Securities
Purchase Agreement


 


This
Securities Purchase Agreement (this “Agreement”),
dated as of May 18, 2017, is entered into by and among MGT Capital Investments, Inc.,
a Delaware corporation (“Company”), MGT Mining One, Inc., a Delaware corporation (“Mining Sub”,
and together with Company, “Borrower”), and Iliad Research and Trading,
L.P., a Utah limited partnership, its successors and/or assigns (“Investor”).


 


A.
Company and Borrower are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder
by the United States Securities and Exchange Commission (the “SEC”).


 


B.
Investor desires to purchase and Borrower desires to issue and sell, upon the terms and conditions set forth in this Agreement
(i) a Secured Convertible Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of
$1,355,000.00 (the “Note”), convertible into shares of common stock, $0.001 par value per share, of Company
(the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note,
and (ii) a Warrant to Purchase Shares of Common Stock, substantially in the form attached hereto as Exhibit B (the “Warrant”).


 


C.
Mining Sub is a wholly owned subsidiary of Company that (i) is a part of the Company’s ongoing business operations, (ii)
holds and/or controls various assets, and (iii) is a co-borrower under the Note. The proceeds from the Note will provide substantial
benefits to both Company and Mining Sub.


 


D.
This Agreement, the Note, the Warrant, the Escrow Agreement (as defined below), the Mining Sub Security Agreement (as defined
below), the Pledge Agreement (as defined below), and all other certificates, documents, agreements, resolutions and instruments
delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively
referred to herein as the “Transaction Documents”.


 


E.
For purposes of this Agreement: “Conversion Shares” means all shares of Common Stock issuable upon conversion
of all or any portion of the Note; “Warrant Shares” means all shares of Common Stock issuable upon the exercise
of or pursuant to the Warrant; and “Securities” means, collectively, the Note, the Conversion Shares, the Warrant
and the Warrant Shares.


 


NOW,
THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Company and Investor hereby agree as follows:


 


1.
Purchase and Sale of Securities.


 


1.1.
Purchase of Securities. Borrower shall issue and sell to Investor and Investor agrees to purchase from Borrower the Note
and the Warrant. In consideration thereof, Investor shall pay the Purchase Price (as defined below) to Borrower.


 


1.2.
Form of Payment. On the Closing Date (as defined below), Investor shall pay the Purchase Price, payable in United States
Dollars, by wire transfer of immediately available funds pursuant to an Escrow Agreement in substantially the form attached hereto
as Exhibit C against delivery of the Note and the Warrant.


 




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1.3.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below,
the date of the issuance and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall be
May 18, 2017, or such other mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes
to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.


 


1.4.
Collateral for the Note. The Note shall be secured by (i) the collateral set forth in that certain Security Agreement attached
hereto as Exhibit D listing all of Mining Sub’s assets as security for Mining Sub’s obligations under the Transaction
Documents (the “Mining Sub Security Agreement”), and (ii) a Pledge Agreement substantially in the form attached
hereto as Exhibit E (the “Pledge Agreement”) whereby Company is pledging all of the common stock of
Mining Sub as security for Company’s obligations under the Transaction Documents.


 


1.5.
Original Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $225,000.00 (the “OID”).
In addition, Company agrees to pay $5,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence,
monitoring and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction
Expense Amount”), all of which amount is included in the initial principal balance of the Note. The “Purchase
Price”, therefore, shall be $1,125,000.00, computed as follows: $1,355,000.00 initial principal balance, less the OID,
less the Transaction Expense Amount.


 


2.
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Effective Date:
(i) this Agreement, its execution and its delivery has been duly and validly authorized; (ii) this Agreement constitutes a valid
and binding agreement of Investor enforceable in accordance with its terms; (iii) Investor is an “accredited investor”
as that term is defined in Rule 501(a) of Regulation D of the 1933 Act; and (iv) the Investor has had the opportunity to conduct
a due diligence investigation of the Company and the Mining Sub, their respective businesses, assets, financial condition, results
of operations and prospects, and the Investor has had the opportunity to ask questions of and receive answers from management
to the satisfaction of the Investor.


 




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3.
Borrower’s Representations and Warranties.


 


3.1.
Company Representations and Warranties. Company represents and warrants to Investor that as of the Effective Date: (i)
Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and
has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly
qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary; (iii) Company has registered its Common Stock under Section
12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated to file reports
pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated
hereby and thereby, have been duly and validly authorized by Company and all necessary actions have been taken; (v) this Agreement,
the Note, the Warrant, the Escrow Agreement, the Pledge Agreement and the other applicable Transaction Documents have been duly
executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their
terms, subject as to enforceability only to general principles of equity and to bankruptcy, insolvency, moratorium, and other
similar laws affecting the enforcement of creditors’ rights generally; (vi) except as set forth under Schedule 3.1(vi),
the execution and delivery of the Transaction Documents by Company, the issuance of the Securities in accordance with the terms
hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not
conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s
formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation,
any listing agreement for the Common Stock, or (c) any existing applicable law, rule, or regulation or any applicable decree,
judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental
body having jurisdiction over Company or any of Company’s properties or assets; (vii) except as set forth under Schedule
3.1(vii), no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance
of the Securities to Investor or the entering into of the Transaction Documents; (viii) none of Company’s filings with the
SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made,
not misleading; (ix) except as set forth under Schedule 3.1(ix), the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid
extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration
of any such extension; (x) except as set forth under Schedule 3.1(x), there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company
before or by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality or
any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which
would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under,
any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a
periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous
twelve (12) months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the
1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar payments that will or would
become due and owing by Company to any person or entity as a result of this Agreement or the transactions contemplated hereby
(“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable laws and regulations
and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv) Investor shall have
no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons for fees of
a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall
indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, members, managers,
agents, and partners, and their respective affiliates, from and against all reasonable claims, losses, damages, costs (including
the reasonable costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed Broker Fees;
(xv) when issued, the Conversion Shares and the Warrant Shares will be duly authorized, validly issued, fully paid for and non-assessable,
free and clear of all liens, claims, charges and encumbrances; (xvi) neither Investor nor any of its officers, directors, stockholders,
members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers,
directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its
decision to enter into the transactions contemplated by the Transaction Documents, Company is not relying on any representation,
warranty, covenant or promise of Investor or its officers, directors, members, managers, employees, agents or representatives
other than as set forth in the Transaction Documents; (xvii) Company acknowledges that the State of Utah has a reasonable relationship
and sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto
such that the laws and venue of the State of Utah, as set forth more specifically in Section 9.3 below, shall be applicable to
the Transaction Documents and the transactions contemplated therein; and (xviii) Company has performed due diligence and background
research on Investor and its affiliates including, without limitation, John M. Fife, and, to its satisfaction, has made inquiries
with respect to all matters Company may consider relevant to the undertakings and relationships contemplated by the Transaction
Documents including, among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;
SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. Company,
being aware of the matters described in subsection (xviii) above, acknowledges and agrees that such matters, or any similar matters,
have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such
information as a defense to performance of its obligations under the Transaction Documents.


 




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3.2.
Mining Sub Representations and Warranties. Mining Sub represents and warrants to Investor that: (i) Mining Sub is a corporation
duly organized, validly existing and in good standing under the laws of its state of organization and has the requisite company
power to own its properties and to carry on its business as now being conducted; (ii) Mining Sub is duly qualified as a foreign
entity to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary; (iii) each of the Transaction Documents and the transactions contemplated hereby and
thereby, have been duly and validly authorized by Mining Sub; (iv) this Agreement, the Note, the Mining Sub Security Agreement,
the Escrow Agreement, and the other applicable Transaction Documents have been duly executed and delivered by Mining Sub and constitute
the valid and binding obligations of Mining Sub enforceable in accordance with their terms, subject as to enforceability only
to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of
creditors’ rights generally; (v) except as set forth in Schedule 3.2(v), the execution and delivery of this Agreement, the
Note, the Mining Sub Security Agreement, the Escrow Agreement, and the other applicable Transaction Documents by Mining Sub does
not and will not conflict with or result in a breach by Mining Sub of any of the terms or provisions of, or constitute a default
under (a) Mining Sub’s formation documents or operating agreement, each as currently in effect, (b) any indenture, mortgage,
deed of trust, or other material agreement or instrument to which Mining Sub is a party or by which it or any of its properties
or assets are bound, or (c) to Mining Sub’s knowledge, any existing applicable law, rule, or regulation or any applicable
decree, judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental
body having jurisdiction over Mining Sub or any of Mining Sub’s properties or assets; (vi) Mining Sub has taken no action
which would give rise to any claim by any person or entity for a brokerage commission, placement agent or finder’s fees
or similar payments by Investor relating to the Note or the transactions contemplated hereby; (vii) Investor shall have no obligation
with respect to investment fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated
in this subsection that may be due in connection with the transactions contemplated hereby and Mining Sub shall indemnify and
hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, managers, agents, and partners,
and their respective affiliates, from and against all reasonable claims, losses, damages, costs (including the reasonable costs
of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed or existing fees; and (viii) Mining
Sub has performed due diligence and background research on Investor and its affiliates including, without limitation, John M.
Fife, and, to its satisfaction, has made inquiries with respect to all matters Mining Sub may consider relevant to the undertakings
and relationships contemplated by the Transaction Documents including, among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;
SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. Mining Sub,
being aware of the matters described in subsection (viii) above, acknowledges and agrees that such matters, or any similar matters,
have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such
information as a defense to performance of its obligations under the Transaction Documents.


 




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4.
Borrower Covenants. Until all of Borrower’s obligations under all of the Transaction Documents are paid and performed
in full, or within the timeframes otherwise specifically set forth below, Company and Mining Sub, as applicable, will at all times
comply with the following covenants: (i) so long as Investor beneficially owns any of the Securities and for at least twenty (20)
Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline, as may be extended in accordance
with applicable regulations, all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and
will take all reasonable action under its control to ensure that adequate current public information with respect to Company,
as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination;
(ii) the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, (d) OTCQB, or (e) OTC Pink
Current Information; (iii) when issued, the Conversion Shares and the Warrant Shares will be duly authorized, validly issued,
fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iv) trading in Company’s
Common Stock will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease on Company’s principal trading
market; (v) Company will not make any Variable Security Issuance (as defined below) that results in Company receiving net proceeds
of less than $1,000,000.00 without Investor’s prior written consent, which consent may be granted or withheld in Investor’s
sole and absolute discretion; (vi) at Closing and on the first day of each calendar quarter for so long as the Note remains outstanding
or on any other date during which the Note is outstanding, as may be requested by Investor, Company shall cause its Chief Executive
Officer or President to provide to Investor a certificate in substantially the form attached hereto as Exhibit F (the “Officer’s
Certificate”) certifying in his personal capacity and in his capacity as Chief Executive Officer or President of Company
that Company has not made any Variable Security Issuances where Company received net proceeds of less than $1,000,000.00 without
first obtaining Investor’s written consent; (vii) if at any time the Common Stock trades below $0.005, Company shall, as
soon as practicable but in no event longer than sixty (60) days thereafter, reduce the par value of its Common Stock to $0.00001
or below; and (viii) Mining Sub will not transfer any of its assets outside of the ordinary course of business. For purposes hereof,
the term “Variable Security Issuance” means any issuance of any Company securities that (A) have or may have
conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant
to such conversion right varies with the market price of the Common Stock, or (B) are or may become convertible into Common Stock
(including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies
with the market price of the Common Stock, even if such security only becomes convertible following an event of default, the passage
of time, or another trigger event or condition. For avoidance of doubt, the issuance of shares of Common Stock under, pursuant
to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Variable Security
Issuance for purposes hereof if the number of shares of Common Stock to be issued is based upon or related in any way to the market
price of the Common Stock, including, but not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a
Section 3(a)(10) settlement, or any other similar settlement or exchange.


 


5.
Conditions to Borrower’s Obligation to Sell. The obligation of Borrower hereunder to issue and sell the Securities
to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:


 


5.1.
Investor shall have executed all applicable Transaction Documents and delivered the same to Borrower.


 


5.2.
Investor shall have delivered the Purchase Price into escrow in accordance with Section 1.2 above.


 




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6.
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities
at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that
these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:


 


6.1.
Company shall have executed this Agreement, the Note, the Warrant, the Escrow Agreement and the Pledge Agreement and delivered
the same to Investor.


 


6.2.
Mining Sub shall have executed this Agreement, the Note, the Escrow Agreement, and the Mining Sub Security Agreement and delivered
the same to Investor.


 


6.3.
Company’s Chief Executive Officer or President shall have executed the Officer’s Certificate and delivered the same
to Investor.


 


6.4.
Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA
Letter”) substantially in the form attached hereto as Exhibit G acknowledged and agreed to in writing by Company’s
transfer agent (the “Transfer Agent”).


 


6.5.
Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto
as Exhibit H evidencing Company’s approval of the Transaction Documents.


 


6.6.
Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto
as Exhibit I to be delivered to the Transfer Agent.


 


6.7.
Mining Sub shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached
hereto as Exhibit J evidencing Mining Sub’s approval of the Transaction Documents.


 


6.8.
Company and Mining Sub shall have delivered to Investor fully executed copies of all other Transaction Documents required to be
executed by either such Borrower herein or therein.


 


7.
Reservation of Shares. On the date hereof, Company will reserve 6,500,000 shares of Common Stock from its authorized and
unissued Common Stock to provide for all issuances of Common Stock under the Note and the Warrant (the “Share Reserve”).
Company further agrees to add additional shares of Common Stock to the Share Reserve in increments of 500,000 shares as and when
requested by Investor if as of the date of any such request the number of shares being held in the Share Reserve is less than
(i) three (3) times the number of shares of Common Stock obtained by dividing the Outstanding Balance (as defined in the Note)
as of the date of the request by the Redemption Conversion Price (as defined in the Note), plus (ii) three (3) times the
number of Warrant Shares (as determined pursuant to the Warrant) deliverable upon full exercise of the Warrant. Company shall
further require the Transfer Agent to hold the shares of Common Stock reserved pursuant to the Share Reserve exclusively for the
benefit of Investor and to issue such shares to Investor promptly upon Investor’s delivery of a conversion notice under
the Note or a notice of exercise under the Warrant.


 


8.
Terms of Future Financings. So long as the Note is outstanding, Company or Mining Sub of any security with any term or
condition more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly
provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more favorable term
and such term, at Investor’s option, shall become a part of the Transaction Documents for the benefit of Investor. Additionally,
if Company fails to notify Investor of any such additional or more favorable term, but Investor becomes aware that Company or
Mining Sub has granted such a term to any third party, Investor may notify Company of such additional or more favorable term and
such term shall become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable
third party. The types of terms contained in another security that may be more favorable to the holder of such security include,
but are not limited to, terms addressing conversion discounts, conversion lookback periods, interest rates, original issue discounts,
stock sale price, conversion price per share, warrant coverage, warrant exercise price, and anti-dilution/conversion and exercise
price resets.


 




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9.
Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction
Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any
provision set forth in this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction
Document shall govern.


 


9.1.
Certain Capitalized Terms. To the extent any capitalized term used in any Transaction Document is defined in any other
Transaction Document (as noted therein), such capitalized term shall remain applicable in the Transaction Document in which it
is so used even if the other Transaction Document (wherein such term is defined) has been released, satisfied, or is otherwise
cancelled or terminated.


 


9.2.
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit K) arising under this Agreement
or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the
relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit K attached
hereto (the “Arbitration Provisions”). The parties hereby acknowledge and agree that the Arbitration Provisions
are unconditionally binding on the parties hereto and are severable from all other provisions of this Agreement. By executing
this Agreement, Borrower represents, warrants and covenants that Borrower has reviewed the Arbitration Provisions carefully, consulted
with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended
to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth
in the Arbitration Provisions, and that Borrower will not take a position contrary to the foregoing representations. Borrower
acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Borrower regarding the Arbitration
Provisions.


 


9.3.
Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State
of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party
consents to and expressly agrees that exclusive venue for arbitration of any dispute arising out of or relating to any Transaction
Document or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties
obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with
any of the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of
any transfer agent services agreement or other agreement between the Transfer Agent and Company, such litigation specifically
includes, without limitation any action between or involving Company and the Transfer Agent under the TA Letter or otherwise related
to Investor in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary
restraining order, or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason)),
each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal
court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof,
(iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain
an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor
for any reason) outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper
venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing
of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally,
Company covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance
with Section 9.13 below prior to bringing or filing, any action (including without limitation any filing or action against any
person or entity that is not a party to this Agreement, including without limitation the Transfer Agent) that is related in any
way to the Transaction Documents or any transaction contemplated herein or therein, including without limitation any action brought
by Company to enjoin or prevent the issuance of any shares of Common Stock to Investor by the Transfer Agent, and further agrees
to timely name Investor as a party to any such action. Borrower acknowledges that the governing law and venue provisions set forth
in this Section 9.3 are material terms to induce Investor to enter into the Transaction Documents and that but for Borrower’s
agreements set forth in this Section 9.3 Investor would not have entered into the Transaction Documents.


 




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9.4.
Specific Performance. Borrower acknowledges and agrees that irreparable damage may occur to Investor in the event that
Borrower fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with
its specific terms. It is accordingly agreed that Investor shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions
hereof or thereof, this being in addition to any other remedy to which the Investor may be entitled under the Transaction Documents,
at law or in equity. For the avoidance of doubt, in the event Investor seeks to obtain an injunction against Borrower or specific
performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any
Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms
of the Transaction Documents.


 


9.5.
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic
calculation under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Warrant Shares,
Exercise Shares (as defined in the Warrant), Delivery Shares (as defined in the Warrant), Lender Conversion Price (as defined
in the Note), Lender Conversion Shares (as defined in the Note), Redemption Conversion Price, Redemption Conversion Shares (as
defined in the Note), Conversion Factor (as defined in the Note), Market Price (as defined in the Note), or VWAP (as defined in
the Note) (each, a “Calculation”), Borrower or Investor (as the case may be) shall submit any disputed Calculation
via email or facsimile with confirmation of receipt (i) within two (2) Trading Days after receipt of the applicable notice giving
rise to such dispute to Borrower or Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at any time
after Investor learned of the circumstances giving rise to such dispute. If Investor and Borrower are unable to agree upon such
Calculation within two (2) Trading Days of such disputed Calculation being submitted to Borrower or Investor (as the case may
be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar
Systems”). Investor shall cause Unkar Systems to perform the Calculation and notify Borrower and Investor of the results
no later than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of
the disputed Calculation shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing
such Calculation shall be paid by the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest
from the correct Calculation as determined by Unkar Systems. In the event Borrower is the losing party, no extension of the Delivery
Date (as defined in the Note) shall be granted and Borrower shall incur all effects for failing to deliver the applicable shares
in a timely manner as set forth in the Transaction Documents. Notwithstanding the foregoing, Investor may, in its sole discretion,
designate an independent, reputable investment bank or accounting firm other than Unkar Systems to resolve any such dispute and
in such event, all references to “Unkar Systems” herein will be replaced with references to such independent, reputable
investment bank or accounting firm so designated by Investor.


 




    	 	 8	 



    	 		 



    

 


9.6.
Counterparts. Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another
party’s executed counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed to
be an executed original thereof.


 


9.7.
Document Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of
the agreements, instruments, documents, and items and records governing, arising from or relating to any of Borrower’s loans,
including, without limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper
originals. The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that
such images shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such
images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment
or other proceedings, and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this
Agreement or any other Transaction Document shall be deemed to be of the same force and effect as the original manually executed
document.


 


9.8.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.


 


9.9.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.


 


9.10.
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
Borrower nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance
of doubt, all prior term sheets or other documents between Borrower and Investor, or any affiliate thereof, related to the transactions
contemplated by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into
between Borrower and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety
by the Transaction Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s)
of the Transaction Documents, the Transaction Documents shall govern.


 


9.11.
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both
parties hereto.


 




    	 	 9	 



    	 		 



    

 


9.12.
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall
be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt
therefor or by email to an executive officer, or by facsimile (with successful transmission confirmation), (ii) the earlier of
the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail,
or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and
fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other
addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other
parties hereto):




 


If
to Borrower:


 


MGT
Capital Investments, Inc.


Attn:
Robert Ladd


512
S. Magnum Street, Suite 408


Durham,
North Carolina 27701


 


With
a copy to (which copy shall not constitute notice):


Sichenzia
Ross Ference Kesner LLP


Attn:
Jay Kaplowitz, Esq.


61
Broadway


New
York, New York 10006


 


If
to Investor:


 


Iliad
Research and Trading, L.P.


Attn:
John Fife


303
East Wacker Drive, Suite 1040


Chicago,
Illinois 60601


 


With
a copy to (which copy shall not constitute notice):


 


Hansen
Black Anderson Ashcraft PLLC


Attn:
Jonathan Hansen


3051
West Maple Loop Drive, Suite 325


Lehi,
Utah 84043


 


9.13.
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be
performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without
the need to obtain Borrower’s consent thereto. Borrower may not assign its rights or obligations under this Agreement or
delegate its duties hereunder without the prior written consent of Investor.


 


9.14.
Survival. The representations and warranties of Borrower and the agreements and covenants set forth in this Agreement shall
survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Borrower
agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage
arising as a result of or related to any breach or alleged breach by Borrower of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as
they are incurred.


 


9.15.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.


 




    	 	 10	 



    	 		 



    

 


9.16.
Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in this
Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition
to every other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to
time and as often and in such order as Investor may deem expedient. The parties acknowledge and agree that upon Borrower’s
failure to comply with the provisions of the Transaction Documents, Investor’s damages would be uncertain and difficult
(if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates and future
share prices, Investor’s increased risk, and the uncertainty of the availability of a suitable substitute investment opportunity
for Investor, among other reasons. Accordingly, any fees, charges, and default interest due under the Note, the Warrant, and the
other Transaction Documents are intended by the parties to be, and shall be deemed, liquidated damages (under Borrower’s
and Investor’s expectations that any such liquidated damages will tack back to the Closing Date for purposes of determining
the holding period under Rule 144 under the 1933 Act). The parties agree that such liquidated damages are a reasonable estimate
of Investor’s actual damages and not a penalty, and shall not be deemed in any way to limit any other right or remedy Investor
may have hereunder, at law or in equity. The parties acknowledge and agree that under the circumstances existing at the time this
Agreement is entered into, such liquidated damages are fair and reasonable and are not penalties. All fees, charges, and default
interest provided for in the Transaction Documents are agreed to by the parties to be based upon the obligations and the risks
assumed by the parties as of the Closing Date and are consistent with investments of this type. The liquidated damages provisions
of the Transaction Documents shall not limit or preclude a party from pursuing any other remedy available at law or in equity;
provided, however, that the liquidated damages provided for in the Transaction Documents are intended to be in lieu of
actual damages.


 


9.17.
Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents,
if at any time Investor would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would
cause Investor (together with its affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined
in the Note), then Company must not issue to Investor the shares that would cause Investor to exceed the Maximum Percentage. The
shares of Common Stock issuable to Investor that would cause the Maximum Percentage to be exceeded are referred to herein as the
“Ownership Limitation Shares”. Company shall reserve the Ownership Limitation Shares for the exclusive benefit
of Investor. From time to time, Investor may notify Company in writing of the number of the Ownership Limitation Shares that may
be issued to Investor without causing Investor to exceed the Maximum Percentage. Upon receipt of such notice, Company shall be
unconditionally obligated to immediately issue such designated shares to Investor, with a corresponding reduction in the number
of the Ownership Limitation Shares. For purposes of this Section, beneficial ownership of Common Stock will be determined under
Section 13(d) of the 1934 Act.


 


9.18.
Attorneys’ Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce
or interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded
the most money (which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees,
or other charges awarded to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to
an additional award of the full amount of the attorneys’ fees, deposition costs, and expenses paid by such prevailing party
in connection with arbitration or litigation without reduction or apportionment based upon the individual claims or defenses giving
rise to the fees and expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award
fees and expenses for frivolous or bad faith pleading. If (i) the Note or Warrant is placed in the hands of an attorney for collection
or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal
proceeding, or Investor otherwise takes action to collect amounts due under the Note or to enforce the provisions of the Note
or the Warrant, or (ii) there occurs any bankruptcy, reorganization, receivership of Borrower or other proceedings affecting Borrower’s
creditors’ rights and involving a claim under the Note or the Warrant; then Borrower shall pay the costs incurred by Investor
for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.


 




    	 	 11	 



    	 		 



    

 


9.19.
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by
the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any
other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in
writing.


 


9.20.
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND
THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT,
OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY
ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH
PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.


 


9.21.
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.


 


9.22.
Voluntary Agreement. Borrower has carefully read this Agreement and each of the other Transaction Documents and has asked
any questions needed for Borrower to understand the terms, consequences and binding effect of this Agreement and each of the other
Transaction Documents and fully understand them. Borrower has had the opportunity to seek the advice of an attorney of Borrower’s
choosing, or has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily
and without any duress or undue influence by Investor or anyone else.


 


[Remainder
of page intentionally left blank; signature page follows]


 




    	 	 12	 



    	 		 



    

 


IN
WITNESS WHEREOF, the undersigned Investor and Borrower have caused this Agreement to be duly executed as of the date first above
written.


 


SUBSCRIPTION
AMOUNT:


 


	Principal Amount of Note:	 	$	1,355,000.00	 
	 	 	 	 	 
	Purchase Price:	 	$	1,125,000.00	 



 


	 	INVESTOR: 
	 	 	 	 
	 	Iliad Research and Trading, L.P. 
	 	 	 	 
		By:	Iliad Management, LLC, its General Partner 
	 	 	 	 
	 	 	By:	 Fife Trading, Inc., its Manager
	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	John
    M. Fife, President 



 


	 	COMPANY:
	 	 
	 	MGT
    Capital Investments, Inc.
	 	 	 
	 	By:	                         
	 	Printed Name:
    	 
	 	Title:
    	 
	 	 	 
	 	MINING
    SUB:
	 	 	 
	 	MGT
    Mining One, Inc.
	 	 	 
	 	By:	 
	 	Printed
    Name: 	 
	 	Title:
    	 


 


[Signature
Page to Securities Purchase Agreement]


 






    	 	 	 



    	 		 



    

 


ATTACHED
EXHIBITS:


 


	Exhibit
    A	Note
	Exhibit
    B	Warrant
	Exhibit
    C	Escrow
    Agreement
	Exhibit
    D	Mining
    Sub Security Agreement
	Exhibit
    E	Pledge
    Agreement
	Exhibit
    F	Officer’s
    Certificate
	Exhibit
    G	Irrevocable
    Transfer Agent Instructions
	Exhibit
    H	Company
    Secretary’s Certificate
	Exhibit
    I	Share
    Issuance Resolution
	Exhibit
    J	Mining
    Sub Secretary’s Certificate
	Exhibit
    K	Arbitration
    Provisions