CESP Companhia Energetica de São Paulo : Notice to Shareholders - Withdrawal Right and Income Tax

CESP - COMPANHIA ENERGÉTICA DE SÃO PAULO

Publicly Held Company

Corporate Taxpayer ID (CNPJ): 60.933.603/0001-78

Company Registry (NIRE) 35.300.011.996 | CVM Code

02577

NOTICE TO SHAREHOLDERS

Approval of Merger of the Company's Shares at the Extraordinary Shareholders Meeting, Start of Period for Exercising Withdrawal Right and Income Tax relating to the Transaction

CESP - COMPANHIA ENERGÉTICA DE SÃO PAULO ("Company" or "CESP"), continuing the information disclosed in the Material Fact notice of October 18, 2021 and the subsequent Material Fact notices of 10.21.21, 11.24.21, 12.10.21, 01.03.22, 01.10.22, 01.24.22, 02.04.22 and 02.15.22, about the corporate reorganization aimed at consolidating into a single entity, certain investments in the energy sector of the Company's indirect controlling shareholders ("Reorganization"), hereby announces the following:

1. Merger of Shares

On this date, the Extraordinary Shareholders Meeting ("Meeting") of the Company was held, which approved, among other matters, pursuant to the "Private Instrument of Protocol and Justification of the Merger of Shares Issued by CESP - Companhia Energética de São Paulo with VTRM Energia Participações S.A." [Instrumento Particular de Protocolo e Justificação da Incorporação das Ações de Emissão da CESP - Companhia Energética de São Paulo pela VTRM Energia Participações S.A.] ("Merger Protocol"), the merger of shares issued by CESP with VTRM Energia e Participações S.A. ("VTRM" and "Merger of Shares").

The Merger of Shares of the Company approved at the Meeting will take effect, pursuant to the Merger Protocol, subject to the implementation, cumulatively, or waiver, when applicable, of certain conditions precedent and the arrival of the date on which the transaction will become effective, to be set by the Board of Directors of VTRM ("Closing Date"), as established in the Merger Protocol.

2. Withdrawal Right

The approval of the Merger of Shares at the Meeting grants the shareholders of the Company who dissent from the deliberation on withdrawal right, as detailed below:

2.1. Shareholders entitled to withdrawal right

Shareholders of CESP, regardless of the class or type of shares held, who did not approve the Merger of Shares, whether by dissenting vote, abstention or absence ("Dissenting Shareholders"), will, as determined at the Meeting, be assured the right to withdraw from the Company ("Withdrawal Right"), pursuant to articles 137, 252, paragraph 2, and article 264, paragraph 3of the Brazilian Corporations Law.

The exercise of Withdrawal Right in relation to all or a portion of the shares of CESP

is assured to Dissenting Shareholders in relation to the shares of the Company that they demonstrably held, without any interruption, since October 18, 2021 (inclusive), the date of disclosure of the first Material Fact disclosed about the Merger of Shares, until the Closing Date (inclusive).

2.2. End of the period for exercising withdrawal right

The Withdrawal Right can be exercised within 30 days from the publication of the minutes of the Meeting. The minutes of the Meeting will be published in the Valor Econômico newspaper on February 16, 2022, and published simultaneously on its website (https://valor.globo.com/valor-ri/atas-e-comunicados/) and the website of the Company (https://ri.cesp.com.br/), such that the deadline for exercising the Withdrawal Right is March 18, 2022, and which will expire for Dissenting Shareholders who fail to exercise it before the deadline.

2.3. Reimbursement per Share

Pursuant to the Merger Protocol, Dissenting Shareholders of CESP who exercise the Withdrawal Right will receive, on the date and in the form of payment specified in item

2.5 below, as reimbursement:

1. R$22.011123326794 per share, which corresponds to the book value per share of the Company, excluding treasury shares on the date of the Merger Protocol, as per the financial statements of December 31, 2020, approved at the Annual Shareholders Meeting held on March 30, 2021 ("Reimbursement Amount"), without prejudice to the right to draw up a special balance sheet in accordance with applicable laws.

Since the ratio of comparative replacement, calculated in accordance with article 264 of the Brazilian Corporations Law, is more beneficial to the of CESP than the actual exchange ratio adopted, pursuant to the Merger Protocol, Dissenting Shareholders can, while exercising their Withdrawal Right, choose to receive as reimbursement:

1. R$19.448591677699 per share, corresponding to the book value of the Company's shares on September 30, 2021, adjusted to market prices, excluding the treasury shares on the date of the Merger Protocol, pursuant to article 264, paragraph 3 of the Brazilian Corporations Law ("Alternative Reimbursement Amount").

Dissenting Shareholders who fail to request, while exercising their Withdrawal Right, the Alternative Reimbursement Amount, will receive as reimbursement, the Reimbursement Amount.

Also, pursuant to article 45, paragraph 2, of the Brazilian Corporations Law, Dissenting Shareholders may request the preparation of a special balance sheet to determine the new reimbursement amount ("Special Balance").

The Special Balance Sheet may be requested from the Company by each Dissenting Shareholder, which has exercised the Withdrawal Right in accordance with item 2.4 below, solely in relation to the shares held by them. The request to prepare a Special Balance Sheet by Dissenting Shareholders will be made individually so that it will neither benefit nor affect another shareholder who has not expressly requested such preparation. The request to prepare the Special Balance Sheet can be made through

the communication channels of the Company's Investor Relations department available on the Company's website and must be regularly received by the Company on the same date as the shareholder's request of its Withdrawal Right. It is worth mentioning that the Withdrawal Right must be carried out with the Transfer Agent or the Central Securities Depository of B3, in accordance with item 2.4 below, and the request of the Special Balance Sheet must be directed to the Company, as described herein, on the same date.

Dissenting Shareholders who fail to request the preparation of the Special Balance Sheet according to the deadlines and procedures above, will receive the Reimbursement Amount.

If requested, the Special Balance Sheet will be prepared on a date prior to the Meeting, which will be fixed by the management of the Company, subject to the maximum period of 60 days between the date of preparation of the Special Balance Sheet and the date of the Meeting.

Dissenting Shareholders which request the Special Balance Sheet, will receive the Reimbursement Amount in accordance to the way and date described with the item 2.5 below.

2.4. Procedure for exercising the Withdrawal Right

(a) Book-entryshares at Itaú Corretora de Valores S.A.

Dissenting Shareholders whose shares are registered directly with Itaú Corretora de Valores S.A. ("Transfer Agent") and who wish to exercise their Withdrawal Right should contact the Shareholder Assistance Channel through the following numbers:

• State capitals and metropolitan regions: (11) 3003-9285
• Other regions: 0800-720-9285
• For checking account holders: (11) 4004-4828 (options 3-6-3)

• 1. Business hours are from 9 a.m. to 6 p.m. on weekdays. The following documents must be sent to the Transfer Agent:
• Individual Shareholders: (a) Identity document (RG); (b) Individual taxpayer number (CPF); (c) proof of address; and (d) letter signed by the dissenting shareholder with signature notarized, requesting withdrawal and specifying the shareholder's personal and bank details for payment of reimbursement and the number of shares held by the dissenting shareholder on which the withdrawal right will be exercised.
• Legal entities:(a) original and copy of the bylaws and minutes of election of the current executive board or the consolidated articles of association in force;
• 1. Legal entity taxpayer number (CNPJ); (c) Identity document (RG), Individual taxpayer number (CPF) and proof of address of its representatives; and (d) letter signed by the dissenting shareholder with signature notarized, requesting withdrawal and specifying the shareholder's personal and bank

details for payment of reimbursement and the number of shares held by the dissenting shareholder on which the withdrawal right will be exercised.

• Investment Funds:(a) original and copy of the latest consolidated fund regulations duly registered with competent authorities; (b) original and copy of the bylaws and minutes of election of the current executive board or the consolidated articles of association in force of the administrator and/or manager of fund (depending on the person authorized to attend and vote at shareholder meetings related to the assets held by the fund); (c) registration card of the National Register of Legal Entities (CNPJ) of the fund, as well as the administrator and/or manager of the fund; (d) Identity document (RG), Individual taxpayer number (CPF) and proof of address of its representatives; and (e) letter signed by the dissenting shareholder with signature notarized, requesting withdrawal and specifying the shareholder's personal and bank details for payment of reimbursement and the number of shares held by the dissenting shareholder on which the withdrawal right will be exercised.

Shareholders represented by proxy must submit the above documents and the respective power of attorney with notarized signature, which must have been granted less than one (1) year ago and must contain special powers to exercise withdrawal right and request reimbursement.

For shares deposited at the Transfer Agent, only requests for exercising the withdrawal right regularly received by Itaú Escriturador on or before the deadline for exercising the Withdrawal Right mentioned above will be considered.

1. Shares held in custody at the Central Securities Depository of B3

Dissenting Shareholders whose shares are held in custody at the Central Securities Depository of B3 and who wish to exercise the Withdrawal Right must express their interest in withdrawal through their respective custody agents by contacting them directly and sufficiently in advance to take the necessary measures and to check the documents required for exercising the Withdrawal Right. They must also observe the deadlines, rules and operating procedures established by B3.

2.5. Date and form of payment

Payment to Dissenting Shareholders who have regularly exercised their Withdrawal Right will be made based on the information on record at the custodians described in item 2.4 above, or in accordance with the bank details that must be provided in the withdrawal request, as per item 2.4 above.

Payment of the Reimbursement Amount or the Alternative Reimbursement Amount, as applicable, will be made on the Closing Date. If there is a request for preparing a Special Balance Sheet, Dissenting Shareholders will receive on the Closing Date, 80% of the Reimbursement Amount and the balance, if any, will be paid within 120 days from the Closing Date.

3. Review of the Transaction

Pursuant to article 137, paragraph 3 of the Brazilian Corporations Law, the Company management can, within ten (10) days after the deadline for exercising the Withdrawal Right, call a shareholders meeting to reconsider the resolution taken at

the Meeting if it understands that the payment of the reimbursement amount of the shares to Dissenting Shareholders who exercised the withdrawal right will put the financial stability of the Company at risk.

4. Income Tax on the Merger of Shares and Information on Non-ResidentShareholders

With the Merger of Shares, CESP will become a wholly-owned subsidiary of VTRM and all the shares issued by it will be held by VTRM. Shareholders of the Company who fail to exercise the Withdrawal Right will receive, in place of the merged shares of the Company and held by them, new redeemable common and preferred shares issued by VTRM, and the redeemable preferred shares will be compulsorily and immediately redeemed, on the Closing Date, and cash paid to shareholders.

Within the scope of the Merger of Shares, any income tax on the transaction will be borne by the respective taxpayers, that is, those who earn any capital gain as a result of the transaction.

For CESP's Non-Resident Shareholders, VTRM will withhold Income Tax on any positive difference between: (a) the sum of R$ 27.930913351747, which corresponds to the value per share of CESP attributed by the Independent Special Committee and approved by the Board of Directors of the Company as part of the Merger of Shares, and; and (b) the acquisition cost of the shares held by the shareholder in question, through the application of progressive rates varying between 15% and 25%, depending on the gain recognized, as well as the jurisdiction and eligibility.

In case of non-resident shareholders of CESP who do not exercise the Withdrawal Right, given that VTRM is responsible for withholding and paying income tax, of which amount will be withheld against the amount to be paid as a Redemption, said shareholders or their respective legal representatives must send information about the average acquisition cost of shares issued by the Company held by them, in the format shown below, to the Investor Relations department of the Company at ricesp@cesp.com.br.

For reference, the Company requests non-resident shareholders to send the information in the following format (accompanied by respective supporting documentation, as applicable):

Note that if non-resident shareholders fail to inform by 6:00 p.m. on March 18, 2022 their respective average acquisition cost, or, at the discretion of the Company, fail to send the necessary documentary evidence for the information submitted, the acquisition cost of the non-resident shareholder in question will be considered "zero" and the value per CESP share attributed by the Independent Special Committee within the scope of the Merger of Shares will entirely be considered capital gain,