Article 27 RIGHT OF SET-OFF

27.1 Set-Off Calculation.

1. When a Team terminates a Player Contract in circumstances where such Team, following the termination, continues to be liable for the compensation called for by such Contract (including any Deferred Compensation), the Team’s liability for such compensation shall be reduced pro rata by any amounts earned by the player (for services as a player) from any professional basketball team during the period covered by the terminated Contract (including, but not limited to, amounts earned but not paid during such period); provided, however, that such reduction in liability shall not be more than 50% of that portion of the player’s compensation from the new team which is in excess of the Minimum Player Salary applicable at the time of termination.
2. For the purposes of this Article, a “professional basketball team” shall mean any team in any country that pays money or compensation of any kind (in excess of a stipend for living expenses) to a basketball player for rendering services to such team.

27.2 Successive Terminations.

In the event of successive terminations by NBA Teams of Player Contracts involving the same Player, the Team first to terminate shall be entitled to the right of set-off provided for by this Article until its compensation liability has been eliminated in its entirety, and the right of set-off shall then pass in order to the Team(s) terminating any subsequent Contract(s).

27.3 Deferred Compensation.

In calculating the amount of set-off to which a Team may be entitled pursuant to this Article, Deferred Compensation payable to a player for or with respect to a period covered by the terminated Contract shall be discounted on an annual basis by a percentage equal to the prime rate as set by Citibank, N.A. and in effect at the time the agreement providing for such Deferred Compensation was made.