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| Party A:  |  China      Southern Airlines Company Limited |
|---------------------|----------------------------------------------------|

| Address: |  Guangzhou      Economic & Technology Development Zone, Gangdong Province, the      PRC |
|----------|--------------------------------------------------------------------------------------------------|

| 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 RMB6,561,267,000.      Its shares are listed on the Shanghai Stock Exchange and the Stock      Exchange of Hong Kong Limited. Its total share capital comprises      6,561,267,000 shares, among which 3,300,000,000 A shares are held by the      promoter China Southern Air Holding Company, 1,500,000,000 A shares are      held by domestic public investors and 1,761,267,000 H shares are held by      overseas investors. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Party      B is a limited liability company duly organized and validly existing under      the laws of Hong Kong; |
|----|-------------------------------------------------------------------------------------------------------------------|

| 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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| 1. | Definitions      and Interpretation |
|----|-------------------------------------|

|  | 1.1 | In      the Agreement, unless the context requires otherwise, the following      expressions shall have the followingmeanings: |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.1. | “Agreement” refers      to the Agreement dated December 10, 2008 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 Shares” refers to      the 721,150,000 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 Share is      HK$ equivalent of RMB1.00. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.3. | “Non-public Issue” refers      to the subscription in cash in HK$ by Party B of the      Non-public Issued Shares to be issued by Party  A. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.4. | “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. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.5. | “CSRC” refers to China      Securities Regulatory Committee. |
|--------|--------|--------------------------------------------------------------------------|

|   | 1.1.6. | “SHSE” refers to the      Shanghai Stock Exchange. |
|--------|--------|----------------------------------------------------------------|

|   | 1.1.7. | “Securities Depository and      Clearing Corporation” refers to Hong Kong Registrars Limited., the      registrar of H Shares of Party A in HongKong. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.8. | “SEHK” refers to Stock Exchange      of Hong Kong Limited. |
|--------|--------|-----------------------------------------------------------------------------|

|   | 1.1.9. | “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. |
|--|--------|----------------------------------------------------------------------------------------------------------------------|

|  | 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. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 1.2.3. | Any      reference to “including” herein, whether or not followed by “but not      limited to”, shall mean “including but not limited  to”. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Consideration |
|----|---------------|

|  | 2.1 | Both      Parties agree that the price of the Non-public Issued Shares shall be HK$      equivalent of RMB1.00 per share, and the exchange rate between HK$ and RMB      shall be determined by the middle exchange rate on the date of Party B’s      payment. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2.2 | Based      on the issue price specified in Article 2.1 above, Party A shall issue      721,150,000 Non-public Issued Shares to Party B by way of a Non-public      Issue. Party B agrees to subscribe for the aforesaid number of Non-public      Issued Shares in cash. In the event of ex-rights or ex-dividend of the      Non-public Issued Shares during the period between the price determination      date and the issue date, the number of Shares to be issued and the issue      price shall be adjustedaccordingly. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2.3 | Party      A shall notify Party B as soon as the “Conditions Precedent” as set out in      Article 3 are all satisfied. Both Parties agree that the Non-public Issue      shall take place within 10 working days from the date Party B is notified      by Party A that the “Conditions Precedent” are all satisfied. Party B      shall make one lump-sum payment of the consideration for the Non-public      Issued Shares in cash to the bank account designated by Party A in      writing. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2.4 | Both      Parties confirm that after Completion of both A share non-public issue and      H share non-public issue, Party B shall hold 9.01% of the enlarged share      capital of Party A, and shall enjoy corresponding rights (including the      rights over the retained profit) and undertake corresponding      obligations. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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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 under the Agreement 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 Shares of Party A under the      Agreement being approved at the board of Party  B; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------|

|  | 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 under the      Agreement by Party A; 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. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 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). |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Change      Registration for the Non-publicIssue |
|----|--------------------------------------------------|

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

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|  | 5.1 | Party      A guarantees to Party B that: |
|--|-----|------------------------------------------|

|  | 5.1.1. | Party      A is a corporate legal person legally incorporated under the PRC laws with      valid existence; |
|--|--------|-------------------------------------------------------------------------------------------------------------|

|  | 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; |
|--|----------|----------------------------------------------------------------------|

|  | 5.1.2.2. | It      has taken or will take necessary corporate actions to obtain all necessary      authorisation and approvals; |
|--|----------|----------------------------------------------------------------------------------------------------------------------|

|  | 5.1.2.3. | It      will not breach any laws or restrictions imposed by any contracts which      are binding or have effect on PartyA. |
|--|----------|----------------------------------------------------------------------------------------------------------------------------|

|  | 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. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 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. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | Undertakings      and Guarantees Given by PartyB |
|----|-------------------------------------------------------|

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

|  | 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 laws or restrictions imposed by any contracts which      are binding or have effect on PartyB. |
|--|----------|----------------------------------------------------------------------------------------------------------------------------|

|  | 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. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 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. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7. | Liability      for Breach of the Agreement |
|----|--------------------------------------------|

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

|  | 8.1 | Alterations      and 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. |
|--|-----|-----------------------------------------------------------------------------------------------|

|  | 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. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|  | 10.1 | Save      as otherwise agreed between the Parties, tax and Expenses incurred in      connection with the Non-pubic Issue 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 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 written      notice: |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Party A:  | China      Southern Airlines Company Limited |
|--|---------------------|----------------------------------------------|

|  | Address:  | 278      Ji Chang Road, Guangzhou |
|--|----------------|-----------------------------------|

|  | Post code:  | 510406 |
|--|-----------------------|--------|

|  | Recipient:  | Qin      Haifeng |
|--|------------------|------------------|

|  | Party B:  | Nan      Lung Holding Company Limited |
|--|---------------------|---------------------------------------|

|  | Address:  | Room      B1, 9/F, United Center, 95 Queensway,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. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 12. | Discharge      of the Agreement |
|-----|---------------------------------|

|  | 12.1 | The      Agreement may be discharged 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; |
|--|---------|---------------------------------------------------------------------------------------|

|  | 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. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------|

| 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 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: |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 14.2.1. | Disclosure      to the Parties to the Agreement and any of the intermediaries including      sponsors, independent financial advisors for 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. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 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 20 copies. Party A and Party B shall hold one      copy each, and the other 18 copies shall be filed with the relevant      authorities. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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