For example: in December 2011, the New York Knicks waived Chauncey Billups, putting the team well under the salary cap. They then completed a trade for Tyson Chandler, going back over the cap in the process. Under the rules that were in place from 2005-2011, the Knicks' only option for filling the remaining spots on their roster would have been signing players to the veteran's minimum salary. (That's what happened to the Miami Heat in 2010, when their deals for LeBron James, Chris Bosh and Mike Miller put them over the salary cap. You're deeply sympathetic to their plight, I know.)
The 2011 CBA introduces a new exception for teams in the Knicks' situation. The "room exception" allows teams to offer a max contract of two years at $2.5 million to free agents.
That's just half of what capped-out teams can offer via the mid level exception, which is capped at four-year deals with a starting salary of $5 million for teams that are over the cap but under the luxury tax threshold.
