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Well, that rumor didn't last long.  Darko is signing with the Griz.  Chad Ford reports:

Free-agent center Darko Milicic agreed in principle to a three-year contract with the Memphis Grizzlies on Wednesday, the player's agent Marc Cornstein told Insider Chad Ford.

Cornstein refused to disclose the amount of the deal, but the starting salary is believed to be for substantially more than the $5.3 million mid-level exception.