Are we taking into consideration players contracts as well with this?
Here's the deal on contracts:
You can draft or trade for whatever players you want, regardless of salary. There's no hard cap your team needs to fit under.
However, at the end of the draft, your team is then magically inserted into the "real" NBA, with the existing salaries of the players in effect. That means that your franchise could have a $200 million payroll. You need to take into account whether, in "real life", your owner would pay that amount, whether that's the best strategy for your franchise going forward, etc. On the other hand, you may attempt to put together a team that has a ton of flexibility going forward. It's up to you.
The only change is that for your two keepers, you're to assume that you have a "right of first refusal" going forward, meaning that you don't have to worry about them leaving in free agency. That way, franchises like Toronto can concentrate on guys like Bosh, rather than having to build around lesser guys.