not major league here but this could be something good (or maybe bad) I don't have enough experience to know myself. could someone who does know share their thoughts?

This is between an independent artist with no prior track record and me (producer) with a few production credits but no real track record either.
My job is to deliver, from his 'reason' files, the final stereo mixes for an album of up to 12 songs and in addition to programming drums,recording his vocals and adding other musical elements (guitars,etc. ).
I dig their music and this looked like a great opportunity to help me get further production work. The business side of this is very unclear to me though:
Since he has no money we agreed to do this for 3% sales royalty (6% until $2500 per track fee is paid to me). I have not signed a contract yet but was presented with one which of course lists many other details. due to being recently unemployed I cannot hire a lawyer yet.

Is it even a good idea to do a deal like this?
Should I retain my mix source files until fees are paid in full or Is it standard to hand them over? (I am being pressured on this issue).
What would you do in this situation?

thanks
dave