Lease Agreement of Nanyang Base Assets

Lease Agreement of Nanyang Base Assets

This agreement was entered into in Guangzhou between parties as follows on 24 January 2013:

Party A: China Southern Air Holding Company (the “Lessor”)

At:

Legal representative:

Party B: China Southern Airlines Company Limited (the “Lessee”)

At:

Legal representative:

Whereas, there are development needs of Party B, the parties hereto agree, after amicable consultations, on matters relating to leasing of properties of Party A to Party B as follows:

Clause 1 Commitments

1. Party A is a validly existing Chinese company licensed by administrative department of business administration authorities under related requirements of laws and regulations of China and the obligation of annual inspection has been performed in compliance with related requirements.

2. Party A lawfully owns the complete legal title of the properties as listed in the annex hereto.

3. Party B is a validly existing Chinese company licensed by administrative department of business administration authorities under related requirements of laws and regulations of China and the obligation of annual inspection has been performed in compliance with related requirements.

Clause 2 Leasing properties

Party B shall lease from Party A properties as listed in the annex hereto where rentals thereof shall be determined by the parties hereto under a equitable and fair principle not higher than average rental in the same area and lot.

Clause 3 Term of this agreement

The parties hereto agree that term of the leasing be one year commencing from 1 January 2012 and ending on 31 December 2012 where upon expiry such parties may determine on termination or renewal thereof according to actual situations.

1

Clause 4 Rights and obligations

(I) Rights and obligations of Party A

1. The rentals shall be collected in accordance herewith where invoice thereof shall be issued within 15 business days from the date on which rental to be paid by Party B become due;

2. The leasing properties shall be delivered to Party B for its use in a timely manner as stipulated hereunder;

3. Periodic safety inspection of and repair expenses arising from ordinary wear and tear of main structures of the properties as listed in the annex hereto shall be borne by Party A; and

4. Property tax and land use tax on properties as listed in the annex hereto shall be borne by Party A.

(II) Rights and obligations of Party B

1. The rentals shall be paid in a timely manner to Party A in accordance herewith quarterly where one-fourth of rentals of the year shall be paid by Party B before the 15^th date of the first month of every quarter.

2. Utilities and other expenses related to property management occurring during the term hereof shall be borne by Party B;

3. Party B shall submit declaration of and pay on behalf of Party A property tax and land use tax in accordance with related requirements of local tax authorities which shall be borne and reimbursed by Party A to Party B, settled quarterly and annually respectively, within 15 business days from provision of original of tax payment proof and an asset list included in tax returns; and

4. Such properties, including their ancillary facilities, shall be utilized strictly as use thereof with care and ordinarily and no dangerous materials such as inflammable and explosive articles shall be illegally placed within such properties.

Clause 5 Transaction cap

The parties hereto agree that rental of 2012 shall be RMB12,441,306, details of which are described in the annex hereto.

2

Clause 6 Force majeure

1. Where the parties hereto become unable to perform this agreement due to force majeure, such parties are not liable to such non-performance and this agreement shall be terminated automatically. Where any part hereof become unable to be performed due to the same, obligations under such part on the party to whom the same occurs shall be exempted according to effect of the same, provided that such other part as not affected thereby shall be performed and that no liability of default prior to occurrence of the same shall be exempted.

Force majeure represents objective situations impossible to be foreseen, avoided or overcome, including, without limitation, wars, epidemics, strikes, earthquakes and floods.

2. Any party unable to perform this agreement due to force majeure shall inform the other party in a timely manner within 48 hours therefrom in order to minimize loss to such other party and provide proof thereof within 15 business days, provided that such time limits may be extended according to actual situations if such party fails to do so with reasonable explanation.

Clause 7 Settlement of disputes

Any dispute arising from entering into or performing this agreement shall be resolved through amicable consultation between the parties hereto and, if cannot be so resolved, may be brought by any party to the People’s court with jurisdiction.

Clause 8 Miscellaneous

(I) This agreement shall be effective from the date of execution;

(II) Any matter not mentioned herein shall be stipulated in a separate supplemental agreement which shall have the same effect hereas; and

(III) This agreement is of six copies of the same effect, each party shall hold three of which.

[seal]	[seal]
Party A: China Southern Air Holding Company	Party B: China Southern Airlines Company Limited
Legal representative: [s.d.]	Legal representative: [s.d.]

3

Rent summary (Nanyang)

Rent (dollar)
Location		Land		Properties		Buildings		Total
Nanyang (Rent of January to September)		2,712,150		453,380		1,710,984		4,876,514
Location		Land		Properties		Buildings		Total
Nanyang (Rent of October to December)		6,250,655		111,030		1,203,107		7,564,792
Total (Rent of 2012)								12,441,306

4

Breakdown of land rent (January to September)

No.		Name of Land Parcel		Lease area (m2)				Base rent (yuan)				Rent total of January to September
Nanyang								3,280,000				2,712,150
1		Transmitting station		20,782.00				48,000				39,690
2		South near station		2,301.00				5,000				4,134.375
3		North near station		3,478.00				8,000				6,615
4		South far station		4,323.00				9,000				7,441.875
5		Oil truck garage		29,112.00				67,000				55,400.625
6		Departure and air traffic control building		1,019,730.00				2,353,000				1,945,636.875
0		Xxxxxxx xxxxxxxx Xxxx		20,962.00				48,000				39,690
8		Apron expansion		21,308.95				49,000				40,516.875
0		Xxxxxx xxxxxxx xxxx expansion		165,101.94				380,000				314,212.5
00		Xxxxx Xxxxxxxx		13,113.40				148,000				122,377.5
11		Supermarket facade room		9,304.70				105,000				86,821.875
12		Funding raising facade room		5,450.8				60,000				49,612.5

5

Breakdown of properties rent (January to September)

No.		Properties		Address		Lease area(m2)				Base rent (yuan)				Rent total of January to September
										548,305.12
1		Transmitting station		Nanyang Airport		298.42				9,638.97				7,970.220011
2		Far station		Nanyang Airport		74.07				2,392.46				1,978.266189
3		Lifting platform		Nanyang Airport		73.95				2,388.59				1,975.061222
4		North near station		Nanyang Airport		89.81				2,900.86				2,398.651093
5		South near station		Nanyang Airport		82.93				2,678.64				2,211.899623
6		South far station		Nanyang Airport		237.17				7,660.59				6,311.651183
7		Oil truck garage		Nanyang Airport		131.67				4,252.94				3,516.650589
8		Oil depot – Security room		Nanyang Airport		177.19				5,723.24				4,732.401594
9		Oil depot – Duty room		Nanyang Airport		227.82				7,358.59				6,084.630799
10		Oil depot – Duty room		Nanyang Airport		261.63				8,450.65				6,987.630392
11		Oil depot – Duty room		Nanyang Airport		68.34				2,207.38				1,825.228991
12		Oil depot – Garage		Nanyang Airport		327.44				10,576.31				8,715.287985

6

No.		Properties		Address		Lease area(m2)				Base rent (yuan)				Rent total of January to September
13		Oil depot – A room		Nanyang Airport		22.47				725.78				600.1301644
14		Oil depot – Refueling room		Nanyang Airport		95.76				3,093.05				2,557.564065
15		Oil depot – Pump room		Nanyang Airport		220.23				7,113.43				5,881.916604
16		Oil depot – B room		Nanyang Airport		39.69				1,281.99				1,060.043001
17		Oil depot – Pump room		Nanyang Airport		233.55				7,513.67				6,237.667997
18		Tool		Nanyang Airport		170.4				5,503.92				4,551.05385
19		Newly built hanger		Nanyang Airport		1,224				39,535.20				32,690.6685
00		Xxxxxxxxx xxxxxx		Xxxxxxx Airport		59.49				1,921.53				1,588.862638
21		Base garage		Nanyang Airport		430.24				13,896.75				11,490.87681
22		Departure and air traffic control building		Nanyang Airport		5,240.01				169,252.32				139,950.5146
23		Terminal security room		Nanyang Airport		20.14				650.52				537.9003788
24		Terminal police station garage		Nanyang Airport		86.58				2,796.53				2,312.384051
25		Terminal duty room		Nanyang Airport		294.4				9,509.12				7,862.8536
26		Terminal living quarters		Nanyang Airport		250.5				8,091.15				6,690.369556
27		Terminal substation		Nanyang Airport		433.56				14,003.99				11,579.54758

7

No.		Properties		Address		Lease area(m2)				Base rent (yuan)				Rent total of January to September
28		Terminal substation		Nanyang Airport		419.42				13,547.27				11,201.89557
29		Terminal freight warehouse		Nanyang Airport		264.78				8,552.39				7,071.760789
30		Terminal boiler room		Nanyang Airport		372.57				12,034.01				9,950.622846
31		Terminal staff canteen		Nanyang Airport		319.7				10,326.31				8,538.567581
32		Terminal staff hospital		Nanyang Airport		349.32				11,283.04				9,329.660393
33		Terminal special garage		Nanyang Airport		527.72				17,045.36				14,094.37874
34		Terminal water plant duty room		Nanyang Airport		15.8				510.34				421.9873875
35		Terminal pumping station		Nanyang Airport		40.95				1,322.69				1,093.695159
36		Terminal deep well pump station		Nanyang Airport		20.5				662.15				547.5152813
37		Terminal weather building		Nanyang Airport		676.8				21,860.64				18,076.0167
38		Terminal maintenance workshop		Nanyang Airport		153.54				4,959.34				4,100.755916
39		Terminal maintenance building		Nanyang Airport		268.54				8,673.84				7,172.183104
40		Terminal maintenance building		Nanyang Airport		426.4				13,772.72				11,388.31785
41		Terminal maintenance workshop		Nanyang Airport		206.15				6,658.65				5,505.867084
42		Terminal maintenance workshop		Nanyang Airport		37.2				1,201.56				993.539925
43		Terminal maintenance workshop		Nanyang Airport		94.24				3,043.95				2,516.96781
44		Terminal maintenance workshop		Nanyang Airport		214.67				6,933.84				5,733.419777

8

No.		Properties		Address		Lease area(m2)				Base rent (yuan)				Rent total of January to September
45		Terminal fire services tower		Nanyang Airport		155.04				5,007.79				4,140.81801
46		Terminal fire services dormitory and garage		Nanyang Airport		811.69				26,217.59				21,678.66725
47		Terminal service duty room		Nanyang Airport		728.91				23,543.79				19,467.77384

9

Breakdown of building rent (January to September)

No.		Building		Address		Base rent (yuan)				Rent total of January to September
							2,069,218
1		39186 m2 Asphalt road		Nanyang Airport			121,671				100,606.7081
2		Drainage iron pipe		Nanyang Airport			141,494				116,977.8513
3		Water tower		Nanyang Airport			2,215				1831.528125
4		Apron contact road		Nanyang Airport			843,335				697,332.6281
5		Apron electric cable		Nanyang Airport			758				626.77125
6		Maintenance wall		Nanyang Airport			567				468.838125
0		Xxxxxxxxxxx xxxx		Xxxxxxx Airport			1,711				1,414.783125
8		Generating chamber installation		Nanyang Airport			2,887				2,387.188125
9		Drainage bridge		Nanyang Airport			692				572.1975
10		Passenger apron installation		Nanyang Airport			1,154				954.21375
11		Y-7 Apron		Nanyang Airport			484,64				40,073.67
12		Yun Xx Xxxx Gou		Nanyang Airport			246				203.41125
13		Apron navigation aids light		Nanyang Airport			3,849				3,182.641875
14		Y-5 Apron		Nanyang Airport			2,026				1,675.24875

10

No.		Building		Address		Base rent (yuan)				Rent total of January to September
15		Fire services pipe		Nanyang Airport			3,849				3,182.941875
00		Xxxxxxxx xxxx xxxxx		Xxxxxxx Xxxxxxx			4,667				3,859.025625
17		Apron expansion		Nanyang Airport			870,849				720,083.2669
18		Gate renovation of Nanyang Airport		Nanyang Airport			18,784				15,532.02

11

Breakdown of land rent (October to December)

No.		No. of land title certificate		Name of land parcel		Use		Nature		Area (m2)				Annual rent (yuan/year)				Rent of October to December
Nanyang
1		Wan Shi Tu Xxx Xxxx (2005) No. 02585		Transmitting station		Civil airport		Transfer		20,782.00				367,978.00				91,994.5
0		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		South near station		Civil airport		Transfer		2,301.00				40,739.00				10,184.75
0		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		North near station		Civil airport		Transfer		3,478.00				61,580.00				15,395
4		Wan Shi Tu Xxx Xxxx (2005) No. 02581		South far station		Civil airport		Transfer		4,323.00				76,544.00				19,136
0		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		Oil truck garage		Civil airport		Transfer		29,112.00				515,467.00				128,866.75
0		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		Departure andair trafficcontrol building (airport site)		Civil airport		Transfer		1,019,730.00				17,133,763.00				4,283,440.75
7		Wan Qu Xxx Xxxx (2003) Zi Xx. 00		Xxxxxxx xxxxxxxx xxxx		Civil airport		Authorized operation		20,962.00				370,778.00				92,694.5
8		Wan Qu Xxx Xxxx (2003) Zi No. 36		Apron expansion		Civil airport		Authorized operation		21,308.95				356,538.00				89,134.5
9		Wan Qu Xxx Xxxx (2003) Zi Xx. 00		Xxxxxx xxxxxxx xxxx expansion		Civil airport		Authorized operation		165,101.94				2,762,456.00				690,614
10		Wan Shi Tu Xxx Xxxx (2005) No. 02587		South terminal		Education and residentialland		Transfer		13,113.40				1,560,675.00				390,168.75
00		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		Supermarket facade room  (Renmin Bei Road convoy area and old cadresfloor)		Office and residential		Allocate		9,304.70				1,107,382.00				276,845.5
00		Xxx Xxx Xx Xxx Xxxx (0000) Xx. 00000		Funding raising facade room and old cadres floor				Allocate		5,450.80				648,720.00				162,180
Total														25,002,620.00				6,250,655

12

Breakdown of properties rent (October to December)

No.		Title certificate No.		Name of building		Structure		Completion Date		Measurement units		Construction Area				Annual rent (yuan/year)				Rent of October to December
Nanyang
1		Wan Xxx Xxxx Zi Xx. 000000		Xxxxxxxx xxxx far station		Brick and concrete		1993-1-1		m2		74.07				4,126.00				1031.5
2		Wan Xxx Xxxx Zi No. 901015		South near station		Brick and concrete		1993-1-1		m2		82.93				4,620.00				1,155
3		Wan Xxx Xxxx Zi Xx. 000000		Xxxxx xxx xxxxxxx		Brick and concrete		1993-1-1		m2		237.17				13,212.00				3,303
4		Wan Xxx Xxxx Zi No. 901005		New air material depot		Framework		1994-12-1		m2		1,224				100,042.00				25,010.5
5		Wan Xxx Xxxx Zi No. 901006		Air traffic control building		Framework		1993-1-1		m2		2,083.04				194,620.00				48,655
6		Wan Xxx Xxxx Zi No. 901006		Terminal duty room		Brick and concrete		1993-1-1		m2		294.4				15,967.00				3,991.75
7		Wan Xxx Xxxx Zi No. 901010		Terminal water plantduty room		Brick and concrete		1993-1-1		m2		15.8				881.00				220.25
8		Wan Xxx Xxxx Zi No. 901010		Terminal pumping station		Brick and concrete		1993-1-1		m2		40.95				2,281.00				570.25
9		Wan Xxx Xxxx Zi No. 901010		Terminal deep well pump station		Brick and concrete		1993-1-1		m2		20.5				1,430.00				357.5
10		Wan Xxx Xxxx Zi No. 901010		Terminal maintenance workshop		Brick and concrete		1993-1-1		m2		153.54				8,537.00				2,134.25
00		Xxx Xxx Xxxx Xx Xx. 000000		Terminal maintenance building 2		Brick and concrete		1993-1-1		m2		426.4				23,126.00				5,781.5
00		Xxx Xxx Xxxx Xx Xx. 000000		Terminal maintenance workshop 2		Brick and concrete		1993-1-1		m2		206.15				11,462.00				2,865.5
00		Xxx Xxx Xxxx Xx Xx. 000000		Terminal maintenance workshop 5		Brick and concrete		1993-1-1		m2		214.67				11,936.00				2,984
00		Xxx Xxx Xxxx Xx Xx. 000000		Terminal fire services tower		Brick and concrete		1993-1-1		m2		155.04				7,862.00				1,965.5
00		Xxx Xxx Xxxx Xx Xx. 000000		Terminal fire services dormitory and garage		Brick and concrete		1993-1-1		m2		811.69				44,021.00				11,005.25
Total												6,040.35				444,123.00

13

Breakdown of buildings rent (October to December)

No.		Name		Structure		Completion date		Length (m)			Width (m)			Height/ depth (m)			Measurement units		Area (m2) or Volume (m3)				Annual rent (yuan/year)				Rent of October to December
Nanyang
1		Runway		Brick surface		1993-1-1		2,300			45			0.32			m2		103,500.00				3,478,787.00				869,696.75
0		Xxxxxxx xxxx Xx. 0		Brick surface		1993-1-1		140			18			0.32			m2		2,520.00				74,794.00				18,698.50
3		Passenger apron		Brick surface		1993-1-1		240			100			0.32			m2		24,000.00				712,327.00				178,081.75
4		Common apron		Brick surface		1993-1-1		328			55			0.22			m2		18,040.00				535,433.00				133,858.25
5						2004-6-30		12.7						2.55			m2		32.385				8,320.00				2,080.00
6		Security room		Brick and concrete		2004-6-30		9.9			3.9						m2		38.61				2,767.00				691.75
Total																							4,812,428.00				1,203,107.00

14