CONFIDENTIAL

Protected Document

🛡️ STRICTLY CONFIDENTIAL

❌ Incorrect password. Please try again.

⚠️ Warning: 3 attempts remaining. Document will lock after failed attempts.
⏱️ Session will expire in 60 seconds. Click anywhere to extend.
CONFIDENTIAL
STRICTLY CONFIDENTIAL DRAFT - FOR DISCUSSION ONLY

PPP-BOT Concession for AI_DC

HEART AI Hyperscale Data Center | 100% Private Equity Structure | 0% Government Equity Stake

✅ PPP Shell: $2.5B-$2.75B ❌ GPU/IT: ~$3.8B (Outside PPP) 📋 25-Year Concession 🏛️ Government as Counterparty Only

⚠️ CRITICAL: Project Structure Uniqueness

This project operates with 100% private equity and 0% government equity stake. The Vietnamese Government participates solely as a Counterparty (not as Shareholder) under PPP Law 64/2020 and Decree 180/2025.

✅ PPP NEGOTIATION SCOPE

$2.5B - $2.75B

Shell Infrastructure Model

  • Negotiation Partner: Vietnamese Government
  • Contract Type: 25-Year Concession
  • Asset Transfer: To Government at Year 25
  • Revenue Guarantee: Eligible
  • IFRIC 12: Intangible Asset

❌ OUTSIDE PPP SCOPE

~$3.8B

GPU/IT Equipment Model

  • Negotiation Partner: HEART (PPP Contract Party)
  • Contract Type: Separate Agreement
  • Asset Transfer: NOT to Government
  • Revenue Guarantee: NOT Applicable
  • Government Involvement: None

📊 Investment Scope Comparison Matrix

Criteria PPP Scope (Shell) Outside PPP (GPU/IT)
Investment Amount $2.5B - $2.75B ~$3.8B
Contract Type Government Concession (PPP Contract) Separate Investment Agreement
Investor Entity HEART (PPP Project Company) Third-party Investors
Negotiation Counterparty Vietnamese Government HEART (PPP Contract Party)
Asset Ownership at Concession End Transferred to Government (Year 25) Retained by Third-party Investor
Depreciation Period 25-40 years (Concession-based) 3-7 years (Technology lifecycle)
IFRIC 12 Application ✅ Applied (Intangible Asset) ❌ Not Applied
Government Involvement Direct Contract Party No Involvement
Revenue Guarantee ✅ Eligible (Decree 180 Art.17) ❌ Not Applicable
$2.75B
PPP Shell Investment
~$3.8B
GPU/IT Investment
25 Years
Concession Period
0%
Government Equity

✅ PPP Scope: Shell Infrastructure ($2.5B-$2.75B)

Category Components Investment Depreciation
1. Land & Buildings Land use rights, structures, foundations $700M-$800M 25-40 yrs
2. Power Infrastructure Transformers, UPS, generators, switchgear $550M-$650M 15-25 yrs
3. Cooling Infrastructure Chiller plant, cooling towers, piping $400M-$450M 15-20 yrs
4. Network Backbone Fiber optic backbone, cross-connect, ducts $250M-$300M 15-20 yrs
5. Security Infrastructure Fencing, CCTV, access control $50M-$55M 10-15 yrs
6. Contingency Construction reserve, working capital $450M-$500M N/A
TOTAL PPP SCOPE $2.5B-$2.75B -

❌ Outside PPP: GPU/IT Equipment (~$3.8B)

Category Components Investment Ownership
1. GPU/Server Equipment NVIDIA H100/B200, DGX systems $2.5B-$2.8B Third-party
2. Storage Systems SSD arrays, NVMe, SAN infrastructure $400M-$500M Third-party
3. Network Equipment Switches, routers, load balancers $200M-$250M Third-party
4. Operating Software DCIM, monitoring, orchestration $100M-$150M License
5. AI Algorithms & IP Proprietary AI models, training data Customer Asset Customer
6. Customer Data PII, business data, inference results Customer Asset Customer
TOTAL OUTSIDE PPP ~$3.8B -

🔄 Investment Flow Structure

Vietnamese Government

Counterparty Only
(0% Equity)

→

PPP Concession

$2.5B-$2.75B

→
HEART

PPP Project Company
(100% Private Equity)

→

Separate Agreement

~$3.8B

→
Third-party GPU Investors

SPV / Hyperscaler
(No Govt Involvement)

📌 Key Distinction: GPU Investment Options

  • Option A - GPU SPV Lease Model (Recommended): Separate SPV owns GPUs, provides 5-year operating lease to HEART. Technology obsolescence risk transferred to SPV/Lessor. (Reference: Applied Digital-Macquarie $5B deal)
  • Option B - Hyperscaler Direct Investment: AWS, Azure, CoreWeave directly invest in GPU fleet. HEART provides Shell infrastructure only with Take-or-Pay long-term contracts.
  • Option C - Joint Venture Model: HEART + GPU investors establish separate legal entity for GPU operations. Revenue/risk sharing arrangement.

💰 PPP Scope Capital Structure ($2.5B-$2.75B)

Funding Source Amount % Terms
EQUITY (100% Private, 0% Government)
Choice (Sponsor) $337M-$412M 50% Lead Investor
Strategic Partners $337M-$412M 50% Co-Investors
Subtotal Equity $675M-$825M 27-30% -
DEBT
Senior A (DFI/ECA) $675M-$742M 27% 15yr, 5.0% (IFC/ADB/JBIC)
Senior B (Commercial) $550M-$605M 22% 12yr, 6.0% (Take-or-Pay backed)
Mezzanine Debt $325M-$357M 13% 10yr, 8.0% (Infra funds)
Contingency Reserve $275M-$302M 11% Working capital
Subtotal Debt $1.75B-$2.0B 70-73% -
TOTAL PPP FUNDING $2.5B-$2.75B 100% D/E: 70/30

💰 Outside PPP Capital Structure (~$3.8B)

Funding Source Amount % Terms
THIRD-PARTY EQUITY
GPU Specialist Investors $570M-$760M 15-20% GPU-focused funds
Hyperscalers / Infra Funds $570M-$760M 15-20% Strategic partners
Subtotal Equity $1.14B-$1.52B 30-40% -
THIRD-PARTY DEBT
Equipment Financing ~$1.9B 50% 5-7yr, variable (GPU collateral)
Mezzanine / Subordinated ~$760M 20% 5yr, 8-10%
Subtotal Debt $2.28B-$2.66B 60-70% -
TOTAL GPU/IT FUNDING ~$3.8B 100% D/E: 65/35

🏛️ Government Non-Equity Contribution (PPP Scope Only)

Contribution Type Value Mechanism Period
Land Provision (In-kind) $30M-$100M Land lease fee waiver as consideration 50 years
Infrastructure Subsidy $20M-$50M Power substation, road, utilities Construction phase
Availability Payment $15M-$40M/year Government cloud service payments (VND, CPI-linked) 25 years

📌 Critical Note: Government is NOT an Equity Investor

Even though the government provides land and subsidies, these are treated as contractual contributions, not equity investments. Private investors retain 100% equity ownership of HEART (PPP Project Company). Government receives compensation through land lease fee waivers and revenue sharing arrangements, NOT through dividends.

📊 Target Financial Metrics Comparison

Metric PPP Scope (Shell) Outside PPP (GPU) Remarks
Equity IRR (USD) 18-24% 25-40% GPU: Higher risk/return
Project IRR 28-32% 35-45% Technology risk premium
DSCR (Average) 1.40x-1.60x 1.20x-1.40x GPU: Shorter recovery
Payback Period 12-15 years 4-6 years GPU lifecycle-based

💵 Shell Model Revenue (Stabilization Y6+)

Revenue Category Private Share Govt Share Annual Revenue
Co-location Services 100% 0% $150M-$200M
Power Pass-through 100% 0% $130M-$150M
Availability Payment 100% 0% $30M-$50M
Interconnection 100% 0% $10M-$20M
TOTAL SHELL REVENUE $310M-$400M/yr

💵 GPU Model Revenue (Stabilization Y6+)

Revenue Category Third-party Share HEART Share Annual Revenue
GPU Cloud Services Per Agreement Per Agreement $400M-$600M
AI/ML Platform Per Agreement Per Agreement $50M-$100M
Training/Inference Per Agreement Per Agreement Included above
TOTAL GPU REVENUE Split negotiated $450M-$700M/yr

📈 Total Project Potential Scale

Segment Investment Negotiation Partner Government Involvement
PPP Scope (Shell) $2.5B-$2.75B Vietnamese Government ✅ Direct Contract
Outside PPP (GPU/IT) ~$3.8B HEART (PPP Company) ❌ No Involvement
TOTAL POTENTIAL $6.3B-$6.55B - -

⚖️ PPP Scope Risk Allocation (Government ↔ HEART)

Risk Category Government HEART Shared
Land Acquisition ●
Permits & Approvals ●
Grid Connection ●
Construction Cost/Schedule ●
Operating Performance ●
Regulatory Change ●
FX Risk ●
Force Majeure ●

⚖️ Outside PPP Risk Allocation (HEART ↔ Third-party)

Risk Category HEART Third-party Shared
GPU Technology Obsolescence ●
GPU Equipment Failure ●
AI Demand Fluctuation ●
Software Licensing ●
Cybersecurity ●
Customer Data Protection ●

⚠️ Critical: Outside PPP Risk Has No Government Involvement

All risks related to GPU/IT investments (~$3.8B) are allocated solely between HEART and third-party investors. The Vietnamese Government bears NO risk and provides NO guarantee for GPU/IT equipment, technology obsolescence, or AI market demand.

🔄 PPP Asset Transfer (Year 25)

✅ Transferred to Government (Free of Charge)

  • Data center facilities (buildings, MEP)
  • Power infrastructure
  • Cooling infrastructure
  • Network backbone
  • Land use rights (returned to owner)
Settlement Item Treatment
PPP Asset Equity Value $0 (Free transfer condition)
Outstanding Debt HEART responsibility (must be fully repaid)
Performance Bond Conditional refund
Unpaid Availability Payment Government must settle
Asset Condition "Good Working Condition" required

🔄 GPU/IT Asset Treatment (Year 25)

❌ NOT Transferred to Government

  • GPU/Server equipment → Third-party retains ownership
  • Storage/Network equipment → Third-party retains ownership
  • Software licenses → Separate negotiation
  • Customer data/IP → Customer ownership
Option Description
Option A: Withdrawal Third-party removes equipment, ends contract with HEART. No government involvement.
Option B: Re-contracting Government selects new operator post-concession. New operator negotiates with third-party.
Option C: Asset Sale Third-party sells equipment to government or new operator at negotiated residual value.

📋 Contract Structure Hierarchy

Tier Contract Type Parties Scope
Tier 1
PPP Core		 PPP Contract (Master Agreement) Government ↔ HEART Exclusive rights, KPIs, Transfer conditions
Land Lease Agreement Provincial Authority ↔ HEART 50-year lease, fee waiver terms
Tier 2
Revenue		 Availability Payment Agreement
Revenue Guarantee Letter		 Government ↔ HEART
MOF ↔ HEART		 Payment mechanism, guarantee terms
Tier 3
Private		 Shareholders Agreement
JV Agreement (if applicable)		 HEART Shareholders Governance, exit rights (No government)
Tier 4
Finance		 Loan Agreement
Security Agreements
Direct Agreement		 HEART ↔ Lenders
Government ↔ HEART ↔ Lenders		 Debt terms, collateral, step-in rights
Tier 5
Outside PPP		 GPU Investment Agreement
Equipment Lease Agreement
Service Level Agreement
Revenue Sharing Agreement		 HEART ↔ Third-party
(No Government)		 GPU investment terms, lease conditions, SLA, revenue split

📚 Legal References

Legislation Key Articles Relevance
Decree 180/2025/NĐ-CP Article 17 State Co-Investment up to 70% → This project: 0%
PPP Law 64/2020/QH14 Article 65 Governing Law - Vietnamese Law mandatory for PPP Contract
Decree 243/2025/NĐ-CP Articles 44-46 Termination Compensation provisions

📌 Key Legal Principles

  • Decree 180 Art.17: "Government may co-invest up to 70%" → This project elects 0%
  • Revenue Sharing: "Core Data Center Services: 0% Public Share (if no state co-investment)"
  • Land Contribution: "Land contribution is NOT equity; treated as lease fee waiver or revenue sharing"

✅ PPP Contract Must-Have Clauses

A. Exclusivity Protection

  • ☐ No competing project within 100km radius
  • ☐ Government prohibition on similar projects (25 years)
  • ☐ Anchor tenant contract protection (no government interference)

B. Revenue Stability

  • ☐ 3-year 100% Revenue Guarantee (Decree 180 Art.17)
  • ☐ Additional 2-4 years at 90% Revenue Floor
  • ☐ Availability Payment CPI linkage (CPI + 2-3%)
  • ☐ Take-or-Pay clause (minimum government cloud usage)

C. Government Contribution Maximization

  • ☐ Land lease fee waiver (10yr 100%, 10yr 50%)
  • ☐ Infrastructure subsidies (power, fiber, roads)
  • ☐ Tax incentives (max 13yr: 4yr exempt + 9yr 50%)
  • ☐ Fast-track permits (all approvals within 6 months)

D. Exit Protection

  • ☐ Early termination: FMV + Lost Profits compensation
  • ☐ Lender Step-in Rights (90-180 day cure period)
  • ☐ Transfer condition relaxation ("Reasonable Wear and Tear")
  • ☐ Concession extension option (5-10yr on performance)

❌ Exclude from PPP Negotiation

Items to Exclude from PPP Scope

  • ✗ GPU/IT Equipment: Completely exclude from PPP, negotiate separately with third-party
  • ✗ Technology Obsolescence Risk: Cannot transfer to government, third-party responsibility
  • ✗ AI Demand Risk: No government guarantee, market risk
  • ✗ Software Licenses: Outside PPP contract scope

🎯 Negotiation Strategy

  • With Government: Present only Shell Infrastructure ($2.5B-$2.75B) as PPP scope. Mention GPU/IT as "future expansion option" only.
  • Request government guarantee only for Shell revenue.

🎯 With Third-party Investors

  • Negotiate GPU investment AFTER securing PPP concession
  • Use Shell Infrastructure as basis to attract GPU investors
  • Negotiate revenue sharing terms separately

📋 Investment Sequencing Strategy

Phase Activity Investment Counterparty
Phase 1 Secure PPP Concession $2.5B-$2.75B Vietnamese Government
→ Negotiate Shell Model with Government
→ Execute Concession Agreement & Financial Close
Phase 2 Attract GPU Investment ~$3.8B Third-party Investors
(No Govt Involvement)
→ Approach Hyperscalers / GPU Funds after concession secured
→ Execute GPU Investment Agreement

⚠️ DISCLAIMER

CONFIDENTIALITY NOTICE: This document contains proprietary and confidential information of HEART JSC and is intended solely for the authorized recipient(s). Any unauthorized review, use, disclosure, distribution, or copying of this document or its contents is strictly prohibited.

NO OFFER OR SOLICITATION: This document is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security, investment product, or investment strategy. All financial projections, estimates, and forward-looking statements are subject to significant uncertainties and contingencies.

FORWARD-LOOKING STATEMENTS: This document contains forward-looking statements that involve substantial risks and uncertainties. Actual results may differ materially from those expressed or implied by such statements. Past performance is not indicative of future results.

REGULATORY COMPLIANCE: This PPP-BOT framework is designed in accordance with Vietnam's PPP Law 64/2020 and Decree 180/2025. All terms and conditions are subject to governmental approval and regulatory requirements.

INTELLECTUAL PROPERTY: All content, analysis, and methodologies presented in this document are the intellectual property of HEART JSC. © 2026 HEART JSC. All rights reserved.

🏢 HEART JSC | Vietnam • Korea • Singapore
Contact: choi.hs@choiceind.com | +84 906 430 032