What should I legally consider my friend who is helping out with my business.

I am in the process forming an LLC so I can sell a product I am developing via my LLC. I am forming the LLC with a business partner who is also developing the product with me. My partner and I have a friend who we paid a lump sum to develop a circuit board that will be used in our product. We also agreed that he will receive 1% of profits once we begin selling the product (we have this all in writing). I'm not sure what to legally consider this friend. I'm not sure if he would be considered a contractor because he is receiving some percentage of the profit. I'm also not sure if he would be considered a business partner. I don't want to run in to any legal trouble in the future by paying him a percentage. Any input as to how to deal with this would be great!

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