Dispute with Partner

Hi, My question is related to the partnership firm. We had a partnership with my relative(cousin) in the year 2015-16. The partnership was closed in less than a year as my cousin did not manage it well and the entire amount invested in the business turned into the loss appx 25 Lacs. He then informed the partnership his willingness to resign and walked out. While going he asked for the settlement amount of his contribution as the business was still open at that time. We gave him in writing that we will give him 5 Lacs as full and final settlement amount after 1 year if business starts making profit. But we did not mention that "If it starts earning the profit". The due date was mentioned as July 1st, 2017. Now he has approached our parents and told that he would be coming to demand money in August. However after he left the firm we realised that there were lot of pending dues from vendors, light bill, water bills were not cleared, rent was not paid , which amounted to almost 3 Lacs. But we did not know this when he went off from the business. We decided to closed down the business and sold off all the assets at 80% lesser value of the assets as we wanted to get rid off from this. Now we do not have any money to pay him. Also we had taken a loan from Bank on our name for which we are paying the EMI every month. We had written one condition in the letter that he would not start any similar business and also will not use name of the firm for any of his activities. But recently we came to know that he has started his own new firm and using the same name, however the logo style is changed. Since we do not have money, what is the legal option through which we should not be liable to pay him. The document that we gave him in writing was on stamp paper of 500 rupees and not notarised. Please advise.