With little fanfare, the SBA has updated the template for agreements under the All Small Mentor-Protégé Program (ASMPP). The new template adds a series of check box-style questions, mainly about potential affiliation between the mentor and protege.
Be sure to check out the new template if you are working on a mentor-protégé agreement.
The SBA described the changes to the form this way in a federal register notice:
Changes to Form 2459 include questions about other mentor protégé agreements and information that might lead to a finding of affiliation between the mentor and protege.
The questions basically mirror the affiliation assumptions found in 13 C.F.R. 121.103, although some are specific to a mentor-protégé relationship. For instance, the question about whether a protégé “purchased assets from Mentor including but not limited to facilities or equipment” does not have an analogue in SBA’s affiliation rules–that one seems to be specific to the ASMPP.
Here are the new questions:
e. Mentor or one of Mentor’s owners does ( ) does not ( ) own any of the Protégé’s equity or have the right to own any of the Protégé’s equity, including stock options or convertible securities.
f. Mentor and Protégé do ( ) do not ( ) have an agreement in principle to merge or sell stock to the other.
g. Protégé ( ) has ( ) has not purchased assets from Mentor including but not limited to facilities or equipment.
h. An officer, director, managing member, partner, principal stockholder or employee of the Protégé does ( ) does not ( ) hold a position with the Mentor and has ( ) has not ( ) previously held a position with the Mentor as an officer, director, managing member, partner, principal stockholder or employee of the protégé.
i. An owner or manager of the Protégé is ( ) is not ( ) a family member of an owner or manager of the Mentor. (Family members are limited to married couples, parties to a civil union, parents, children, and siblings.)
j. An owner or manager of the Protégé and owner or manager of the Mentor firm do ( ) do not ( ) have multiple investments in common.
k. Over the previous three fiscal years, the Protégé has ( ) has not ( ) derived 70% or more of its receipts from the Mentor.
l. The Protégé does ( ) does not ( ) have a franchise or license agreement with the mentor.
m. The Mentor and Protégé have ( ) have not ( ) formed a joint venture that has received multiple contract awards more than two years apart or received more than three contract awards.
n. Mentor has ( ) does not have ( ) good character and a favorable financial position.
Be sure to take a close look at these new questions on the ASMPP template in advance of submitting your application. These questions seem to indicate that the ASMPP will be doing a little more investigation into the relationship between proposed mentor and protégé prior to approving a match.
If you answer yes to any of these questions, the ASMPP office is likely to ask for more information, so it probably makes sense to anticipate this by sending in an explanation as part of the initial application.
Questions about this post? Email us or give us a call at 785-200-8919.