i have a theory as to why he wants it to be free...
He heard how terrible you were, and was too nice to kick you the fuck out of his house. he decided it would be easier to just record some random verse that he probably recycled from some little known song of his, and said for you not to sell it, to give it away from free. that way if anyone ever hears it, he can claim that he had no part in making the track, and that you just took one of his old verses, put it on a different beat, and released it as a "new track". no reason to waste the time or money trying to sue you over rights to the verse because you are nothing but a myspace "rapper". sound fair?