; and (B) second, as income on the contract which is includible in gross income. 102. Terms and conditions of income-share agreement contracts (a) Terms and conditions An income-share agreement shall not be treated as meeting the requirements of this section unless: (1) Specified percentage of income The agreement specifies the percentage of future income required to be paid. (2) Definition of income The income-share agreement specifies the definition of income to be used for purposes of calculating an individual’s obligation to pay under the agreement, which shall not in any case include the income of the individual’s children. (3) Specified duration