My partner (by MoU) quit the project and wants to be cashed out. What's the ethical thing to do?

Last year, I brought on a partner to help develop my business idea and write a Business Plan. I agreed to pay him a discounted hourly rate for the Plan, and give him a minority stake in the company, which I own solely. After I raised some concerns about his performance, he quit, but wants to be paid for the time he invested as a partner (not what he spent on the Plan, which I've paid him for). Our MoU doesn't have any contingencies for this situation, and we have no other Operating Agreement in place between us. There is very little, if any, equity in the company at this point - we haven't produced anything in the market place, have had no income, and all cash outlays (and 80% of non-cash investment in market research, prototyping, validation, consultant vetting, etc…