This is a hard question to answer. Is this producer well known or is he just some local guy that likes to call himself a producer? What else has he done? Is he going to own the rights to the music? Is he going to dictate when, where and for how much you play? Is he going to charge you to record or is putting up the money? If he is putting up the money, what are the terms? Do you have to pay it back and if so, is there a date that it has to be paid back? Why does he want his son to be in the band? Have you heard the son play and is he better or worse than your friend? What happens if you ditch your friend and teh new guy doesn't work out? Do you think your friend will ever want to play with you again? Probably not.
I would keep the friend and walk away from the contract. If your band is that good, you will get other opportunities.
I would keep the friend and walk away from the contract. If your band is that good, you will get other opportunities.