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| 1. | Party      A is a joint stock limited company duly organized and validly existing      under the laws of the PRC with a registered capital of RMB8,003,567,000.      Its shares are listed on the Shanghai Stock Exchange and the Stock      Exchange of Hong Kong Limited. Its total share capital comprises      8,003,567,000 shares, among which 4,021,150,000 A shares are held by the      promoter, 1,500,000,000 A shares are held by domestic public investors and      2,482,417,000 H shares are held by overseas  investors. |
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| 2. | Party      B is a limited liability company duly organized and validly existing under      the laws of Hong Kong holding 9.01% of the issued capital of Party      A; |
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| 3. | Party      A intends to increase its registered capital by way of a non-public issue      of H shares, while Party B intends to subscribe for all the H shares to be      issued by Party A by way of a non-public issue in order to increase the      registered capital of Party A. |
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| 4. | Party      A intends to increase its registered capital by way of a non-public issue      of A shares, while China Southern Air Holding Company intends to subscribe      for part of A shares to be issued by Party A by way of a non-public      issue. |
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| 1. | Definitions      and Interpretation |
|----|-------------------------------------|

|  | 1.1 | In      the Agreement, unless the context requires otherwise, the following      expressions shall have the followingmeanings: |
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|   | 1.1.1. | “Agreement” refers      to the Agreement dated March 8, 2010 on subscription of H Shares      to be issued by China Southern Airlines Company Limited by way of      non-public issue. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.2. | “Non-public Issued H Shares” refers to      no more than 312,500,000 new H Shares to be issued by Party A to      Party B by way of non-public issue in accordance with the Agreement.      Pursuant to the requirements of the Agreement, the par value of each      non-public issued H Share is RMB1.00. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.3. | “Non-public Issue of A      shares” refers to new A Shares to be issued  to not      more than 10 specific qualified investors by Party A by way of non-public      issue . |
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|   | 1.1.4. | “Non-public Issue of H Shares” refers to      new H Shares to be issued by Party A to Party B by way of non-public      issue . |
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|   | 1.1.5. | “Completion of the Non-public      Issue” refers to the date on which the shares to be      issued under the Non-public Issue are registered under the name of Party B      in the Securities Depository and Clearing  Corporation. |
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|   | 1.1.6. | “CSRC” refers to China      Securities Regulatory Committee. |
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|  | 1.1.7. | “SHSE” refers to the      Shanghai Stock Exchange. |
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|   | 1.1.8. | “Securities Depository and      Clearing Corporation” refers to Hong Kong Registrars Limited., the      registrar of H Shares of Party A in HongKong. |
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|   | 1.1.9. | “SEHK” refers to Stock Exchange      of Hong Kong Limited. |
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|   | 1.1.10. | “Public Disclosure”      refers to the disclosure on the media of information disclosure designated      by SEHK or CSRC. |
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|  | 1.2 | Interpretation |
|--|-----|----------------|

|  | 1.2.1. | Headings      used herein are for easy reference purpose only, and shall not be used to      construe the Agreement. |
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|  | 1.2.2. | Any      reference to an article, a clause, a paragraph, an annex or an appendix      shall mean the article, clause, paragraph, annex or appendix in the      Agreement. |
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|  | 1.2.3. | Any      reference to “including” herein, whether or not followed by “but not      limited to”, shall mean “including but not limited  to”. |
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| 2. | Consideration |
|----|---------------|

|  | 2.1 | Both      Parties agree that the price of the Non-public Issued H Shares shall be      not less than HK$2.73 per share,the average      trading price for the twenty trading days immediately prior to the pricing      ex-date. |
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|  | 2.2 | Based      on the issue price specified in Article 2.1 above, Party A shall issue not      more than 312,500,000 H Shares to Party B by way of a Non-public Issue.      Party B agrees to subscribe for the aforesaid number of Non-public Issued      H Shares in cash. In the event of ex-rights or ex-dividend of the Shares      of Party A during the period between the pricing ex-date and the issue      date, the number of H Shares to be issued and the issue price shall be      adjusted accordingly. |
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|  | 2.3 | Both      Parties agree that as soon as the “Conditions Precedent” as set out in      Article 3 are all satisfied, Party B shall subscribe the Non-public Issued      H Shares according to the notification of Party A and this agreement      and   make one lump-sum payment of the consideration for      the Non-public Issued H Shares in cash to the bank account designated by      Party A in writing. |
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|  | 2.4 | Both      Parties confirm that after Completion of H share non-public issue, Party B      shall enjoy corresponding rights (including the rights over the retained      profit) and undertake corresponding obligations proportionate to its      shareholding percentage in Party A. |
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| 3. | Conditions      Precedent |
|----|---------------------------|

|  | 3.1 | The      Agreement shall become effective upon fulfillment of all the conditions      set out below: |
|--|-----|------------------------------------------------------------------------------------------------------|

|  | 3.1.1. | The      implementation of the Non-public Issue of H shares under the Agreement and      the Non-public Issue of A shares being approved at the board meeting,      shareholders’ general meeting and class meeting of Party  A; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.1.2. | The      subscription of the Non-public Issued H Shares of Party A under the      Agreement being approved at the board of Party B; and the subscription of      the Non-public Issued A shares of Party A being approved at the General      Manager office meeting of China Southern Air Holding    Company; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.1.3. | The      receipt of all the licenses, authorizations, permits, consents and      approvals from the relevant approval authorities and other relevant      approvals for the implementation of the Non-public Issue of H shares under      the Agreement by Party A and the Non-public Issue of A shares to China      Southern Air Holding Company and other investors;  and |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.1.4. | The      approval of the Listing Committee of SEHK for the listing and trading of      Non-public Issued Shares. |
|--|--------|------------------------------------------------------------------------------------------------------------------|

|  | 3.2 | Party      A and Party B shall do or procure to be done with their best efforts all      such acts and things necessary to fulfill the above-mentioned conditions      precedent and for the implementation of the Non-public Issue pursuant to      the applicable laws andregulations. |
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|  | 3.3 | If      the above-mentioned conditions precedent cannot be fulfilled within twelve      months from the date of approval of the Agreement by shareholders of Party      A in a general meeting, the Agreement shall cease to be effective, and      neither Party A nor Party B shall lodge any claim against the other party      (except for any claim against any previous breach of the      Agreement). |
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| 4. | Change      Registration for the Non-publicIssue |
|----|--------------------------------------------------|

| 5. | Undertakings      and Guarantees Given by Party A |
|----|---------------------------------------------------|

|  | 5.1 | Party      A guarantees to Party B that: |
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|  | 5.1.1. | Party      A is a corporate legal person duly incorporated and existing under the PRC      laws; |
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|  | 5.1.2. | Party      A will enter into and execute theAgreement: |
|--|--------|--------------------------------------------------------|

|  | 5.1.2.1. | The      requirements of its Articles of Association have been  met; |
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|  | 5.1.2.2. | It      has taken or will take necessary corporate actions to obtain all necessary      authorisation and approvals; |
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|  | 5.1.2.3. | It      will not breach any restrictions imposed by laws or contracts which are      binding or have effect on Party A. |
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|  | 5.2 | Party      A guarantees that in the process of bargaining and negotiation for the      signing of the Agreement, all the information provided by Party A to Party      B is true, accurate and complete. |
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|  | 5.3 | Party      A undertakes that it will comply with all the terms of the      Agreement. |
|--|-----|---------------------------------------------------------------------------------------|

|  | 5.4 | Party      A undertakes that it will assume economic obligation and legal obligation      for breach of any of these guarantees and undertakings mentioned above,      and compensate Party B for the actual loss and expenses so      incurred. |
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| 6. | Undertakings      and Guarantees Given by Party B |
|----|---------------------------------------------------|

|  | 6.1 | Party      B guarantees to Party A that: |
|--|-----|------------------------------------------|

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|  | 6.1.1. | Party      B is a limited liability company duly organized and validly existing under      the laws of Hong Kong; |
|--|--------|-------------------------------------------------------------------------------------------------------------------|

|  | 6.1.2. | Party      B will enter into and execute the  Agreement: |
|--|--------|---------------------------------------------------------------|

|  | 6.1.2.1. | The      requirements of its Articles of Association have been  met; |
|--|----------|----------------------------------------------------------------------|

|  | 6.1.2.2. | It      has taken or will take necessary corporate actions to obtain all necessary      authorisation and approvals; |
|--|----------|----------------------------------------------------------------------------------------------------------------------|

|  | 6.1.2.3. | It      will not breach any restrictions imposed by laws or contracts which are      binding or have effect on Party B. |
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|  | 6.1.2.4. | Party      B will comply with the regulations promulgated by PRC and Hong Kong in      connection with the prohibition of insider trading and market      misconduct; |
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|  | 6.2 | Party      B guarantees that in the process of bargaining and negotiating for the      signing of the Agreement, all the information provided by Party B to Party      A is true, accurate and complete. |
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|  | 6.3 | Party      B undertakes that it will comply with all the terms of the      Agreement. |
|--|-----|---------------------------------------------------------------------------------------|

|  | 6.4 | Party      B undertakes that it will assume economic obligation and legal obligation      for breach of any of these guarantees and undertakings mentioned above,      and compensate Party A for the actual loss and expenses so      incurred. |
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| 7. | Liability      for Breach of the Agreement |
|----|--------------------------------------------|

| 8. | Alterations,      Amendments and Assignment of theAgreement |
|----|-------------------------------------------------------------|

|  | 8.1 | Alterations      or amendments of the Agreement shall be subject to negotiation between the      Parties and made in writing. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------|

|  | 8.2 | Alterations      and amendments of the Agreement form an integral part of the      Agreement. |
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|  | 8.3 | Neither      Party shall have the right to assign in whole or in part their rights or      obligations under the Agreement without the written consent of the other      party. |
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| 9. | The      Entire Agreement |
|----|---------------------------|

|  | 9.1 | The      Agreement shall constitute the entire agreement in connection with the      subject matter of the Agreement between the Parties hereto and shall      supersede any and all previous oral and written proposals, statements,      guarantees, commitments, letters of intention, Memorandums of      understanding, agreements and contracts between the Parties. The Parties      shall not and have no right to rely on those proposals, statements,      guarantees, commitments, letters of intention, Memorandums of      understanding, agreements andcontracts. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10. | Sharing      of Taxes and Expenses |
|-----|------------------------------------|

|  | 10.1 | Save      as otherwise agreed between the Parties, taxes and Expenses incurred in      connection with the Non-pubic Issue of H shares shall be shared by the      Parties in accordance with the relevant regulations of the      state. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11. | Notice |
|-----|--------|

|  | 11.1 | Relevant      notices under or relating to the Agreement from either Party shall be      dispatched in written form. A notice shall be deemed effectively received      if delivered by hand or registered post to the Parties at the following      addresses, or other addresses as instructed by the recipients in ten days      prior to the written notice: |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Party      A:   | China      Southern Airlines Company Limited |
|-----------------|----------------------------------------------|
|            |                                         |
| Address:        | 278      Ji Chang Road, Guangzhou            |
|            |                                         |
| Post      code: | 510406                                       |
|            |                                         |
| Recipient:      | Qin      Haifeng                             |

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| Party      B: | Nan      Lung Holding Company Limited                          |
|---------------|----------------------------------------------------------------|
|          |                                                           |
| Address:      | Unit      1106-7, K.Wah Centre, 191 Java Road, North Point, HK |
|          |                                                           |
| Recipient:    | Wang      Xiaohui                                              |

|  | 11.2 | A      notice if delivered by hand shall be deemed effectively received upon the      recipient’s signature. A notice, when delivered by registered post, shall      be deemed received seven days after the dispatch of the same at the      address of the recipient. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12. | Termination      of the Agreement |
|-----|-----------------------------------|

|  | 12.1 | The      Agreement may be terminated upon the occurrence of one or more of the      circumstances as follows: |
|--|------|---------------------------------------------------------------------------------------------------------------|

|  | 12.1.1. | Both      Parties to the Agreement have unanimously agreed through      consultation; |
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|  | 12.1.2. | Should      the Agreement fail to meet the conditions precedent prescribed in Article      3 or cannot be performed under the laws, orders, government bans or      judicial rulings, either party shall be entitled to discharge the      Agreement unilaterally by a writtennotice. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 12.2 | Should      any circumstance mentioned above occur owing to the fault of either party      or both Parties, each party shall assume its respective liability for      breach of the Agreement as prescribed in Article 7  hereof. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13. | Settlement      of Disputes |
|-----|-----------------------------|

|  | 13.1 | The      Agreement is subject to the laws of the People’s Republic of      China. |
|--|------|-----------------------------------------------------------------------------------------|

|  | 13.2 | All      disputes arising from the implementation of the Agreement shall be settled      through friendly negotiation between the Parties. Where negotiation is not      successful, any Party may refer the dispute to the people’s court with      competent jurisdiction in Guangzhou for legal  proceedings. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 13.3 | Except      for the disputes submitted for legal proceedings, each Party shall      continue to perform other provisions of the  Agreement. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------|

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| 14. | Confidentiality |
|-----|-----------------|

|  | 14.1 | After      the signing of the Agreement, unless prior written consent of the other      party has been obtained, each party shall, regardless whether the      Non-public Issue of H shares under the Agreement is completed or not, or      whether the Agreement is terminated, rescinded, revoked, deemed to be      void, or fulfilled, undertake the following obligations of      confidentiality: |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 14.1.1. | The      Parties shall not disclose to any third party the Agreement and the      transaction contemplated hereunder and any other documents related to the      transaction (hereinafter referred to as “Confidential      Documents”); |
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|  | 14.1.2. | The      Parties shall use the Confidential Documents and their contents only for      the purpose of the transaction contemplated hereunder, but not for any      other purpose. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 14.2 | The      Parties to the Agreement shall not be subject to the restrictions of      Article 14.1 if they disclose the Confidential Documents for the following      reasons: |
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|  | 14.2.1. | Disclosure      to the Parties to the Agreement and any of the intermediaries including      sponsors of the A shares, the financial advisors of the non-public issue      of H shares, accountants, and lawyers engaged by such    Party; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 14.2.2. | Disclosure      made according to the mandatory requirements of laws and      regulations; |
|--|---------|--------------------------------------------------------------------------------------------|

|  | 14.2.3. | Disclosure      made according to the mandatory requirements of the competent government      authorities. |
|--|---------|------------------------------------------------------------------------------------------------------------|

| 15. | Other      Provisions |
|-----|-----------------------|

|  | 15.1 | The      Agreement shall be formed from the date of signing by the legal      representatives of the Parties or their duly authorized representatives,      and shall come into force pursuant to the provisions of Article 3 of the      Agreement. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | 15.2 | The      Parties can, through negotiation, sign a separate written supplementary      agreement on any matter not covered by the Agreement. The supplementary      agreement shall have the same legal effect as the    Agreement. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 15.3 | The      Agreement shall be signed in 12 copies, with each Party holding one copy,      and the other 10 copies shall be filed with the relevant      authorities. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| China      Southern Airlines Company Limited |
|----------------------------------------------|
|                                         |
| By:                                          | /s/      Si Xianmin (Company Seal) |
| Name:                                        | Si      Xianmin |
| Title:                                       | Legal      representative |

| Nan      lung Holding Limited |
|-------------------------------|
|                          |   |
| By:                           | /s/      Wang Quanhua (Company Seal) |
| Name:                         | Wang      Quanhua |
| Title:                        | Authorized      representative |

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