I think the OP should investigate how much time and effort it will take them to get the first vest (or an equivalent agreement). Then they can make an informed choice.

I agree that the partnership is wrecked and that he should walk away after determining if they can get the 10% ownership (heck, maybe the right number is 3% or 7% or something else, only the OP knows what feels least wrong).

But it's not clear to me that the company is doomed (from the little we know). In fact, it sounds like it might do great.