Passenger and Cargo Sales Agency Services
Framework Agreement


 


This agreement was entered into by the following parties on
8 November 2013 in Guangzhou:


 


Party A:      China Southern Airlines
Company Limited (“CSA”)


Domicile: Guangzhou Economic & Technology Development Zone


Legal representative: Si Xian Min


 


Party B:      China Southern Airlines
Group Passenger and Cargo Agent Company Limited (“PCACL”)


Domicile: 1/F, Block 618, Baguoling Industrial Zone, Futian
District, Shenzhen


Legal representative:


 


Whereas:


		1.	Party A is a Chinese company which legally subsists, it has obtained
                                         the business licence from the Industry and Commerce Administration department according
                                         to the relevant provisions of the law and regulations of China, and has performed the
                                         annual filing duty according to the regulations.



		2.	Party B is a Chinese company which legally subsists, it has obtained
                                         the business licence from the Industry and Commerce Administration department according
                                         to the relevant provisions of the law and regulations of China, and has performed the
                                         annual filing duty according to the regulations, it is qualified to conduct agency business
                                         of international or domestic aviation passenger and cargo sales.



		3.	Party B has obtained the Operation Approval Certificate of Aviation
                                         Sales Agency Business Class 1 (or Class 2) issued by China Civil Aviation Main Bureau,
                                         and the Recognition Certificate and the Notice of Approval of International (or Domestic)
                                         Passenger Transportation and Cargo Transportation Sales Agency Business issued by the
                                         International Aviation Transportation Association.



		4.	Party B already possesses the necessary facilities, it has been
                                         equipped with qualified sales agent staff and it possesses more stable business premises.



 




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		5.	In view of the development of the business of Party B, the continuous
                                         increase in continuous connected transactions of routine operation with Party A, in order
                                         to regulate the connected transactions of routine operation between Party A and Party
                                         B, pursuant to the “Contract Law of the People’s Republic of China”,
                                         “Securities Law of the People’s Republic of China”, “Governance
                                         Codes on Listed Companies”, “Listing Rules of Shanghai Stock Exchange”
                                         and the articles of association of Party A, Party A agrees to assign Party B to carry
                                         out the following businesses according to the provisions of this agreement, including
                                         international and domestic ticket sales agency, international and domestic aviation cargo
                                         transportation sales agency, charter flight and pallet sales agency businesses, and extended
                                         businesses of delivery outside the warehouse zone and the related operation inside the
                                         warehouse zone and operation inside warehouse zone in Guangzhou, Beijing, Shanghai cargo
                                         stations.



 


In view of the above situations, in order to specify the rights
and duties of both parties in respect of the transactions, Party A and Party B enter into this framework agreement according to
the principles determined by amicable discussion for mutual observance, and for guiding the operation of the transactions provided
under this agreement, including the work of entering into and performing the specific contracts. Party A and Party B unanimously
agree to the following terms:


 


		I.	Applicable scope of the agreement



The provisions of this agreement are applicable
to all the transactions between Party A and Party B as stipulated by Article 2 of this agreement.


 


		II.	Main contents of the connected transactions



There are 5 types of connected transactions:


		1.	Party A appoints Party B to act as agent for the international
                                         and domestic ticket sales agency business of Party A, individual agreements on the specific
                                         business scope assigned and the related expenses will be entered into by Party A and
                                         Party B according to the actual needs, the specific rights and duties of both parties
                                         will be agreed upon in the individual agreements;



 




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		2.	Party A appoints Party B to act as agent for the international
                                         and domestic aviation cargo transportation sales agency, individual agreements on the
                                         specific business scope assigned and the related expenses will be entered into by Party
                                         A and Party B according to the actual needs, the specific rights and duties of both parties
                                         will be agreed upon in the individual agreements;



		3.	Party A agrees to appoint Party B to act as agent for the charter
                                         flight and pallet sales agency business of Party A in specified areas on the condition
                                         that CSAHC provides financial guarantee for the full amount for Party B, individual agreements
                                         on the specific business scope assigned and the related expenses will be entered into
                                         by Party A and Party B according to the actual needs, the specific rights and duties
                                         of both parties will be agreed upon in the individual agreements;



		4.	Party A agrees that Party B will carry out extended business of
                                         delivery of arriving goods in specified areas. Individual agreements on the specific
                                         business scope assigned and the related expenses will be entered into by Party A and
                                         Party B according to the actual needs, the specific rights and duties of both parties
                                         will be agreed upon in the individual agreements;



		5.	Party A agrees that Party B will carry out operation inside the
                                         warehouse zone in Guangzhou, Beijing, Shanghai cargo stations.



 


		III.	Rights and obligations of both parties



		(1)	Rights and obligations of Party A



		1.	It has the right to carry out inspection and supervision of business
                                         of the agent;



		2.	It must pay the agency handling fee to Party B according to the
                                         individual agreements entered into by both parties;



		3.	It has the right to request Party B to provide the necessary security
                                         to guarantee the performance of this agreement;



		4.	It has the right to receive the full amounts of the charter flight
                                         and pallet sums and passenger ticket and cargo freight sums from Party B.



 


		(2)	Rights and obligations of Party B



		1.	It has the right to receive the agency handling fee according to
                                         the individual agreements entered into by both parties;



		2.	It must pay the charter flight and pallet sums and passenger ticket
                                         and cargo freight sums to Party A according to the individual agreements entered into
                                         by both parties;



		2.	It must undergo the
                                         business inspection and supervision by Party A;



 




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		3.	It must not carry out promotion, advertisement under the name of
                                         Party A without the written permission of Party A. When it carries out external promotion,
                                         it must not harm the interest and external image of Party A;



		4.	It must adhere to the relevant rules and regulations of Party A;



		5.	It has the obligation to keep confidential the information provided
                                         by Party A;



		6.	It must not engage in acts or activities under the name of Party
                                         A outside the scope of matters assigned by this agreement.



 


		IV.	Special provisions



		1.	The pricing of the transactions of both parties should adhere to
                                         the principles of fairness and reasonableness, pursuant to the State or local provisions
                                         on charges, with the fair market value as the basis, PCACL undertakes to offer to CSA
                                         more favourable or the same transaction prices or charging scale that the former will
                                         offer to an independent third party.



		2.	The parties to the agreement unanimously agree that the amount
                                         of the subject matters of this agreement should not exceed the maximum amount of RMB250
                                         million per year.



 


		V.	Force majeure



		1.	If this agreement cannot be performed due to force majeure events,
                                         both parties shall not undertake responsibilities for the non-performance of this agreement,
                                         the agreement will be automatically terminated. If some parts of this agreement cannot
                                         be performed due to force majeure events, the corresponding duties of the party which
                                         has suffered the force majeure events will be waived according to the degree of impact
                                         of the force majeure events. For force majeure events which occur after the postponement
                                         of performance, the duties cannot be waived.



Force majeure events refer to objective situations
that cannot be foreseen, cannot be avoided and cannot be overcome, including but not limited to war, plague, strike, earthquake,
flooding etc.


		2.	If either party cannot perform the agreement due to force majeure
                                         events, it should notify the other party within 48 hours in time in order to reduce the
                                         losses brought to the other party, and should provide proof within 15 working days. If
                                         it is unable to notify and provide proof before the deadline with reasonable grounds,
                                         the time specified in this clause can be postponed according to the actual situations.



 




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		VI.	Responsibilities and compensation



		1.	If extra costs are incurred due to the mistakes of work of either
                                         party, the defaulting party must compensate the party which has not committed any faults
                                         for the actual losses incurred.



		2.	If either party breaches the provisions of this agreement and the
                                         supplementary agreements, this will constitute a breach, the defaulting party should
                                         undertake the default responsibilities.



 


		VII.	Termination of the agreement



This agreement will be terminated under any of the following
circumstances:


		1.	The agreement is terminated upon expiry;



		2.	It is terminated when a party is no longer eligible to perform
                                         the contract;



		3.	It is terminated when Party B fails to fulfil the conditions of
                                         the agency business agreed by both parties;



		4.	If a party breaches the agreement, the observant party has the
                                         right to terminate this agreement.



 


		VIII.	Resolution of disputes



All disputes arising from the signing or performing
of this agreement should first be resolved by amicable discussion by both parties. If the discussion fails, either party can institute
a law suit in a competent People’s Court.


 


		IX.	Other matters



		(1)	The validity period of this agreement is three years, it will
                                         be effective starting from 1 January 2014.



		(2)	Both parties will enter into a supplementary agreement on any
                                         matters not covered by this agreement, the supplementary agreement will have the same
                                         force and effect as this agreement;



		(3)	This agreement is prepared in quadruplicate, each of both parties
                                         retains two copies which are equally legally binding.



 




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Party A:


 


Authorized representative:


 


[signature & seal]


 


Party B:


 


Authorized representative:


 


[signature & seal]


 




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