NBA Two-Way and Exhibit 10 contracts, explained: Tracking undrafted player signings after 2023 NBA Draft

On Thursday night, 58 basketball prospects fulfilled their lifelong dreams when they heard their name called at the 2023 NBA Draft.

But for many other talented young players who weren't selected, the journey is far from over. 

Shortly after the draft concluded, NBA teams began racing to scoop up the best remaining players as undrafted free agents. It's an underrated part of the offseason process that can end up paying dividends for teams who sign wisely — just look at this year's Finals runners-up, the Miami Heat, who had seven undrafted free agents on their roster. 

There are a couple different contracts available for undrafted free agents: Two-Ways and Exhibit 10s. The Sporting News has you covered with everything you need to know about the different options for teams looking to sign undrafted players.

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What is a Two-Way contract?

In the NBA, a Two-Way contract is a contract that allows players to suit up for both an NBA team and that team's NBA G League affiliate. Each team is allowed to have a maximum of two players on Two-Way deals at the same time. 

There are a couple of rules that go along with this type of contract. For one, it is only available to players with up to three years of NBA experience. Players on Two-Way contracts are also limited to a maximum of 50 games with their NBA team. If the NBA team they signed with doesn't have a G League affiliate, then they will be sent to play with another team's affiliate, per SB Nation.

What is an Exhibit 10 contract?

An Exhibit 10 contract is a one-year, minimum salary contract with no other bonuses. The Exhibit 10 attachment gives NBA teams the ability to convert the contract into a Two-Way deal, but only if they do it before the start of the regular season.

They are usually non-guaranteed, allowing teams to waive the player without taking a cap hit. In that situation, the player would earn a bonus of between $5,000 to $50,000 if they remain with the team's G League affiliate for 60 days.

Exhibit 10s are handy to teams for a couple of reasons. For one, they allow the flexibility to either retain the player on a minimum deal or convert the contract to a Two-Way depending on their performance. They also allow for the player to be waived at no cap penalty if the team isn't sold on their potential. 

2023-24 NBA Two-Way and Exhibit 10 contracts: Team-by-team tracker