Dated
AS OF THIS DAY 28 OF September,  2009

              


      CHINA
SOUTHERN AIRLINES CO. LTD.

             


      CHINA
SOUTHERN AIR HOLDING COMPANY

             


      MTU
AERO ENGINES GMBH

            


      MTU
MAINTENANCE ZHUHAI CO. LTD.

                


      
        
          

        

      

             



      AGREEMENT

              

      
        
          

        

            

          
            
               


            

            
              
              

              
                

              

            

            
               


            

          

        

      

         

      THIS AGREEMENT is dated as of
this ___ day of _____________ 2009

           



      Parties

        


      
        	
                (1)  

              	
                CHINA SOUTHERN AIRLINES CO.
      LTD., a legal person duly organised and existing under the laws of
      the People's Republic of China ("PRC") and having its
      legal address at Guangzhou Economic and Technological Development Zone,
      Guangdong Province, PRC ("Transferor");

              


      

      


      
        	
                (2)  

              	
                CHINA SOUTHERN AIR HOLDING
      COMPANY, a legal person duly organised and existing under the laws
      of the PRC and having its legal address at Baiyun International Airport,
      Guangzhou, Guangdong Province, PRC ("Transferee");

              


      

      


      
        	
                (3)  

              	
                MTU AERO ENGINES GMBH, a
      company duly incorporated and existing under the laws of the Federal
      Republic of Germany and having its registered address at Dachauer Str.
      665, 80995 Munich, Germany ("MTU");
    and

              


      

      


      
        	
                (4)  

              	
                MTU MAINTENANCE ZHUHAI CO.
      LTD., a company duly incorporated and existing under the laws of
      the PRC and having its registered address at Zhuhai Free Trade Zone,
      Guangdong Province, PRC ("JV
      Company").

              


      

      


      (Each of
the parties may hereinafter be referred to individually as a "Party" and collectively as the
"Parties".)

      


      Whereas

      


      
        	
                (A)  

              	
                The Transferor and MTU established the JV Company in 2001 and
      entered into an Equity Joint Venture Contract for establishment of the JV
      Company on March 12, 2001 ("JV
      Contract").  Under the JV Contract, each of the
      Transferor and MTU owes certain obligations to each other and the JV
      Company.

              


      

      


      
        	
                (B)  

              	
                The Transferor intends to transfer its entire equity interest
      in the JV Company to the Transferee, the parent company of the Transferor,
      pursuant to Article 15.2 of the JV Contract ("Proposed
      Transfer").

              


      

      


      
        	
                (C)  

              	
                The
      Parties intend to enter into this Agreement to comply with the provisions
      of Article 15.2 of the JV Contract and set out the Parties' rights and
      obligations after the Proposed Transfer is
  completed.

              


      

      


      Agreed
terms

      


      
        	
                1.  

              	
                Unless otherwise defined herein or the context expressly
      requires otherwise, words and expressions used in this Agreement shall
      have the meanings given to them in the JV Contract.  The JV
      Contract and the Articles of Association of the JV Company referred to in
      this Agreement shall mean the amended and restated JV Contract and the
      amended and restated Articles of Association of the JV Company when
      referring to any period after the completion of the Proposed
      Transfer.

              


      

      


      
        	
                2.  

              	
                The Transferor hereby undertakes to each of MTU and the JV
      Company (and the Transferee shall procure the Transferor to duly comply
      with its undertakings to MTU and the JV Company hereunder) that upon this
      Agreement becoming effective:

              


      

        

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

        

      
        	
              	
                2.1.  

              	
                it
      shall continue to perform its obligations, and comply with the provisions,
      under Articles 17.1.3, 17.1.8, 17.2 and 17.3 of the JV Contract ;
      and

              


      

      


      
        	
              	
                2.2.  

              	
                the
      Proposed Transfer shall not in any way affect the performance by the
      Transferor of its obligations under each of the CFM56 Maintenance
      Agreement, the V2500 Maintenance Agreement and any other agreements
      entered into between the Transferor and the JV Company for the term of the
      JV Contract.  For the avoidance of doubt, the Transferor hereby
      confirms that the CFM56 Maintenance Agreement includes the exclusive
      repair, overhaul and maintenance by the JV Company of CFM56-5 and CFM56-7
      engines operated by the Transferor, subject to the JV Company being
      internationally competitive as defined through the “Net Most Favoured
      Contract Terms” specified in the Maintenance
  Agreements.

              


      

      


      For the
avoidance of doubt, the Transferor undertakes and warrants to each of MTU and
the JV Company that, from the date of this Agreement and until the expiry of
the  term of the JV Contract, regardless of any change to the
shareholding of the JV Company, the Transferor will continue to perform and
comply with the above obligations. Without prejudice to the Transferee's
undertaking and warranty under Section 3, as from the Effective Date (defined
below), the due performance of the above specified obligations by the Transferor
shall be deemed to fulfil the Transferee's obligations to perform the
Transferee's corresponding obligations under the JV Contract and the Articles of
Association of the JV Company and the Transferor will not be obliged to perform
other obligations under the JV Contract and the Articles of Association of the
JV Company.

      


      
        	
                3.  

              	
                Subject
      to this Agreement becoming effective in accordance with Section 4, the
      Transferee undertakes and warrants to MTU and the JV Company that, during
      the remaining term of the JV
Contract:

              


      

      


      
        	
              	
                3.1  

              	
                The
      Transferee will continue to be a controlling shareholder of the Transferor
      and the Transferee shall not sell or otherwise dispose of a controlling
      stake in the Transferor;

              


      

      


      
        	
              	
                3.2  

              	
                 The
      Transferee shall take all actions and perform all acts necessary, or shall
      procure that all actions are taken and all acts necessary are performed,
      to ensure that the Transferor will not act in any manner that will (i)
      result in any breach of the Transferee's obligations under the JV Contract
      and/or the Articles of Association of the JV Company, or (ii) otherwise
      contravene the Transferee’s obligations under the JV Contract and/or the
      Articles of Association;and

              


      

      


      
        
          	
                	
                  3.3

                	
                  The
      Transferee shall procure that the Transferor will duly perform its
      obligations, and comply with this Agreement and the provisions under
      Articles 17.1.3, 17.1.8, 17.2 and 17.3 of the JV Contract ;
      and

                


        

      

      


      
        	
                4.  

              	
                Upon the obtaining of the approval by the Transferor’s
      shareholders and the PRC government authorities’ approval of this
      Agreement (if necessary), the Transferee and MTU will enter into amended
      and restated JV Contract and Articles of Association of the JV Company to
      reflect the Proposed Transfer and submit the same to the approval
      authorities for approval.  The Proposed Transfer will become
      effective on the date on which the approval by the Transferor’s
      shareholders and the PRC government authorities’ approval of the Proposed
      Transfer are given ("Effective Date"). If
      this Agreement does not become effective on or before 31 December 2009, it
      will lapse and be of no further force and effect, and the Parties shall
      have no claims whatsoever against each
  other.

              


      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

         

      
        	
                5.  

              	
                Nothing
      in this Agreement shall release the Transferor from any liability in
      respect of any obligations under the JV Contract due to be performed prior
      to the Effective Date.

              


      

      


      
        	
                6.  

              	
                If
      any provision, or any portion thereof, of this Agreement shall be held
      invalid, illegal or unenforceable under the laws of the PRC, the validity,
      legality and enforceability of the remaining provisions herein shall not
      in any way be affected or impaired thereby.  The Parties shall
      consult with each other in good faith to reach an agreement on provisions
      acceptable to each Party to replace to such
  provisions.

              


      

      


      
        	
                7.  

              	
                The
      validity, interpretation and implementation of this Agreement and the
      resolution of disputes concerning the validity, interpretation and
      implementation of this Agreement shall be governed by relevant and
      published laws of the PRC.

              


      

      


      
        	
                8.  

              	
                This
      Agreement is made in Chinese and English.  Both language
      versions shall have the same validity.  Each Party acknowledges
      and confirms that it has reviewed both language versions and that no
      material differences between the two language versions of this Agreement
      in terms of substance.

              


      


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      This
Agreement has been executed and delivered on the date(s) indicated
below.

      


      
        	
                CHINA
      SOUTHERN AIRLINES CO.

                LTD.

              	 
      	
                MTU
      AERO ENGINES GMBH

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Name:Tan
      Wangeng

              	 
      	
                
                  Name:
      WEINGARTNER/ R.Winkler

                

              
	
                Title:

              	 
      	
                
                  Title:
      CEO Commercial Maintenance /CFO

                

              
	
                Date:

              	 
      	
                
                  Date:

                

              
	
                Company
      seal:

              	 
      	 
      
	 
      	 
      	 
      
	
                CHINA
      SOUTHERN AIR HOLDING

                COMPANY

              	 
      	
                MTU
      MAINTENANCE ZHUHAI CO.

                LTD.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Name: Si
      Xianmin

              	 
      	
                
                  Name:
      Holger Sindemann

                

              
	
                Title:

              	 
      	
                
                  Title:
      President & CEO

                

              
	
                Date:

              	 
      	
                
                  Date:

                

              
	
                Company
      seal:

              	 
      	
                
                  Company
      seal:

                

              


      


      
        
           


        

        
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