Recommendations may be made on the content (I) and secrecy (II) of the letters annexes. It is important that the terms of a side letter do not grant the side-letter investor rights that accidentally create a separate class of shares that require the agreement of existing shareholders for such a change. In the absence of such an agreement, the issuance of shares to the side-letter investor could be invalid. Despite the lack of clear direction from Canadian courts on this matter, the main problems related to accessory letters can be classified into three general areas: (i) how the APP deals with the issuance of secondary letters, (ii) the provisions that should be included in a subsidiary letter, regardless of the explicit conditions of the LPA, and (iii) the publication of the subsidiary letter to the sponsors. In order to increase secrecy, parties to a subsidiary letter sometimes choose to keep it in trust. In this subsequent situation, the parties must carefully design the instructions they wish to give to the guardianship agent and may decide to use lawyers as trust agents to use the legal privilege related to this profession. Although a primary contract and a secondary letter are two independent agreements, the content of the main contract may affect the ancillary contract. Once the validity of the two contracts has been checked separately, the consistency of the two documents will have to be verified. This distinction between share rights and offer conditions is in fact a distinction between two separate contracts – the contract represented by the articles of association and the economic contract represented by the offer memorandum and the subcontract. A subsidiary letter should only claim to amend the economic treaty, never the provisions of the memorandum or the statutes. In order to take account of secondary mail agreements, it should be specified in the statutes that such agreements concern only the former. An amendment to the provisions on class rights should also stipulate that such a modification does not constitute a modification of the rights of shares.
And if a provision of the subsidiary letter refers to a provision of the articles (for example. B a period of deadlock), the provision should be a provision the application or exercise of which is left to a broad discretion granted to directors by the statutes and which can be exercised exclusively and absolutely, either in general or in a given case. When changing the terms of a primary contract, it may be necessary to send ancillary letters to third parties. . . .