources that this organization and its membership offer, including information, networking, marketing power, administrative skills, human resources, and purchasing power among others;

8.5 The right to participate in promotional activities, including joint marketing and advertisement and to share and receive support from the organization's public relations specialists;

8.6 Members have the freedom to withdraw from the organization, but are expected to make application to withdraw in writing to the Standing Council three months before the intended date. A written response will be issued by the Secretariat.

9 Member's obligations

9.1 Members are expected to conform to the rules and regulations of the organization and fulfill their own obligations as well as obeying and executing resolutions of the Director's Conference and the Standing Council;

9.2 Member hotels must join the CFHC Reservation Center and the rates listed with CFHC cannot be higher than those the member may list with other centralized reservation centers;

9.3 Member hotels must join the VIP club, and gather necessary customer information for recording at the Secretariat in accordance with the published requirements of the VIP club;

9.4 Members will, as agreed, annually make available free guest room nights to the reservation center, based pro rata on the member's annual income, as economic support for the development of the organization;

9.5 Members must safeguard the image and reputation of the organization, participate in the activities of the organization and share as well as utilize advantages with fellow members to enhance the development of the organization;

9.6 Member units are obliged to offer timely information to the organization and its membership on possible markets and business contacts;

9.7 Members are expected to accept the inspections of the organization at least once every two years and to make necessary adjustments or improvements recommended by the inspection report. Members who are unable to maintain the standards of the organization are expected to resign their membership or graciously comply with a request of the organization to withdraw.

Organization

10 This organization is comprised of a Director's Conference, Standing Council and the Secretariat.

11 The Director's Conference is made up of all member units and meets once every year. Its main duty is ① Review the memorandum of association, ② make and organize a development plan, ③ approve the final report, including the annual work plan and program, budget and member's recommendations. The Director's Conference is generally held each year after the Spring Festival holiday. Attendees are usually the general manager's of member organizations. Director's conference is filed an application by the member undertaking, is passed through discussion by director's conference. The special requirement can be decided by standing council.

12 The Standing Council is elected by the Director's Conference. The managing director serves a term of three years. Each Standing Council is responsible for the election of its successor.

13 The Standing Council elects a president and vice president. The Council meets at least once every year. The resolutions resulting from the Council's agenda are executed by the Director's Conference. Changes resulting from the election of the Standing Council do not change the composition of the Director's Conference.

14 The organization establishes a Secretariat to deal with management and administration of the organization and act as an executive body, responsible to the Standing Council. The location of the Secretariat is determined by the General Secretary and the demands of its work, but the location requires the approval of the Standing Council.

15 The Standing Council is divided into several professional committees. , the professional committee's director is served as by the vice chairman or the managing director.

16 The position of chairman is the highest post of this organization and as such is responsible for presiding over the Standing Council and the Director's Conference. The vice chairman assists the chairman in his duties and assumes other duties of the chair in the chairman's absence.

17 If the Chairman or Vice Chairman is unable to fulfill their duties for whatever reason, the Chairman must advise the Standing Council of proposed adjustments in schedule or a replacement. The Council must approve any such proposal.

18 The general secretary presides over the routine work of the Secretariat and acts as liaison with the Standing Council and Director's Conference. The Secretariat is responsible to the Standing Council.

19 The General Manager of the host unit will normally act as executive chairman of the Standing Council conference. While not a member of the Council per se, this person has the responsibility for arrangements to host the conference and may attend all sessions.

20 The Secretariat has subdivisions as follows: CFHC (Hong Kong) Management Company; CFHC VIP Club, Reservation Center , Marketing Department, The Qualification Exam and Quality Management Department; and the organization's professional committees.

21 Establish a Financial Oversight Committee to supervise and audit the accounting of CFHC. Members of this committee are selected by a vote of the Standing Council.

22 Use all resources to make CFHC a well known and respected brand in China and the world; safeguard the brand image using the strictest standards; cultivate the exchange of skills and knowledge with international hotels and serve as a positive role model in the development of the Chinese hotel industry.

23 Realize common development by supporting the brand; its talent and network. Work to develop more effective market strategies and promote the overall image of the organization in order to create benefit for members and reduce the cost of member's participation.

24 Promote linkage between members including the exchange of technology, information and products to increase effectiveness and reduce the expenditure of time and effort.

25 Create a discernible standard of excellence in service by making full use of advantages in talent, the exchange of professional resources and training, consultation on various specialties and by promoting the improvement of managerial skill in each member unit.

Annual fee

26 Every member pays an annual fee by making available free guest room nights to the reservation center to serve the interests of the organization. The range of revenue and expenditures is to be confirmed by the Standing Council based on the report of the Secretariat in its final report.

The annual fee is based on 50 thousand Yuan worth of room nights sold by each member using the rate offered by the member to the CFHC Reservation Center . The deadline for receipt of the fee is October 1 st annually. Non-hotel members pay an annual fee based on the published unit price for their offerings but, no less than that of member of par income. The deadline for payment is the same as that of hotel members.

Supplementary articles

27 Member units that fail to pay the annual fee or perform the duties incumbent on membership in the organization for one year will lose their member qualification.

28 Member units that are no longer in business or have had their star rating reduced by the Tourism Administration Service Division, should notify the Secretariat and voluntarily withdraw from this organization.

29 Member units that fail to execute the resolutions of the Director's Conference and the Standing Council or act in a way that is harmful to the interests of the organization or its members or other members will be expelled by the Standing Council .

30 Members whose qualification has been withdrawn or who have voluntarily resigned may not exercise the rights of member. Such misappropriation of benefits will face legal action.

31 This document was approved by the Director's Conference on June 3, 2004 , and have effect from that date. The Standing Council reserves the right of interpretation of the elements and rules contained herein.

June 3, 2004