EX-4.19 12 v375741_ex4-19.htm EXHIBIT 4.19

Land Lease Agreement

 

Date: 9 January 2014

 

In accordance with the legal and regulatory requirements under the "Law of Land Administration of the People’s Republic of China”, this contract regarding land leasing was entered between China Southern Air Holding Company and China Southern Airlines Company Limited on the basis of equality, voluntariness and consideration through friendly negotiation.

 

Chapter 1 General Provisions

 

Article 1 Parties of this contract:

 

Lessor: China Southern Air Holding Company (CSAHC) (hereafter named “Party A”)

Legal address: Guangzhou Baiyun International Airport

Postal code: 510406

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

Legal address: Guangzhou Economic and Technological Development Zone

Postal code: 510406

 

Article 2 Party A leases the land use right to Party B pursuant hereto. The ownership of the land covered shall be People’s Republic of China, and the land use rights thereof belong to Party A. Any underground resources, buried property and public utilities shall not be covered under the land use right granted hereunder.

 

Article 3 The legal rights of the use of land within the land use rights leased by Party B pursuant hereto and operating activities thereof are protected by the law of the State.

 

Chapter 2 Size, Term and Usage of the Leased Land

 

Article 4 Party A leases the land use right to Party B (see Appendix I for detailed description of the land). Transaction price was determined on a fair and reasonable basis and based on fair market rate, and will be no higher than the price and charging standard offered by other independent third parties.

 

Article 5 The land leased pursuant hereto shall be used for air transportation and auxiliary service facilities and welfare benefits. Any changes to the land usage as stipulated herein within the lease term shall be subject to approval of Party A.

 

Article 6 The term of the land use rights leased hereunder shall be 3 years effective from 1 January 2014.

 

Chapter 3 Rental Payments

 

Article 7 Party B agrees to pay Party A an annual rental of RMB 63,582,200 each year. Rental payment, provided by Party B to Party A on a quarterly basis, shall be settled within 15 days from the start date of the first month of each quarter by bank remittance. Within 5 days upon receipt of payment, Party A shall issue a receipt of the respective amount.

 

Article 8 Party B shall remit the rental payment to the bank account of Party A on or before the respective required payment date. Should there be any changes to the bank account, Party A shall notify Party B in written form within 10 days after such changes. Party B shall not be liable for any delay in payment(s) arising from late payment(s) due to failure to give timely notice.

 

 
 

 

Article 9 Should there be any laws, regulations or administrative orders requiring to contribute, fully or partially, the rental payments received by Party A from Party B, Party A shall be liable to comply such laws, regulations or administrative orders. In the event of any loss(es) in Party B arising from violation of Party A of the forementioned requirements, Party A shall fully compensate Party B on such loss(es).

 

Chapter 4 Agreed Terms

 

Article 10 So far as Party A is entitled to the land use rights of the land and there is no breaches by Party B on the obligations hereunder, Party A shall be obligated to lease such land use rights to Party B and shall not retrieve or reject to enter into the Land Lease Agreement for any reasons.

 

Article 11 Party A agrees that land leased by Party B can be used by Party B and its wholly-owned subsidiaries and investment companies within the scope of usage as stipulated by this contract.

 

Article 12 Given the historical reason for the land, should Party A be unable to continue fulfilling its obligation hereunder due to special causes such as government orders or urban planning, Party A may elect an early termination or amendment of this contract to fully or partially resume the land leased hereunder, subject to an obligation of Party A to compensate Party B on the properties on the resumed land and the direct financial loss(es) of Party B arising from redemption of the land on termination of this contract according to relevant requirements of the Government.

 

Article 13 Any change of the lease type stipulated herein to transference by Party B during the lease term shall be subject to prior approval of Party A and in such case, procedures and amendments in the land use rights registration shall be approved in accordance to relevant regulations. In the event of unilateral termination or amendments on this contract by Party B, Party B shall be liable to compensate the direct financial loss(es) of Party A.

 

Article 14 Party B guarantees to Party A on usage of land strictly in accordance to relevant laws and regulations of the Government. Land leased by Party B shall not be transferred, subleased or pledged without approval of Party A. In the event of any loss(es) of Party A arising from the misuse of land of Party B, Party B shall provide compensation.

 

Article 15 Party B accepts the commission by Party A, according to the relevant provisions of the local tax authorities to declare and pay property taxes and tenure taxes. The tax payment is borne by Party A. The property taxes are settled on quarterly basis and tenure taxes are settled on yearly basis. Party A shall refund to Party B within 15 working days upon receipt of the duty-paid original certificate and tax return statement of assets provided by Party B.

 

Chapter 5 Usage of Land

 

Article 16 Land hereunder, upon leasing, shall be used by Party B on purposes related to air transportation business and other auxiliaries in accordance to the land use specified by the State.

 

Article 17 Any addition of general housings or buildings by Party B on the leased land shall be subject to requirements of urban planning and general planning of land use and the prior approval in written form from Party A. Approval procedures with authorities shall be gone through by Party B with necessary assistance from Party A. Party A confirms that the ownership of the buildings added on the leased land shall belong to Party B, and, upon expiration and where Party B determined not to extend this contract, belong to Party A albeit appropriate compensation with specific amount to be negotiated otherwise between both parties shall be made from Party A to Party B.

 

 
 

 

Article 18 Any change(s) by Party B on the usage of the leased land shall be subject to requirements of urban planning and general planning of land use and the Land Lease Agreement has to be signed again according to the changed land usage upon the approval from Party A.

 

Chapter 6 Expiration

 

Article 19 Should a party require to continue the use of the land after expiration of this contract, the party shall submit extension application to Party A 60 days prior to the expiration date and enter into a renewed contract with Party A.

 

Chapter 7 Force Majeure

 

Article 20 None of the parties shall be legally liable to the failure to perform obligations hereunder, whether partially or fully, due to force majeure. Notwithstanding the above, both parties shall perform all necessary remediation measures to reduce the loss arising from force majeure. The party affected by force majeure shall report the situation to the other party within 15 days after such event and provide proof of such force majeure event to the relevant government authority.

 

Chapter 8 Breach of Contract

 

Article 21 Failure to perform the requirements hereunder shall be regarded as a breach of the contract. The breaching party shall be liable for compensation on the direct financial loss(es) of the other party.

 

Article 22 In the event of failure of Party B to provide timely rental payment, the party shall pay an overdue fine, initially equivalent to 0.04% of the amount of the land rental payment, until the party completely settled the payment of such installment.

 

Chapter 9 Applicable Legal and Dispute Resolutions

 

Article 23 Resolutions on the entering, effect, explanation, performance and dispute hereof shall be protected and governed by the law of the People’s Republic of China.

 

Article 24 Any dispute arising from this contract shall be resolved by negotiation of the disputing parties. Either party shall have the right to prosecute a lawsuit in the people’s court upon failure of resolving by negotiation.

 

Chapter 10 Supplementary Provisions

 

Article 25 This contract shall not be transferred. Notwithstanding, in case of restructuring, merger and division of either party, this contract shall continue to be performed by the new organization(s) entitled to the rights hereunder after the restructuring, merger and division upon issuance of written notice to the other party and entering of contractual agreements.

 

Article 26 This agreement shall be made out in quadruplicate with each party holding two copies of each. The contract shall take effect upon signature and seal.

 

Article 27 For issues not stipulated in this contract, it may be included as the annex of this contract upon the negotiation of both parties. The annex of this contract and this contract are equally valid.

 

 
 

 

Party A: Party B:
China Southern Air Holding Company China Southern Airlines Company Limited
Authorized representative: Authorized representative:

 

 
 

 

List of assets      Unit: RMB0’000 
Type of assets :  Shares leased assets   Airline catering services leased assets 
Total land rent:   6042.5664    315.6534 
Total property rent:   3327.7024    338.7242 
Total building rent:   156.4078    0.3465 
Total pipelines and trenches rent:   188.2898    0 
Total rent sub-total   9714.9664    654.7241 
Total rent(gross) :        10369.6905 

 

 
 

 

Breakdown of Real estate lease rental project of China Southern Group : Shares leased land Exhibit 1

 

Breakdown of Real estate lease rental project of China Southern Group : Shares leased assets

 

No  Asset no.  Parcel name  Land users
at
valuation
date		  Land use rights
certificate number		  Location of parcel  Registration
purpose at
valuation
reference date		  Actual
development
progress at
valuation
reference date		  Remaining
useful life
of the land		   Land area
(m2)		   Total net income
(RMB0’000/year)		   Land use tax
unit price
(RMB0’000/
year)		   Land use tax
(RMB0’000/year)		   Business
tax rate		   Management
Fee Rate		   Land
reference
annul lease
rent
(RMB0’000/
year)		 
1  DXJ004  Airport Service Area  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008712  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    72534.82    255.5914    1.5    0.0059    5.5%   2.5%   277.8232 
2  DXJ006  Ground Service Company 1 (Special Garage)  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008714  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    39515.44    139.241    1.5    0.0059    5.5%   2.5%   151.3553 
3  DXJ007  Ground Service Company 2 (Ferry Garage)  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008715  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    2863.99    10.0918    1.5    0.0059    5.5%   2.5%   10.9758 

 

 
 

 

4  DXJ013  Cargo Warehouse  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008715  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    33792.16    119.0735    1.5    0.0059    5.5%   2.5%   129.4341 
5  DXJ008  Airport Materiel Area  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008716  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    34757.01    122.4736    1.5    0.0059    5.5%   2.5%   133.1299 
6  DXJ001  Cultural Centre  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008709  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    20599.43    72.4454    1.5    0.0059    5.5%   2.5%   78.7514 
7  DXJ009  Expert Building  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008717  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    1575.94    5.553    1.5    0.0059    5.5%   2.5%   6.0423 
8  DXJ010  Cabin  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008753  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    6981.95    24.602    1.5    0.0059    5.5%   2.5%   26.7477 

 

 
 

 

9  DXJ003  Flight Division 1  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008711  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    32989.14    116.2436    1.5    0.0059    5.5%   2.5%   126.3582 
10  DXJ002  Flight Division 2  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008710  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    9969.82    35.1311    1.5    0.0059    5.5%   2.5%   38.1924 
11  DXJ012  Training Centre  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008728  No. 46
Yingbin Road, Xinshi District		  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    71748.97    252.822    1.5    0.0059    5.5%   2.5%   274.8129 
12  DXJ005  New Terminal  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008713  No. 46 Yingbin Road, Xinshi District  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    215715.2    760.117    1.5    0.0059    5.5%   2.5%   826.2205 
Xinjiang sub-total                    543003.8700    1913.3854                        2079.8437 
13  DHEB008  Integrated office area  China Southern Airlines Company Limited  Hagoyong (2007) No 37764  No. 34 Ganshui Road, Xiangfang District, Harbin  Office  Outside parcel red line “Liu Tong” and area inside red line “smooth”   29.48    1854.95    52.1377    18.0000    0.0531    5.5%   2.5%   56.7291 

 

 
 

 

14  DHEB007  Training Centre  China Southern Airlines Company Limited  Hagoyong (2004)
No 16103		  No. 89 Changjiang Road, Nangang, Harbin  Education  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    360.6    10.1337    14.0000    0.0700    5.5%   2.5%   11.0910 
15  DHEB005  Flight Building Office  China Southern Airlines Company Limited  Hagoyong (2004) No 16342  Yiqing Street, Nangang District, Harbin  Land for
agencies and organizations		  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    1584.3    44.5237    14.0000    0.0700    5.5%   2.5%   48.4714 
16  DHEB006  Cabin Office  China Southern Airlines Company Limited  Hagoyong (2004) No 16346  Heping Road, Nangang District, Harbin  Land for
agencies and organizations		  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    1882.8    52.6514    18.0000    0.0900    5.5%   2.5%   57.3276 
17  DHEB004  Airport Maintenance 1  China Southern Airlines Company Limited  Hagoyong (2004) No 16344  Baijiagang Airport, Daoli District  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    128206.5    641.3741    2.0000    0.0100    5.5%   2.5%   697.1566 
18  DHEB001  Airport Maintenance 2  China Southern Airlines Company Limited  Hagoyong (2004) No 16345  Baijiagang Airport, Daoli District  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    102000    510.2716    2.0000    0.0100    5.5%   2.5%   554.6539 

 

 
 

 

19  DHEB002  Airport Material Area  China Southern Airlines Company Limited  Hagoyong (2004) No 16347  Baijiagang Airport, Daoli District  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    22230.6    111.212    2.0000    0.0100    5.5%   2.5%   120.8935 
20  DHEB003  Airport Services and Catering  China Southern Airlines Company Limited  Hagoyong (2004) No 16349  Baijiagang Airport, Daoli District  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    9751.9    48.7858    2.0000    0.0100    5.5%   2.5%   53.0389 
Harbin                    267871.6500    1471.0900                        1599.3620 
21  DCC002  Agency office  China Southern Airlines Company Limited  Hagoyong (2004) No 010500021  No.5038, Jilindadao, Erdao District (Economic and Technological Development Zone), Changchun  Business  Outside parcel red line “Liu Tong” and area inside red line “smooth”   27.4    7930.3    95.0977    6.0000    0.0164    5.5%   2.5%   103.3849 
22  DCC003  Erdao Office Area  China Southern Airlines Company Limited  Hagoyong (2004) No 10500003  1 Gongli, Jixiang Road, Erdao District, Changchun  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   40.13    57146    537.4347    6.0000    0.0241    5.5%   2.5%   594.1943 
Changchun sub-total                    65076.3000    632.5324                        687.5792 

 

 
 

 

23  DCY001  Camp  China Southern Airlines Company Limited  Zhaoyangguoyong (2004) Zidi  No. 58, Section 4, Chaoyangdajie  Land for transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    31226.67    139.1141    4.0000    0.0200    5.5%   2.5%   151.2327 
Zhaoyang sub-total                    31226.6700    139.1141                        151.2327 
24  DDL002  Office and hotel  China Southern Airlines Company Limited  Daguoyong (2004) Zi No 04001  No. 65, Yingke Road, Jichangjianjiedao, Ganjingzi  Land for business services  Outside parcel red line “Liu Tong” and area inside red line “smooth”   40    14403.4    621.4499    6.0000    0.0240    5.5%   2.5%   675.5151 
Dalian sub-total                    14403.4000    621.4499                        675.5151 
25  DSY011  Youth Hostel  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02508  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    1332.32    5.9133    2.0000    0.0100    5.5%   2.5%   6.4384 
26  DSY004  Cargo Area  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02505  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    17135.56    76.0585    2.0000    0.01000    5.5%   2.5%   82.6832 

 

 
 

 

27  DSY012  Measure and catering area  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02506  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    11412    50.6536    2.0000    0.0100    5.5%   2.5%   55.0691 
28  DSY001  Airport Material Area  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02502  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    14192.63    62.996    2.0000    0.0100    5.5%   2.5%   68.4848 
29  DSY015  Office Building  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02509  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    6971.394    30.9438    2.0000    0.0100    5.5%   2.5%   33.6454 
30  DSY002  Airport Services Area  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02507  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    54634.13    242.5008    2.0000    0.0100    5.5%   2.5%   263.5987 
31  DSY003  Parking apron  China Southern Airlines Company Limited  Donglingguoyong (2004) No 02501  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    14518.87    64.4436    2.0000    0.0100    5.5%   2.5%   70.0583 

 

1
 

 

32  DSY006  Parking apron  China Southern Airlines Company Limited  Donglingguoyong (2004)
No 02503		  Xiantao Town, Dongling District, Shenyang  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    13397.5    59.4663    2.0000    0.0100    5.5%   2.5%   64.6482 
33  DSY008  Computer Center  China Southern Airlines Company Limited  Shenyangguoyong (2004) No 0342  No. 388
Qingniandajie, Heping District, Shenyang		  Land for scientific research and design  Outside parcel red line “Liu Tong” and area inside red line “smooth”   40    4545.7    150.4611    5.0000    0.0200    5.5%   2.5%   163.5664 
34  DSY009  Boiler Room  China Southern Airlines Company Limited  Shenyangguoyong (2004) No 0103  No. 388
Qingniandajie, Heping District, Shenyang		  Residential  Outside parcel red line “Liu Tong” and area inside red line “smooth”   30    5156.5    37.5589    5.0000    0.0150    5.5%   2.5%   40.8412 
Shenyang sub-total                 143296.6040    780.9959                        849.0337 
Shares leased assets                 1064878.4940    5558.5677                        6042.5664 

 

 
 

 

Breakdown of Real estate lease rental project of China Southern Group : Airline catering services leased assets Exhibit 2

 

Breakdown of Real estate lease rental project of China Southern Group :Airline catering services leased assets

 

No  Asset no.  Parcel name  Land users at
valuation date		  Land use rights
certificate number		  Location of
parcel		  Registration
purpose at
valuation
reference date		  Actual
development
progress at
valuation
reference date		  Remaining
useful life
of the land		   Land area
(m2)		   Total net income
(RMB0’000/year)		   Land use tax
unit price
(RMB0’000/
year)		   Land use tax
(RMB0’000/year)		   Business
tax rate		   Management
Fee Rate		   Land reference
annul lease
rent
(RMB0’000/
year)		 
1  DXJ011  Xinjiang Airport Catering  China Southern Airlines Company Limited  Niaoguoyobg (2004) No 0008754  No. 46
Yingbin Road, Xinshi District		  Transportation  Outside parcel red line “Liu Tong” and area inside red line “smooth”   39.26    14269.36    50.2813    1.5    0.0059    5.5%   2.5%   54.6600 
2  DHEB004  Heilongjiang Airoport Catering  China Southern Airlines Company Limited  Haguoyong (2004)
No 16344		  Baijiagang Airport, Daoli District  Land for Beiji International Trade  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    6962    34.8282    2    0.0100    5.5%   2.5%   37.8676 
3  DLD001  Dalian Beiji Trade Building  Dalian Baoshui District Beiji International Trading Company Limited  Baoshuiquguoyong (01) Zi No 4002  Storage and processing area, Baoshui District, Dalian  Civil Airport  Outside parcel red line “Liu Tong” and area inside red line “smooth”   50    7752    205.2457    6    0.0300    5.5%   2.5%   223.1258 
Airline catering services leased assets sub-total                 28983.3600    290.3552                        315.6534