DaFa Properties Group Limited commenced the offer to exchange for at least $166,050,000, or 90%, of the outstanding principal amount of the Existing Notes (the "Minimum Acceptance Amount") upon the terms and subject to the conditions set forth in the Exchange Offer and Consent Solicitation Memorandum. In conjunction with the Exchange Offer, the Company is also soliciting from the Holders consents to the Proposed Waivers and Amendments. The Exchange Offer, once consummated, and the Proposed Waivers and Amendments, once adopted and effected, will extend their debt maturity profile, strengthen their balance sheet and improve cash flow management. As of the date of this announcement, the outstanding principal amount are $184,500,000 under the Existing Notes. Once the Proposed Waivers and Amendments become effective and operative, non-tendering Holders of the Existing Notes will not be entitled to the benefit of substantially all of the restrictive covenants and certain events of default or other provisions under the Existing Notes Indenture in relation to their Existing Notes, and all Holders of the Existing Notes will be bound by the provisions of the Supplemental Indenture. During the latter half of 2021, Chinese property developers and the capital markets that have funded growth and development of the sector have experienced a turning point. Reduced bank lending for real estate development has adversely affected access by property developers to onshore capital. Reduced bank lending for mortgage finance for buyers, combined with buyers' concern about the ability of property developers to complete projects, has adversely affected property sales. In addition, the use of pre-sale proceeds is also restricted under the applicable PRC laws. Negative reaction to these onshore events by offshore capital markets has curtailed the Company's funding sources to address upcoming maturities. Despite the adverse market environment, as of the date of the Exchange Offer and Consent Solicitation Memorandum, the Company is not in breach of any of its debt obligations. The Company is offering Eligible Holders of the Existing Notes an opportunity to exchange their Existing Notes for New Notes with an extended maturity and terms designed to allow the Company to improve its financial condition and stability. If the Exchange Offer and Consent Solicitation are not successfully consummated, the Company may not be able to fully redeem the Existing Notes upon maturity on January 18, 2022. The Exchange Offer and Consent Solicitation for the Existing Notes commenced on January 6, 2022 and will expire at 4:00 p.m., London time, on January 12, 2022 (the "Expiration Deadline"), unless otherwise extended or earlier terminated by the Company. Eligible Holders of the Existing Notes validly accepted and exchanged in the Exchange Offer and Consent Solicitation will, from and including the Settlement Date, waive any and all rights with respect to the Existing Notes (other than the right to receive the Exchange and Consent Consideration) and will release and discharge the Company from any and all claims such holders may have, now or in the future, arising out of or related to such Existing Notes, including any and all accrued and unpaid interest thereon. Any tendering Eligible Holder must tender its entire holding of Existing Notes for exchange. The Proposed Waivers will become effective upon receipt of Requisite Consents, and the Proposed Amendments will become effective upon execution of the Supplemental Indenture. The Proposed Waivers and Amendments will not become operative until the payment of Cash Consideration has been made and the Exchange Offer and Consent Solicitation have been consummated. If the Proposed Waivers and Amendments are accepted and effected, Existing Notes that are not tendered and accepted pursuant to the Exchange Offer will be subject to the Proposed Waivers and Amendments. A separate instruction needs to be submitted per each beneficial owner of the Existing Notes held through Euroclear and Clearstream. Instructions in connection with the Exchange Offer and Consent Solicitation are irrevocable. The Proposed Waivers and Amendments would waive any potential breaches that may arise as a result of the events described in "Background and Purpose of the Exchange Offer and Consent Solicitation" and remove substantially all of the restrictive covenants including but not limited to those described in the announcement made on the Stock Exchange by the Company on January 19, 2021 in connection with the issuance of the Existing Notes. The total Exchange and Consent Consideration for each $1,000 principal amount of the Existing Notes validly tendered prior to the Expiration Deadline and accepted for exchange (the "Exchange and Consent Consideration") shall be a purchase price equal to: (i) $40 principal repayment (the "Upfront Principal Payment") in cash; (ii) $10 in cash ("Cash Consideration"); (iii) $960 in aggregate principal amount of the USD denominated Senior Notes due 2022 (the "New Notes"); and (iv) any Accrued Interest (paid in cash, rounded to the nearest $0.01, with $0.005 rounded upwards). The New Notes will mature on June 30, 2022. The New Notes will bear interest at 12.5% per annum payable upon the maturity date. The minimum aggregate principal amount of the Existing Notes, being $166,050,000, or 90%, of the outstanding principal amount of the Existing Notes, for which valid tenders are received and that the Company will determine, in its sole discretion, whether it will accept for exchange pursuant to the Exchange Offer and Consent Solicitation. In the event that the final acceptance rate is below 90%, the Exchange Offer and Consent Solicitation shall lapse automatically.