Exhibit
10.2


 





Stock
Exchange Agreement


 


Party
A: Jingzhou City Jiulong Machinery Electricity Manufacturing Co., Ltd.


 


Party
B: China Automotive Systems, Inc. 


 


Party
C: Hubei Henglong Automotive System Group Co., Ltd.


 


In
view of:


 


		1.	Jingzhou
                                         Henglong Automotive Parts Co., Ltd. is a limited liability company legally
                                         established and validly existing in accordance with the laws and regulations
                                         in China, of which, 20% of the equity are owned by Jingzhou City Jiulong Machinery Electricity
                                         Manufacturing Co., Ltd. and 80% of the equity are owned by Hubei Henglong Automotive System
                                         Group Co., Ltd.



 


		2.	Shashi Jiulong
                                         Power Steering Gear Co., Ltd. is a limited liability company legally established
                                         and validly existing in accordance with the laws and regulations in China,
                                         of which, 19% of the equity are owned by Jingzhou City Jiulong Machinery Electricity
                                         Manufacturing Co., Ltd. and 81% of the equity are owned by Hubei Henglong Automotive System
                                         Group Co., Ltd.



 


		3.	China Automotive
                                         Systems, Inc. is a NASDAQ listed company, with a trading symbol of
                                         CAAS.



 


		4.	Hubei
                                         Henglong Automotive System Group Co., Ltd. is a wholly owned subsidiary of
                                         Hong Kong Great Genesis Holding Ltd., which in turn is a wholly owned subsidiary of China Automotive
                                         Systems, Inc.



 


		5.	China Automotive
                                         Systems, Inc. agrees to issue 4,078,000 shares of common stock of
                                         CAAS to Jingzhou City Jiulong Machinery Electricity Manufacturing Co., Ltd.
                                         (Party A), in exchange for Party A’s 20% of the equity holding in
                                         Jingzhou Henglong Automotive Parts Co., Ltd. and 19% of the equity holding in Shashi Jiulong
                                         Power Steering Gear Co., Ltd. Both parties agree to the provisions of this
                                         Stock Exchange Agreement.



 


		6.	Hubei
                                         Henglong Automotive System Group Co., Ltd., as another shareholder besides
                                         Party A in both Jingzhou Henglong Automotive Parts Co., Ltd. and Shashi Jiulong
                                         Power Steering Gear Co., Ltd., also agrees with this Stock Exchange Agreement.



 


		7.	The
                                         benchmark date of this agreement is June 30, 2014.



 


Both
parties agree to the following terms:


 


		1.	Party
                                         A agrees to exchange the due net assets equivalent to its 20% equity in
                                         Jingzhou Henglong Automotive Parts Co., Ltd. (including undistributed
                                         profits) for 3,260,000 shares of common stock of CAAS (to be issued by Party B to Party
                                         A), and exchange the due net assets equivalent to its 19% equity in Shashi Jiulong
                                         Power Steering Gear Co., Ltd. (including undistributed profits), for 818,000
                                         shares of CAAS common stock (to be issued by Party B to Party A).



 


		2.	Within
                                         60 days from the date of execution of this agreement, Party A shall complete
                                         all necessary examination and approval procedures stipulated under Chinese laws and regulations
                                         (if necessary); and Party B shall complete all necessary approval procedures relating
                                         to the stock issuance and register such shares in name of Party A or other holders designated
                                         by Party A, so that Party A or its designated holders will actually own and hold 4,078,000
                                         shares of CAAS.



 


		3.	After
                                         6 months holding period from the date that such 4,078,000 shares of CAAS are registered
                                         in name of Party A or its designees, Party B undertakes and warrants, upon receipt of
                                         notice from Party A, to remove the restrictions under Rule 144 on such shares and
                                         agrees that Party A may carry out transactions of such shares on Nasdaq stock market.



 






    	 



    	 



    

 


		4.	Within
                                         30 days from the date of execution of this agreement, Party A shall complete equity
                                         delivery to Party B or to an associated company or a wholly owned subsidiary designated
                                         by Party B. Party A shall return to Party B all the documents relevant to the equity
                                         and files relating to Party B in any aspect whatsoever, including, but not limited to
                                         the capital contribution certificates, and other relevant documents relating to the business
                                         of Party B.



 


		5.	Party
                                         A shall cooperate with Party B or Party C for the registration modification procedures
                                         with the relevant Administration of Industry and Commerce bureau regarding the swap of
                                         the equities in Jingzhou Henglong Automotive Parts Co., Ltd. and Shashi Jiulong
                                         Power Steering Gear Co., Ltd. according to the relevant Chinese laws.



 


		6.	Party
                                         A undertakes that there is no guarantee, mortgage, pledge, lien or
                                         any other security interest or any third party rights on the equity under
                                         this agreement. Such rights do not exist at the execution of this agreement, nor will
                                         it occur in any case after the signing of this agreement until the completion
                                         of the industrial and commercial registration modifications.



 


		7.	Obligations
                                         of Party A. After entry into force of this agreement, Party A shall exchange the
                                         equity under this agreement to Party B in accordance with the provisions of this
                                         agreement. Upon request of Party B, Party A shall provide all necessary assistance
                                         and convenience to complete the governmental approval procedures (if needed) relating
                                         to the exchange of the equity and perform other obligations under this agreement.



 


		8.	Party
                                         B's obligations. In accordance with the terms and conditions of this agreement and in
                                         the event that the conditions hereof are satisfied, Party B shall issue the shares to
                                         Party A and register such shares in the name of Party A in accordance with the provisions
                                         of this agreement; cooperate with Party A if necessary, to complete all the approval
                                         and registration procedures under this equity exchange agreement and fulfill
                                         all necessary internal procedures and perform all the other obligations under
                                         this agreement.



 


		9.	Liability
                                         for breach of contract. In the performance of this agreement, if a party
                                         breaches the contract, it shall be liable for the losses suffered by the other party
                                         arising from its defaults. If Party B fails to make Party A or its designees obtain
                                         and hold 4,078,000 shares of CAAS common stocks in accordance with the provisions
                                         of this agreement, or it fails to perform its obligation stipulated in Provision
                                         3 of this agreement, Party B shall be regarded as having breached the contract. Accordingly,
                                         Party B and Party C agree to return to Party A all the exchanged equity immediately
                                         and unconditionally, assist Party A in completing the registration modifications
                                         within 1 month, and Party C shall bear all the direct and indirect losses incurred
                                         by Party A.



 


		10.	In
                                         case of breach of the above-mentioned provision by Party B, Party B and
                                         Party C agree that Hubei Henglong Automotive System Group Co., Ltd shall, on
                                         behalf of Party B, be liable to Party A for breach of contract . And the
                                         three parties agree that any disputes arising from breach of contract shall be governed by
                                         the Jingzhou City Intermediate People's Court.



 


		11.	The
                                         execution of the agreement has been approved by each party’s shareholders' meeting
                                         or the board of directors meetings.



 


		12.	This
                                         agreement shall have legal effect upon execution of both parties; it shall have binding
                                         effect on both parties and Hubei Henglong Automotive System Group Co., Ltd.



 


		13.	Any amendment
                                         to this agreement shall be signed by the parties in writing. After entry
                                         into force of this agreement, any amendment to this Agreement shall come into
                                         effective only after approval by the original examination and approval authority should
                                         such an approval is required. If a registration is required, the amendment shall be appropriately
                                         registered with the relevant authorities.



 


		14.	This
                                         agreement shall be governed by Chinese laws. The parties agree that any disputes
                                         shall be submitted to the Jingzhou City Intermediate People's Court for
                                         litigation.



 






    	 



    	 



    

 


The
signature page:


 


Party
A: Jingzhou City Jiulong Machinery Electricity Manufacturing Co., Ltd.


 


Authorized
representative:


 





Party
B: China Automotive Systems, Inc.


 


Authorized
representative:


  


Party
C:Hubei Henglong Automotive System Group Co., Ltd.


 


Authorized
representative:


 


Date: 11
August 2014