(1) If the player is a Qualifying Veteran Free Agent, the new Player Contract may provide for Salary and Unlikely Bonuses in the first Salary Cap Year totaling up to the maximum amount provided for in Article II, Section 7. Notwithstanding the preceding sentence, if the player is a Qualifying Veteran Free Agent whose last Contract was his Rookie Scale Contract and whose Prior Team did not exercise the second Option Year to extend such Contract for a fourth Season, the new Player Contract may provide for Regular Salary, Likely Bonuses and Unlikely Bonuses in the first Salary Cap Year of up to the Regular Salary, Likely Bonuses and Unlikely Bonuses, respectively, that the player would have received for such Salary Cap Year had his Prior Team exercised its second Option Year. Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(c)(2) above.

(2) If the player is a Non-Qualifying Veteran Free Agent, then, subject to Article II, Section 7, the new Player Contract may provide in the first Salary Cap Year up to the greater of:

(i) 120% of the Regular Salary for the final Salary Cap Year of the player’s prior Contract, plus 120% of any Likely Bonuses and Unlikely Bonuses, respectively, called for in the final Salary Cap Year covered by the player’s prior Contract;

(ii) Salary plus Unlikely Bonuses totaling 120% of the then-current Minimum Annual Salary applicable to the player; or

(iii) in the case of a Contract between a Team and its Restricted Free Agent, the Salary and Unlikely Bonuses required to be provided in a Qualifying Offer. Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(c)(1) above.

(3)

(i) If the player is an Early Qualifying Veteran Free Agent, the new Player Contract must cover at least two (2) Seasons (not including a Season covered by an Option Year) and, subject to Article II, Section 7, may provide in the first Salary Cap Year up to the greater of: (A) 175% of the Regular Salary for the final Salary Cap Year covered by his prior Contract, plus 175% of any Likely Bonuses and Unlikely Bonuses, respectively, called for in the final Salary Cap Year covered by the player’s prior Contract, or (B) Salary plus Unlikely Bonuses totaling 108% of the Average Player Salary for the prior Salary Cap Year (or if the Audit Report for the prior Salary Cap Year has not been completed, 108% of the Average Player Salary for the prior Salary Cap Year as computed by substituting Estimated Total Salaries (as defined in Article VII, Section 1(i)) for Total Salaries). Notwithstanding the preceding sentence, if the player is an Early Qualifying Veteran Free Agent whose last Contract was his Rookie Scale Contract and whose Prior Team did not exercise its Option to extend such Contract for a third Season, the new Player Contract may provide for Regular Salary, Likely Bonuses and Unlikely Bonuses in the first Salary Cap Year of up to the Regular Salary, Likely Bonuses and Unlikely Bonuses, respectively, that the player would have received for such Salary Cap Year had his Prior Team exercised such Option. Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(c)(2) above.

(ii) Notwithstanding anything to the contrary in Section 5(b)(2) above, if an Early Qualifying Veteran Free Agent with two (2) Years of Service receives an Offer Sheet in accordance with the provisions of Article XI, Section 5(c)(ii), the player’s Prior Team may use the Early Qualifying Veteran Free Agent Exception to match the Offer Sheet.

(1) Subject to the rules set forth in Section 6(k) below, a Team may, in accordance with the rules set forth in this Section 6(c), sign or acquire one Replacement Player to replace a player who, as a result of a Disabling Injury or Illness (as defined below), is unable to render playing services (the “Disabled Player”).

(i) If a team wishes to sign a Replacement Player pursuant to this Section 6(c), such Replacement Player’s Contract may provide Salary and Unlikely Bonuses for the first Salary Cap Year totaling up to the lesser of (A) 50% of the Disabled Player’s Salary at the time the Disabling Injury or Illness occurred, or (B) 108% of the Average Player Salary for the prior Salary Cap Year (or, if the Audit Report for the prior Salary Cap Year has not been completed, 108% of the Average Player Salary for the prior Salary Cap Year as computed by substituting Estimated Total Salaries (as defined in Article VII, Section 1(i) for Total Salaries). Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(c)(1) above.

(ii) If a Team wishes to acquire a Replacement Player pursuant to this Section 6(c), the Replacement Player’s post-assignment Salary for the Season in which the Replacement Player is acquired may be up to the lesser of the amount described in Section 6(c)(1)(i)(A) above or the amount described in Section 6c)(1)(i)(B) above, plus, in either case, $100,000.

(2) For purposes of this Section 6(c), Disabling Injury or Illness means:

(i) for the period July 1 through the immediately following November 30, any injury or illness that, in the opinion of the physician described in subsection (c)(5) below, will render a player unable to play all (or the remainder) of the Season immediately following such July 1; and

(ii) for the period December 1 through the immediately following June 30, any injury or illness that, in the opinion of the physician described in subsection (c)(5) below, will render a player unable to play all of the following Season.

(3) The Exception for a Disabling Injury or Illness that occurs during the period July 1 through the immediately following November 30 shall arise on the earlier of (i) forty-five (45) days prior to the last day of the Regular Season immediately following such July 1, or (ii) the date the Team knew or reasonably should have known that the injury or illness would cause the player to miss the Season immediately following such July 1, and shall expire 45 days from the date the Exception arises.

(4) The Exception for a Disabling Injury or Illness that occurs during the period December 1 through the immediately following June 30 shall arise on the earlier of (i) forty-five (45) days prior to the October 1 immediately following the date on which the Disabling Injury or Illness occurs, or (ii) the date the Team knew or reasonably should have known that the injury or illness would cause the player to miss all of the following Season; provided, however, that if the Team knew or reasonably should have known prior to the July 1 immediately following the injury or illness that the injury or illness would cause the player to miss all of the following Season, and if the Team does not use the Exception prior to such July 1, then the Exception shall be deemed to arise on the day following the last day of the Moratorium Period. The Exception for a Disabling Injury or Illness that occurs during the period December 1 through the immediately following June 30 shall expire on the October 1 immediately following the date on which the Exception arises.

(5) The determination of whether a player has suffered a Disabling Injury or Illness shall be made by a physician designated by the NBA, who shall review the relevant medical information and, if the physician deems it appropriate, examine the player. The NBA shall advise the Players Association of the determination of its physician within one (1) business day of such determination. In the event the Players Association disputes the NBA physician’s determination, the parties will immediately refer the matter to a neutral physician (to be selected by the parties at the commencement of each Salary Cap Year) to review the relevant medical information and, if the neutral physician deems it appropriate, examine the player. Within three (3) business days of his receipt of such information (and examination of the player, if requested), the neutral physician shall make a final determination, which will be final, binding and unappealable. The cost of the NBA physician will be borne by the NBA. The cost of the neutral physician will be borne jointly by the NBA and the Players Association.

(6) If a Team requests an Exception pursuant to this Section 6(c), the player with respect to whom the request is made shall cooperate in the processing of the request, including by appearing at the scheduled place and time for examination by the NBA-appointed physician and, if necessary, the neutral physician.

(7) Notwithstanding a Team’s receipt of an Exception in respect of a Disabled Player pursuant to this Section 6(c), such player, upon recovering from his injury or illness, may resume playing for the Team. If the player resumes playing for the Team, or is traded, prior to the Team’s use of its Exception, the Exception shall be extinguished.

(8) In no event may a Team enter into a Contract with a Replacement Player pursuant to Section 6(c)(4) above, unless the Disabled Player’s Contract covers the Season following the Season in which the Disabling Injury or Illness occurs.

(9) The Disabled Player Exception is available only to the Team with which the player was under Contract at the time his Disabling Injury or Illness occurred.

(10) If a Team makes a request for an Exception to replace a Disabled Player pursuant to this Section 6(c) and such request is denied, the Team shall not be permitted to make any subsequent request for an Exception to replace the same player unless ninety (90) days have passed since the first request was denied and the Team establishes that the subsequent request is based on a new injury or an aggravation of the same injury.

(1) During each Salary Cap Year in which a Team is permitted to use the Bi-annual Exception, a Team may sign one (1) or more Player Contracts, not to exceed two (2) Seasons in length, that, in the aggregate, provide for Salaries and Unlikely Bonuses in the first Salary Cap Year totaling up to the amounts set forth below:

(i) For the 2005-06 Salary Cap Year: $1.67 million

(ii) For the 2006-07 Salary Cap Year: $1.75 million

(iii) For the 2007-08 Salary Cap Year: $1.83 million

(iv) For the 2008-09 Salary Cap Year: $1.91 million

(v) For the 2009-10 Salary Cap Year: $1.99 million

(vi) For the 2010-11 Salary Cap Year: $2.08 million

(vii) For the 2011-12 Salary Cap Year: $2.18 million
(if the NBA exercises its option to extend this Agreement pursuant to Article XXXIX)

(2) A Team may use all or any portion of the Bi-annual Exception to sign one (1) or more new Player Contracts during no more than three (3) separate Salary Cap Years during the term of this Agreement (or no more than four (4) separate Salary Cap Years if the NBA exercises its option to extend this Agreement pursuant to Article XXXIX); provided, however, that the Bi-annual Exception or any portion thereof may not be used in any two (2) consecutive Salary Cap Years. The prohibition in the preceding sentence against using the Bi-annual Exception or any portion thereof in any two (2) consecutive Salary Cap Years shall apply to the 2004-05 Salary Cap Year (i.e., if a Team used all or any portion of the Bi-annual Exception during the 2004-05 Salary Cap Year, that Team shall not be permitted to use all or any portion of the Bi-annual Exception during the 2005-06 Salary Cap Year).

(3) Player Contracts signed pursuant to the Bi-annual Exception covering two (2) Seasons may provide for an increase or decrease in Salary and Unlikely Bonuses for the second Season in accordance with Section 5(c)(1) above.

(4) The Bi-annual Exception, if applicable, arises on the day following the last day of the Moratorium Period of each Salary Cap Year and expires on the last day of the Team’s Regular Season during that Salary Cap Year.

(1) A Team may sign one (1) or more Player Contracts during each Salary Cap Year, not to exceed five (5) Seasons in length, that, in the aggregate, provide for Salaries and Unlikely Bonuses in the first Salary Cap Year totaling up to 108% of the Average Player Salary for the prior Salary Cap Year (or, if the Audit Report for the prior Salary Cap Year has not been completed, 108% of the Average Player Salary for the prior Salary Cap Year as computed by substituting Estimated Total Salaries (as defined in Article VII, Section 1(i)) for Total Salaries).

(2) Player Contracts signed pursuant to the Mid-Level Salary Exception may provide for annual increases and decreases in Salary and Unlikely Bonuses in accordance with Section 5(c)(1) above.

(3) Notwithstanding anything to the contrary in Section 6(e)(2) above, if a Veteran Free Agent with one (1) or two (2) Years of Service receives an Offer Sheet in accordance with the provisions of Article XI, Section 5(c)(ii), the player’s Prior Team may use the Mid-Level Exception to match the Offer Sheet.

(4) The Mid-Level Salary Exception shall arise on the day following the last day of the Moratorium Period of each Salary Cap Year and shall expire on the last day of the Team’s Regular Season during that Salary Cap Year.

(1) Subject to the rules set forth in Section 6(k) below, a Team may, for a period of one year following the date of the trade of a Player Contract to another Team, replace the Traded Player with one (1) or more players acquired by assignment as follows:

(i) A Team may replace a Traded Player with one (1) or more Replacement Players whose Player Contracts are acquired simultaneously and whose post-assignment Salaries for the then-current Salary Cap Year, in the aggregate, are no more than an amount equal to 125% of the pre-trade Salary (or Base Year Compensation, if applicable) of the Traded Player, plus $100,000.

(ii) If a Team’s trade of a player and acquisition of one (1) or more Replacement Players do not occur simultaneously, then the post-assignment Salary or aggregate Salaries of the Replacement Player(s) for the Salary Cap Year in which the Replacement Player(s) are acquired may not exceed 100% of the pre-trade Salary (or Base Year Compensation, if applicable) of the Traded Player at the time the Traded Player’s Contract was traded, plus $100,000.

(iii) A Team may aggregate the pre-trade Salaries in two (2) or more Player Contracts for the purpose of acquiring in a simultaneous trade one (1) or more Replacement Players whose post-trade Salaries, in the aggregate, are no more than an amount equal to 125% of the pre-trade aggregated Salaries (or Base Year Compensations, if applicable) of the Traded Players, plus $100,000. Notwithstanding the preceding sentence, no Player Contract acquired pursuant to an Exception may give rise to an aggregated trade exception for a period of two (2) months from the date the Player Contract is acquired.

(2) Except as provided in Section 6 (h)(3) below, and notwithstanding Section 6(k) below, a Team with a Team Salary below the Salary Cap may acquire one (1) or more players by assignment whose post-assignment Salaries, in the aggregate, are no more than an amount equal to the Team’s Room plus $100,000.

(3) In lieu of conducting the trade in accordance with Section 6(h)(2) above, and notwithstanding Section 6(k) below, a Team with a Team Salary below the Salary Cap may (i) replace a Traded Player with one (1) or more Replacement Players whose Player Contracts are acquired simultaneously and whose post-trade Salaries for the then-current Season, in the aggregate, are no more than an amount equal to 125% of the pre-trade Salary of the Traded Player, plus $100,000, or (ii) aggregate the pre-trade Salaries in two (2) or more Player Contracts for the purpose of acquiring in a simultaneous trade one (1) or more Replacement Players whose post-trade Salaries, in the aggregate, are no more than an amount equal to 125% of the pre-trade aggregated Salaries of the Traded Players, plus $100,000. Notwithstanding the preceding sentence, no Player Contract acquired pursuant to an Exception may be traded by a Team in accordance with this Section 6(h)(3) for a period of two (2) months from the date the Player Contract is acquired.

(4)

(i) For purposes of the Traded Player Exception, a player shall be subject to a Base Year Compensation in the event that the Team Salary of the player’s Team is at or above the Salary Cap and the player:

(A) is a Qualifying Veteran Free Agent or Early Qualifying Veteran Free Agent who, in accordance with Section 6(b)(1) or (3) above, enters into a new Player Contract with his prior Team that provides for a Salary for the first Season of such new Contract greater than 120% of the Salary for the last Season of the player’s immediately prior Contract (except that such a player shall not be subject to a Base Year Compensation if the new Contract provides for Salary equal to the Minimum Player Salary with no Unlikely Bonuses);

(B) is a First Round Pick who, in accordance with Section 7(b) below, enters into an Extension of his Rookie Scale Contract that provides for a Salary for the first Season of the extended term greater than 120% of the Salary for the last Season of the original term of the Contract; or

(C) will be subject to a Base Year Compensation on some future date based upon an Extension entered into prior to the date of this Agreement.
For purposes of Section 6(h)(4)(i)(A) above, if the player’s immediately prior Contract was a one-year Contract that provided for Salary equal to the Minimum Player Salary (with no Unlikely Bonuses), the player’s prior Salary shall include the portion of the Minimum Player Salary, if any, that was reimbursed out of the League-wide benefits fund described in Article IV, Section 5(k).

(ii) A player’s Base Year Compensation shall equal the greater of (A) the Salary for the last Season of his preceding Contract or, in the case of an Extension, the last Season of the original term of the Contract (the preceding amount hereinafter referred to as the “Base Year Salary”), or (B) 50% of the Salary for the first Season of his new Contract (or extended term, if applicable). A player’s Base Year Compensation shall go into effect on the date the new contract is entered into or, in the case of an Extension, the day following the last day of the Moratorium Period that precedes the first Season of the extended term and shall expire and be of no further effect on the later of (x) the following June 30, or (y) six (6) months following the date the Base Year Compensation goes into effect.

(iii) If a player has a Base Year Compensation that, pursuant to Section 6(h)(4)(ii) above, expires six (6) months after it goes into effect and during such six (6) month period the player signs a new Contract with his prior Team, the player shall continue to be subject to a Base Year Compensation in his new Contract until the conclusion of such six (6) month period. For purposes of computing such Base Year Compensation during the new Contract, the player’s Base Year Salary shall equal the Base Year Compensation applicable under his prior Contract. Notwithstanding the foregoing, in the event the player is a Qualifying Veteran Free Agent or an Early Qualifying Veteran Free Agent, and the new Contract would itself subject the player to a Base Year Compensation in accordance with Section 6(h)(4)(i)(A) above, then the player shall be subject to a new Base Year Compensation for, the amount and duration of which shall be determined in accordance with Section 6(h)(4)(ii) above.

(iv) A player’s Base Year Compensation shall be extinguished upon any of the following:

(A) The Team Salary of the player’s Team falls below the Salary Cap, unless this occurs prior to the beginning of an extended term described in Section 6(h)(4)(i)(B) or (C) above;

(B) The player signs a Contract with a Team other than his Prior Team; or

(C) The player is traded, unless the trade occurs prior to the beginning of an extended term described in Section 6(h)(4)(i)(B) or (C) above.

(1) A Team shall be entitled to use the Disabled Player, Bi-annual, Mid-Level Salary, and Assigned Player Exceptions set forth in Section 6(c), (d), (e) and (h) above, respectively, except as set forth in Section 6(h)(2) and (3) above, only if, at the time any such Exception would arise and at all times until it is used, the Team’s Team Salary, excluding the amount(s) of such Exception and any other Exception that would be included in Team Salary pursuant to Section 6(k)(2) below, is (i) at or above the Salary Cap, or (ii) below the Salary Cap by less than the amount(s) of the Team’s Exception(s).

(2) In the event that when a Disabled Player Exception, Bi-annual Exception, Mid-Level Salary Exception and/or Assigned Player Exception arises, the Team’s Team Salary is below the Salary Cap (or in the event that, prior to the expiration of any such Exceptions, the Team’s Team Salary falls below the Salary Cap) by less than the amount of such Exceptions, then (i) the Team’s Team Salary shall include, until the Exceptions are actually used or until the Team no longer is entitled to use the Exceptions, the amount of the Exceptions (or any unused portion of the Exceptions), and (ii) the amount by which the Team’s Team Salary is less than the Salary Cap shall thereby be extinguished. When the Disabled Player Exception is used to sign or acquire a player, the Replacement Player’s Salary for the first Season of his Contract, instead of the amount of the Exception, shall be included in Team Salary. When a Bi-annual Exception or Mid-Level Salary Exception is used to sign a player, or when an Assigned Player Exception is used to acquire a player, the Salary for the first Season of the signed or acquired Contract plus any then-unused portion of the Exception, instead of the full amount of the Exception, shall be included in Team Salary. A Team may at any time renounce its rights to use an Exception, in which case the Exception (or any unused portion of the Exception) will no longer be included in Team Salary.

(3) Beginning on January 10 of each Season, each unused Exception, other than the Traded Player Exception, the Minimum Player Salary Exception (which is governed by Section 6(g) above and Article I, Section (gg)) and the Disabled Player Exception, shall be reduced daily throughout the end of the Regular Season by the product of the amount of the unused Exception as of January 10 multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the total number of days in such Regular Season.