Yep, the free beats are actually free, in fact even if your score a big hit using em i wont charge you a penny. These are limited licensed so your only restrictions are you cannot sell/lease the beats on their own and you cannot use your finished tracks on itunes or use them on a monetized Youtube video.
An exclusive license give you the right to use the beat exclusively for your own projects. Only you will be able to use the beat and no one else (not even Kendrick!)
Stems are the individual tracks that make up the beat such as the drums, bass, samples etc. This gives you even greater control when it comes to mixing your own project as you can adjust the instruments in the beat to suit your own taste.
100% yes, if you purchase a beat tape or exclusive beat you will receive a fully personalised, legally binding beat contract that will protect you in case of any future legal issues.
No, once you have purchased a beat tape or exclusive beat from this site, there are no limitations on how many mixtapes, albums etc you sell or how many multi-media projects you can use these beats on.