So a couple of papers have been reporting that the Knicks have received the exception for Luc worth 2.8M. Dave D'Allesandro has written that the Knicks need to use it by Oct. 1st, or lose it forever. This might not be true. According to Larry Coon's CBA site...
If a player is disabled between July 1 and November 30, the team must acquire the replacement player within 45 days. If the player is disabled between December 1 and June 30, and the physician determines that the player will be out the entire following season as well, then the team has until October 1 to sign a replacement.
From that it would seem that the Knicks would get 45 days to find a player.
Also, the exception may be used to create additional room when matching salaries for trades. When used for trade, it is treated in a similar fashion to the traded player exception. This brings up some possible trade scenerios that might not previously been possible. Is Burrell insurance for the possible trading of Spree? Maybe.