DISABLED PLAYER EXCEPTION -- This exception allows a team which is over the cap to replace a disabled player who will be out for the remainder of that season (it can also be granted in the event of a player's death). This exception is granted by the league, based on an application from the team and a determination by an NBA-designated physician that the player is substantially more likely than not to be unable to play through the following June 15.
If this exception is granted, the team can acquire one player via free agent signing, trade or wavier claim, to replace the disabled player:
The team may sign a free agent for one season only, for 50% of the disabled player's salary or the amount of the Non-Taxpayer Mid-Level exception, whichever is less.
The team may trade for a player in the last season of his contract only (including any option years)4, who is making no more than 50% plus $100,000 of the disabled player's salary, or the amount of the Non-Taxpayer Mid-Level exception plus $100,000, whichever is less.
The team may claim a player on waivers who is in the last season of his contract only (including any option years), who is making no more than 50% of the disabled player's salary, or the amount of the Non-Taxpayer Mid-Level exception, whichever is less.
Teams can apply for this exception from July 1 through January 15, and cannot apply after January 15. Once granted, the exception expires when a player is acquired, when the disabled player is traded or returns to the team, or on March 10 of that season, whichever comes first. This exception is granted on a season-by-season basis -- if the player will also be out the following season, the team needs to apply for this exception again the following season.
This exception can only be granted to the team for which the player was playing when his injury or illness was known, or reasonably should have become known. A team cannot trade for an injured player and subsequently apply for a Disabled Player exception for that player.
If a team's application for a disabled player exception is denied, the team must wait 90 days before submitting another request related to the same player, and then only for a new injury or aggravation of the same injury. Whether the application was approved or denied, the team can apply again (including for the same injury) the following season.
If the disabled player comes back sooner than expected he may be activated immediately, and the replacement player is not affected.