I have no problem with paying the guy, the problem is the payroll/tax consequences... so if that's an issue, then he needs to go, but he'd be worth keeping.
It mentions that the Knicks are interested in him, I have no clue why they would spend their cap space on him though. I'm fine with it because we're working above the cap, but I wouldn't give out this type of contract for him if I'm under the cap... unless I have already a core group in place, and the Knicks don't.