Designer's contract

How much should I pay my designer in royalties?

We have worked on our product design for a couple of months, and he is
about to create drawings. I suggested, therefore, that we sign an
agreement. In my business plan which he reviewed at the outset of our
project, the financial statements included royalty payments of 3%.
Since then, I have seen rates of up to 5% for other designers working on
dissimilar products, but have no data on what lamp fixture designers
typically are paid. Should I put forward 3% and let him request more,
or leave it blank and ask him for his "going rate"? He has experience
working directly with manufacturers for royalty payments, but no
experience working with an importer. I don't want to insult him, but by
the same token do not, obviously, want to burden my sell price and
threaten it's marketability. The difference between 3 and 5% is not
huge, but what if he asks for 8%? He has asked me to draft the
agreement and is therefore expecting me to choose a rate.

Part 2 of my question regards the manufacturing license. Is this
typically time-bound, if so, what is reasonable? I'm thinking 10 years
will outlast the life of generation 1 of the product, but what about
follow-on designs - how are they handled?

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