102 STAT. 3636
PUBLIC LAW 100-647—NOV. 10, 1988 property to be used in the enterprise or the providing of services and— "(I) the agreement is an arm's length agreement for fair market value, and "(11) the agreement does not otherwise involve any change in interests in the enterprise, "(iii) An option or other agreement to buy or sell property at the fsiir market value of such property as of the time the option is (or the rights under the agreement are) exercised. "(B) LIMITATIONS.— "(i) SERVICES PERFORMED AFTER TRANSFER.—In
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case of compensation for services performed after the transfer referred to in paragraph (I)(B), clause (ii) of subparagraph (A) shall not apply if such services were performed under an agreement providing for the performance of services over a period greater than 3 years after the date of the transfer. For purposes of the preceding sentence, the term of any agreement includes any period for which the agreement may be extended at the option of the service provider. "(ii) AMOUNTS MUST NOT BE CONTINGENT ON PROFITS,
ETC.—Clause (ii) of subparagraph (A) shall not apply to any amount determined (in whole or in part) by reference to gross receipts, income, profits, or similar items of the enterprise. "(C) QUALIFIED DEBT.—For purposes of this paragraph, except as provided in subparagraph (D), the term 'qualified debt'means any indebtedness if— "(i) such indebtedness— "(I) unconditionally requires the payment of a sum certain in money in 1 or more fixed payments on specified dates, and "(II) has a fixed maturity date not more than 15 years from the date of issue (or, in the case of indebtedness secured by real property, not more than 30 years from the date of issue), "(ii) the only other amount payable under such indebtedness is interest determined at— "(I) a fixed rate, or "(II) a rate which bears a fixed relationship to a specified market interest rate, (iii) the interest payment dates are fixed, "(iv) such indebtedness is not by its terms subordinated to the claims of general creditors, "(v) except in a case where such indebtedness is in default as to interest or principal, such indebtedness does not grant voting rights to the person to whom the debt is owed or place any limitation on the exercise of voting rights by others, and "(vi) such indebtedness— "(I) is not (directly or indirectly) convertible into an interest in the enterprise which would not be qualified debt, and "(II) does not otherwise grant any right to acquire such an interest.
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