The NBA Collective Bargaining Agreement is tough reading. I have read portions but cannot guarantee that I have read them correctly.
The Salary Cap is a function of prior year revenues and is set some time around the July moratorium period of the Cap year in question. By that time first round draft picks have been made, but probably not yet signed.
When the Cap number is set, one can then compare the "Team Salary" with the cap amount. The CBA tells you what is included in the "Team Salary" and it is substantially more than existing player contracts. We must also be careful not to confuse exceptions from the Salary Cap restrictions with the calculation of "Team Salary" in determining the existence or not of Cap space for signing free agents.
In addition to existing contracts, the "Team Salary" includes (1) unsigned first round draft picks at the Rookie Scale amounts, (2) the team's free agents at amounts that are substantially more than the prior year contract amounts, and (3) unused bi-annual, mid-level and some other exceptions to the Salary Cap restrictions.
We do not have a 2010 first round pick so our "Team Salary" will not be burdened with a rookie scale amount. We have plenty of free agents. We can avoid inclusion of salary amounts attributed to them by renouncing our Bird or other rights. If we renounce, we can only use Salary Cap space or salary cap exceptions to resign. We can also renounce unused salary cap exceptions, i.e., bi-annual, mid-level, etc. to free them from inclusion in the "Team Salary."
Once we reduce our "Team Salary" to a number below the Salary Cap, we can use the difference to sign free agents.
After we sign any free agent we can use whatever Salary Cap amount that may be left and, thereafter, any exceptions to the Salary Cap we have not renounced. Apparently one exception always available is the "Minimum Player Salary Exception."
There must be a roster of at least 12. We could use the "Minimum Player Salary Exception" to fill up the roster. I believe a "veteran" could be signed at the veteran's minimum.
It would help if we could move Jefferies and/or Curry before the trade deadline.