Thought I'd update this thread with the details of the BAE from Larry Coon:
BI-ANNUAL EXCEPTION -- This exception is available only to teams that are below the "apron" (i.e., not paying luxury tax, or less than $4 million above the tax line). This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes them above the apron. It cannot be used if the team has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception. It allows a team to sign any free agent, starting at up to the following amounts:
Season First-year salary
2011-12 $1.900 million
2012-13 $1.957 million
2013-14 $2.016 million
2014-15 $2.077 million
2015-16 $2.139 million
2016-17 $2.203 million
2017-18 $2.269 million
2018-19 $2.337 million
2019-20 $2.407 million
2020-21 $2.479 million
This exception may not be used two years in a row (and if this exception was used under the previous CBA in 2010-11, it may not be used in 2011-12). It may be split and given to more than one player, and can be used to sign players for up to two years, with raises limited to 4.5%. Also see question number 26 for more information on the availability and use of this exception.
A team that uses its Bi-Annual exception cannot go above the apron for the remainder of that season. In other words, once a team uses its Bi-Annual exception, the apron effectively becomes a hard cap for the remainder of that season4. This eliminates any potential loophole where a team could first use its Bi-Annual exception and subsequently add salary to go above the apron, when doing so in the opposite order (adding salary first, and then using the exception) would be illegal.
A different team salary definition is used for determining whether a team is above or below the apron. See question number 14 for details. In addition, this exception begins to pro-rate downward daily starting on January 10 each season (see question numbers 26 and 28), and expires following the last day of the regular season.