Advice on doing development for equity/deferred payment

This is the sanitized version of the payment terms. This is put in as an exhibit in the software contract agreement itself. I do like the idea and after some research, do like the founder and his background. Among other things, he has a phd in the area his product is in and also worked for a company in this space for 9 years. Also has some working core software(he spend last couple of year full time on this). But are the terms fair? Under what circumstances would you take on such a project(if ever)? -------- A fixed price of $X for completion Phase 1 Milestone and an additional $X for Internal Release Milestone. Payment for both Phase 1 and Phase 2 (Internal Release Milestone) will be made only after delivery and acceptance by Client of Documentation to be made pursuant to paragraph 5 of this Agreement and after Client secures funding. If funding is not secured by February 13th, 2009 an interest of 1% per month will be payable on the amount due for each month after February 13th, 2009.. However, the Client shall pay the Contractor within 60 days upon the expiry of the deadline of February 13, 2009, failing which the Contractor shall terminate this Agreement as per Clause 14.3.