THIS ESCROW AGREEMENT (this “ Agreement ”) is entered into this 15th day of February, 2008,
by and among Lehman Brothers Commercial Corporation Asia Limited, a Hong Kong company (“ LBCCA ”),
YA Global Investments, L.P., a Cayman Islands limited partnership (“ YAGI ” and, together with LBCCA, the “
Purchasers ”), China Automotive Systems, Inc., a Delaware corporation (the “ Company ”), and U.S. Bank
National Association, a national banking association, as escrow agent hereunder (the “ Escrow Agent ”).
Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the
Purchase Agreement (as defined below).
WHEREAS, the Purchasers and the Company have entered into that certain Securities Purchase
Agreement, dated as of February 1, 2008 (the “ Purchase Agreement ”), pursuant to which the Purchasers
agreed to purchase certain securities of the Company; and
WHEREAS, pursuant to the terms of the Purchase Agreement, an amount equal to $17,500,000 (the “
Deposit Amount ”) that would have otherwise been paid by the Purchasers to the Company in connection with
the transactions contemplated by the Purchase Agreement is to be paid by the Purchasers to the Escrow Agent
and held in escrow (the “ Escrow Account ”), pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein and
other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Receipt of Escrow . By its signature below, the Escrow Agent acknowledges receipt of funds
from the Purchasers in an amount equal to the Deposit Amount (together with the investment return thereon, the “
Escrow Amount ”).
Investment of Escrow .
The Escrow Amount shall be invested by the Escrow Agent in First American Prime
Obligation Fund - Class Y, or as otherwise directed by