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Peavy agreed to a two-way contract with the Thunder on Friday, Shams Charania of ESPN reports.
The Grizzlies cut Peavy loose while he tended to an ankle injury during training camp, but it didn't take particularly long for the forward to find another home. Peavy is replacing Otega Oweh (Achilles), who was was waived earlier Friday, on the Thunder's roster.
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