EXCHANGE
AGREEMENT


 


THIS
EXCHANGE AGREEMENT (the “Agreement”), dated as of October 28, 2016, is made by and between MGT Capital
Investments, Inc., a Delaware corporation (the “Company”), and the holder of Warrants (as defined herein)
set forth on the signature page hereof (the “Holder”).


 


WHEREAS,
pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”) dated as of August 1, 2016,
by and between the Holder and the Company, the Holder, among things, purchased from the Company warrants (the “Warrants”)
to purchase an aggregate of three hundred thousand (300,000) shares of the Company’s common stock, par value $0.001 per
share;


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933,
as amended (the “Securities Act”), the Company desires to exchange with the Holder, and the Holder desires
to exchange with the Company, the Warrants for three hundred thousand (300,000) shares of the Company’s common stock, par
value $0.001 per share.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and Holder agree as follows:


 


1.
Terms of the Exchange. The Company and Holder agree that the Holder will exchange the Warrants, without the payment of
any exercise price therefore, and will relinquish any and all other rights he may have under the Warrants in exchange for Three
Hundred Thousand (300,000) shares of the Company’s common stock (the “Exchange Shares”).


 


2.
Closing. Upon satisfaction of the conditions set forth herein, a closing shall occur at the principal offices of the Company,
or such other location as the parties shall mutually agree. At closing, Holder shall deliver certificates representing the Warrants
to the Company and the Company shall deliver to such Holder a certificate representing the Exchange Shares, in the name(s) and
amount(s) as requested by the Holder.


 


3.
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.


 


4.
Representations and Warranties of the Holder. The Holder represents and warrants, as of the date hereof and as of the closing,
to the Company as follows:


 


a.
Authorization; Enforcement. The Holder has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement by the Holder and the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Holder and no further action is required by the Holder. This Agreement
has been (or upon delivery will have been) duly executed by the Holder and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Holder enforceable against the Holder in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.


 




    	 



    	 



    

 


b.
Tax Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences
of this investment and the transactions contemplated by this Agreement. With respect to such matters, the Holder relies solely
on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder
understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement.


 


c.
Information Regarding Holder. Holder is an “accredited investor”, as such term is defined in Rule 501 of Regulation
D promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities
Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities
of companies in private placements in the past and, with its representatives, has such knowledge and experience in financial,
tax and other business matters as to enable the Holder to utilize the information made available by the Company to evaluate the
merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative
investment. Holder has the authority and is duly and legally qualified to purchase and own the Exchange Shares. Holder is able
to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.


 


d.
Legend. The Holder understands that Exchange Shares have been issued pursuant to an exemption from registration or qualification
under the Securities Act and applicable state securities laws, and except as set forth below, the Exchange Shares shall bear any
legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock certificates):


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.


 




    	 



    	 



    

 


e.
Removal of Legends. Certificates evidencing the Exchange Shares shall not be required to contain the legend set forth in
Section 4(d) above or any other legend (i) while a registration statement covering the resale of such Exchange Shares is effective
under the Securities Act, (ii) following any sale of such Exchange Shares pursuant to Rule 144 (as defined herein) (assuming the
transferor is not an affiliate of the Company), (iii) if such Exchange Shares are eligible to be sold, assigned or transferred
under Rule 144 and the subscriber is not an affiliate of the Company (provided that the Holder provides the Company with reasonable
assurances that such Exchange Shares are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion
of the Holder’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided
that the Holder provides the Company with an opinion of counsel to the Holder, in a generally acceptable form, to the effect that
such sale, assignment or transfer of the Exchange Shares may be made without registration under the applicable requirements of
the Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by the Commission). If a legend is not required pursuant
to the foregoing, the Company shall no later than three (3) business days following the delivery by the Holder to the Company
or the transfer agent (with notice to the Company) of a legended certificate representing such Exchange Shares (endorsed or with
stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from the Holder as may be required above in this Section 4(e), as directed by the Holder, either:
(A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program and
such securities are Exchange Shares, credit the aggregate number of shares of common stock to which the Holder shall be entitled
to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B)
if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver
(via reputable overnight courier) to the Holder, a certificate representing such Exchange Shares that is free from all restrictive
and other legends, registered in the name of the Holder or its designee. The Company shall be responsible for any transfer agent
fees or DTC fees with respect to any issuance of Exchange Shares or the removal of any legends with respect to any Exchange Shares
in accordance herewith, including, but not limited to, fees for the opinions of counsel rendered to the transfer agent in connection
with the removal of any legends.


 


f.
Restricted Securities. The Holder understands that: (i) the Exchange Shares have not been and are not being registered
under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) the Holder shall have delivered to the Company (if requested by the Company) an opinion
of counsel to the Holder, in a form reasonably acceptable to the Company, to the effect that such Exchange Shares to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Holder
provides the Company with reasonable assurance that such Exchange Shares can be sold, assigned or transferred pursuant to Rule
144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”);
and (ii) any sale of the Exchange Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144,
and further, if Rule 144 is not applicable, any resale of the Exchange Shares under circumstances in which the seller (or the
Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and regulations of the SEC promulgated thereunder.


 


5.
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to
the Holder:


 


a.
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the “Exchange Documents”) and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors of the Company or the Company’s stockholders
in connection therewith. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.


 




    	 



    	 



    

 


b.
Organization and Qualification. Each of the Company and its subsidiaries (the “Subsidiaries”) are entities
duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently
proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect
on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or
in any of the other Exchange Documents or (iii) the authority or ability of the Company to perform any of its obligations under
any of the Exchange Documents. Other than its Subsidiaries, there is no Person (as defined below) in which the Company, directly
or indirectly, owns capital stock or holds an equity or similar interest. “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and
any governmental entity or any department or agency thereof.


 


c.
No Conflict. The execution, delivery and performance of the Exchange Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Certificate of Incorporation
(as defined below) or other organizational documents of the Company or any of its Subsidiaries, any capital stock of the Company
or any of its Subsidiaries or Bylaws (as defined below) of the Company or any of its Subsidiaries, (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
foreign, federal and state securities laws and regulations and the rules and regulations of principal market in which the Company’s
securities are listed (the “Principal Market”) applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.


 


d.
No Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of,
or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Exchange
Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date of this Agreement, and neither the Company nor any of its Subsidiaries is aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by the Exchange Documents.


 


e.
Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein,
the offer and issuance by the Company of the Exchange Shares is exempt from registration under the Securities Act. The Company
covenants and represents to the Holder that neither the Company nor any of its Subsidiaries has received, anticipates receiving,
has any agreement to receive or has been given any promise to receive any consideration from the Holder or any other Person in
connection with the transactions contemplated by the Exchange Documents.


 


f.
Issuance of Exchange Shares. The issuance of the Exchange Shares is duly authorized and upon issuance in accordance with
the terms of the Exchange Documents shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges
and other encumbrances with respect to the issue thereof.


 




    	 



    	 



    

 


g.
Equity Capitalization. Except as disclosed in the SEC Documents (as defined below): (i) none of the Company’s or
any Subsidiary’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company or any Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its
Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any amounts filed in connection
with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under the Securities Act; (vi) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of the Exchange Shares; (viii) neither the Company
nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement; and (ix) neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed
in the in the Company’s filings with the Commission (the “SEC Documents”) which are not so disclosed
in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective
businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. True, correct and
complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into, or exercisable or exchangeable for, shares of common stock and the material
rights of the holders thereof in respect thereto are incorporated in, or have been disclosed in, the SEC Documents.


 


(h)
Shell Company Status. The Company is not an issuer identified in Rule 144(i)(1) of the Securities Act. The Company is,
and has been for a period of at least 90 days, subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.


 


6.
Additional Acknowledgements. The Holder and the Company confirm that the Company has not received any consideration for
the transactions contemplated by this Agreement. Pursuant to Rule 144 promulgated by the Commission pursuant to the Securities
Act and the rules and regulations promulgated thereunder as such Rule 144 may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission having substantially the same effect as such Rule 144, the holding period of
the Exchange Shares tacks back to August 1, 2016, the issue date of the Warrants. The Company agrees not to take a position contrary
to this paragraph.


 


7.
Miscellaneous.


 


a.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns.


 




    	 



    	 



    

 


b.
Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of
the State of New York without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of New York located in The City of New York, Borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or therewith or with any transaction contemplated hereby
or thereby, and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


c.
Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction.


 


d.
Counterparts/Execution. This Agreement may be executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains an electronic file
of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or electronic file signature page (as the
case may be) were an original thereof.


 


e.
Notices. Any notice or communication permitted or required hereunder shall be in writing and shall be deemed sufficiently
given if hand-delivered or sent (i) postage prepaid by registered mail, return receipt requested, or (ii) by facsimile, to the
respective parties as set forth below, or to such other address as either party may notify the other in writing.


 


	 	If
    to the Company, to:	MGT
    Capital Investments
	 	 	500
    Mamaroneck Avenue, Suite 320
	 	 	Attention:
    Robert Ladd, 
	 	 	Chief
    Executive Officer
	 	 	 
	 	If
    to Holder, to the address set forth on the signature page of the Holder.


 


f.
Expenses. The parties hereto shall pay their own costs and expenses in connection herewith.


 


g.
Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with regard to the subject
matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties.
This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance. Except
as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other
or future exercise of any other right, power or privilege hereunder.


 




    	 



    	 



    

 


h.
Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing
or interpreting this Agreement.


 


i.
Reporting Status. For a period of six (6) months from the date hereof, the Company shall timely file all reports required
to be filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the Company shall continue to timely file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise no longer require or permit such filings..


 


j.
Pledge of Exchange Shares. The Company acknowledges and agrees that the Exchange Shares may be pledged by the Holder in
connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Exchange Shares. The
pledge of Exchange Shares shall not be deemed to be a transfer, sale or assignment of the Exchange Shares hereunder, and if the
Holder effects a pledge of Exchange Shares it shall not be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement. The Company hereby agrees to execute and deliver such documentation
as a pledgee of the Exchange Shares may reasonably request in connection with a pledge of the Exchange Shares to such pledgee
by the Holder.


 


(Signature
Pages Follow)


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.


 


MGT
CAPITAL INVESTMENT, INC.


 


	By:	 	 
	Name:
    	 	 
	Title:
    	 	 


 


HOLDER:



 


	By:	 	 


 


Address
for Notices:


 


	 	 
	 	 
	 	 
	 	 


 


Address
for delivery of Exchange Shares: