PURCHASE
AGREEMENT


 


This
PURCHASE AGREEMENT (this “Agreement”), dated as of April 12, 2019, is entered into by and between MGT
CAPITAL INVESTMENTS, INC., a Delaware corporation (the “Company”), and Chicago Venture Partners, L.P., a Utah
limited partnership (the “Investor”).


 


WHEREAS:


 


Subject
to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to
buy from the Company, one hundred fifty (150) shares (the “Purchase Shares”) of the Company’s Series
C Convertible Preferred Stock, $0.001 par value per share (the “Preferred Stock”), which are convertible into
shares of the Company’s Common Stock, $0.001 par value per share (the “Common Stock”), for a total purchase
price of $1,500,000.00 (the “Purchase Price”).


 


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 the Investor hereby agree as follows:


 


	 	1. 	CERTAIN
    DEFINITIONS. 




 


For
purposes of this Agreement, the following terms shall have the following meanings:


 


(a) “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.


 


(b) “Base
Prospectus” means the Company’s final base prospectus, a preliminary form of which is included in the Registration
Statement, including the documents incorporated by reference therein.


 


(c) “Business
Day” means any day on which the Principal Market is open for trading, including any day on which the Principal Market
is open for trading for a period of time less than the customary time.


 


(d) “Confidential
Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment),
which is designated as “Confidential,” “Proprietary” or some similar designation. Information communicated
orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to
a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly
known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes
publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action
or inaction of the receiving party; (iii) is already in the possession of the receiving party without confidential restriction
at the time of disclosure by the disclosing party as shown by the receiving party’s files and records immediately prior
to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s
obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing
party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party
prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information
from public disclosure.


 



    	 	 	 



     


    




 





(e) “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 


(f)
 “DTC” means The Depository Trust Company, or any successor performing substantially the same function
for the Company.


 


(g) “DWAC
Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and
without restriction on resale and (iii) timely credited by the Company to the Investor or its designee’s specified Deposit/Withdrawal
at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar program hereafter
adopted by DTC performing substantially the same function.


 


(h)
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.


 


(i) “Initial
Prospectus Supplement” means the prospectus supplement of the Company relating to the Purchase Shares, including the
accompanying Base Prospectus, to be prepared and filed by the Company with the SEC pursuant to Rule 424(b)(5) under the Securities
Act and in accordance with Section 5(a) hereof, together with all documents and information incorporated therein by reference.


 


(j) “Loan
Documents” means that certain Exchange Agreement, that certain Convertible Promissory Note (the “Note”),
the form of which is attached hereto as Exhibit A, and the other documents associated therewith.


 


(k) “Material
Adverse Effect” means any material adverse effect on (i) the enforceability of any Transaction Document, (ii) the results
of operations, assets, business or financial condition of the Company and its Subsidiaries, taken as a whole, other than any material
adverse effect that resulted primarily from (A) any change in the United States or foreign economies or securities or financial
markets in general that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, (B) any
change that generally affects the industry in which the Company and its Subsidiaries operate that does not have a disproportionate
effect on the Company and its Subsidiaries, taken as a whole, (C) any change arising in connection with earthquakes, hostilities,
acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of
war, sabotage or terrorism or military actions existing as of the date hereof, (D) any action taken by the Investor, its affiliates
or its successors and assigns with respect to the transactions contemplated by this Agreement, (E) the effect of any change in
applicable laws or accounting rules that does not have a disproportionate effect on the Company and its Subsidiaries, taken as
a whole, or (F) any change resulting from compliance with terms of this Agreement or the consummation of the transactions contemplated
by this Agreement, or (iii) the Company’s ability to perform in any material respect on a timely basis its obligations under
any Transaction Document to be performed as of the date of determination.


 


(l) “Person”
means an individual or entity including but not limited to any limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or agency thereof.


 






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(m) “Principal
Market” means the OTCQB operated by the OTC Markets Group, Inc. (or any nationally recognized successor thereto); provided,
however, that in the event the Company’s Common Stock is ever listed or traded on The NASDAQ Capital Market, The NASDAQ
Global Market, The NASDAQ Global Select Market, the New York Stock Exchange, the NYSE American, the NYSE Arca, the OTC Bulletin
Board, or the OTCQX operated by the OTC Markets Group, Inc. (or any nationally recognized successor to any of the foregoing),
then the “Principal Market” shall mean such other market or exchange on which the Company’s Common Stock is
then listed or traded.


 


(n) “Prospectus”
means the Base Prospectus, as supplemented by any Prospectus Supplement (including the Initial Prospectus Supplement), including
the documents and information incorporated by reference therein.


 


(o) “Prospectus
Supplement” means any prospectus supplement to the Base Prospectus (including the Initial Prospectus Supplement) filed
with the SEC pursuant to Rule 424(b) under the Securities Act in connection with the transactions contemplated by this Agreement,
including the documents and information incorporated by reference therein.


 


(p) “Registration
Statement” means the effective registration statement on Form S-3 (Commission File No. 333-225589) filed by the Company
with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including all shares of Common
Stock issuable upon conversion of the Purchase Shares (“Conversion Shares”), and certain other securities,
as such Registration Statement has been or may be amended and supplemented from time to time, including all documents filed as
part thereof or incorporated by reference therein, and including all information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430B of the Securities Act, including any comparable successor registration statement filed by the Company with
the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including all Conversion Shares.


 


(q) “SEC”
means the U.S. Securities and Exchange Commission.


 


(r) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(s) “Subsidiary”
means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the
voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K
promulgated under the Securities Act.


 


(t) “Transaction
Documents” means, collectively, this Agreement, the Loan Documents, and the schedules and exhibits hereto and thereto,
and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties hereto in connection
with the transactions contemplated hereby and thereby.


 


(u)
“Transfer Agent” means VStock Transfer LLC, or such other Person who is then serving as the transfer agent
for the Company in respect of the Common Stock.


 


	 	2.


 


	PURCHASE OF PREFERRED STOCK.






 





Subject
to the terms and conditions set forth in this Agreement, the Company desires to sell to the Investor, and the Investor desires
to purchase from the Company, the Purchase Shares as follows:


 






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(a) Purchase
of Preferred Stock. Upon the satisfaction of the conditions set forth in Sections 7 and 8 hereof (the “Closing”
and the date of satisfaction of such conditions the “Closing Date”), the Investor shall purchase the Purchase
Shares from the Company, and the Company shall issue or cause to be issued and sold to the Investor, the Purchase Shares, for
the Purchase Price.


 


(b)
 Payment of Purchase Price. The Investor shall pay the Purchase Price, less $10,000.00 to cover the Investor’s
legal, due diligence and other transactional expenses, to the Company as full payment for all of the Purchase Shares to be purchased
by it hereunder by wire transfer of immediately available funds on the same Business Day that the Transfer Agent enters a book
entry credit in the Investor’s name for all of the Purchase Shares, if all of the Purchase Shares are so received by the
Investor before 1:00 p.m., Eastern time, or, if any of the Purchase Shares are received by the Investor after 1:00 p.m., Eastern
time, the next Business Day. All payments made under this Agreement shall be made in lawful money of the United States of America
or wire transfer of immediately available funds to the account designated by the Company by written notice to the Investor prior
to the date of this Agreement.


 


		3.




	INVESTOR’S REPRESENTATIONS AND WARRANTIES.



 


The
Investor represents and warrants to the Company that as of the date hereof and as of the Closing Date:


 


(a) Organization,
Authority. Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization, with the requisite 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.


 


(c) Accredited
Investor Status. The Investor is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation
D promulgated under the Securities Act.


 


(d) Information.
The Investor understands that its investment in the Purchase Shares involves a high degree of risk. The Investor (i) is able to
bear the economic risk of an investment in the Purchase Shares including a total loss thereof, (ii) has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Purchase
Shares and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the
financial condition and business of the Company and others matters related to an investment in the Purchase Shares. Neither such
inquiries nor any other due diligence investigations conducted by the Investor or its representatives shall modify, amend or affect
the Investor’s right to rely on the Company’s representations and warranties contained in Section 4 below. The Investor
has sought such accounting, legal and tax advice from its own independent advisors as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Purchase Shares.


 


(e) No
Governmental Review. The Investor understands that no U.S. federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Purchase Shares or the fairness or suitability of an investment
in the Purchase Shares nor have such authorities passed upon or endorsed the merits of the offering of the Purchase Shares.


 






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(f) Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is
a valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 


(g) No
Short Selling. The Investor represents and warrants to the Company that at no time prior to the date of this Agreement has
the Investor or any of its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or
indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the
Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.


 


	 	4.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.









 


The
Company represents and warrants to the Investor that, except as set forth in the disclosure schedules attached hereto, which exceptions
shall be deemed to be a part of the representations and warranties made hereunder, as of the date hereof and as of the Closing
Date:


 


(a) Organization
and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the
Company nor any of its Subsidiaries is in violation or default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and its Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no
proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification. The Company has no Subsidiaries except as set forth on Exhibit 21.1 to the Company’s
Annual Report on Form 10-K filed with the Commission on April 2, 2018.


 


(b) Authorization;
Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement and each of the other Transaction Documents, and to issue the Purchase Shares in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby, including without limitation, the issuance of
the Purchase Shares pursuant to this Agreement, have been duly authorized by the Company’s Board of Directors and no further
consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) this Agreement has been
and each of the other Transaction Document shall be on the Closing Date, duly executed and delivered by the Company and (iv) this
Agreement constitutes, and each other Transaction Document upon its execution on behalf of the Company on the Closing Date, shall
on the Closing Date constitute, the valid and binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies. The Board of Directors of the Company has approved the resolutions (the “Signing Resolutions”)
to authorize this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby. The Signing
Resolutions are valid, in full force and effect and have not been modified or supplemented in any respect. The Company has delivered
to the Investor a true and correct copy of minutes of a meeting of the Board of Directors of the Company at which the Signing
Resolutions were duly adopted by the Board of Directors or a unanimous written consent adopting the Signing Resolutions executed
by all of the members of the Board of Directors of the Company. Except as set forth in this Agreement, no other approvals or consents
of the Company’s Board of Directors, any authorized committee thereof, and/or stockholders is necessary under applicable
laws and the Company’s Articles of Incorporation and/or Bylaws to authorize the execution and delivery of this Agreement
or any of the transactions contemplated hereby, including, but not limited to, the issuance of the Purchase Shares.


 






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(c) Capitalization.
As of the date hereof, the authorized capital stock of the Company is set forth in the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2018. Except as disclosed in the SEC Documents (as defined below) or Schedule 4(c), (i)
no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) 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, any shares of 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 shares of 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, any shares of capital stock of the Company or any of its Subsidiaries,
(iv) 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, (v) 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, (vi) there are no securities or instruments containing anti-dilution or similar provisions that will
be triggered by the issuance of the Purchase Shares as described in this Agreement and (vii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. Unless disclosed in the
SEC Documents, the Company has furnished to the Investor true and correct copies of the Company’s articles of incorporation,
as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s Bylaws,
as amended and as in effect on the date hereof (the “Bylaws”), and summaries of the material terms of all securities
convertible into or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders
thereof in respect thereto that are not disclosed in the SEC Documents.


 


(d) Issuance
of Purchase Shares. A Certificate of Designation creating the Preferred Stock has been duly filed with the Delaware Secretary
of State and a sufficient number of shares of Common Stock to satisfy the conversion rights of the Purchased Shares have been
authorized and reserved for the benefit of the Investor. Upon issuance and payment therefor in accordance with the terms and conditions
of this Agreement, the Purchase Shares shall be duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens, charges, restrictions, rights of first refusal and preemptive rights with respect to the issue thereof, and will
be issued in compliance with all federal and state securities laws, with the holders being entitled to all rights accorded to
a holder of shares of Common Stock. The Purchase Shares are being issued pursuant to the Registration Statement and the issuance
of the Purchase Shares has been registered by the Company pursuant to the Securities Act. Upon receipt of the Purchase Shares,
the Investor will have good and marketable title to such Purchase Shares and such Purchase Shares (or Conversion Shares issuable
upon conversion of the Purchase Shares) will be immediately freely tradable.


 



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(e) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the creation and issuance of the Purchase
Shares) will not (i) result in a violation of the Articles of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the Bylaws or (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 result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of 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 conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations under clause (ii), which could not reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor its Subsidiaries is in violation of any term of or
in default under its Articles of Incorporation, any Certificate of Designation, Preferences and Rights of any outstanding series
of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively. Neither the Company nor any
of its Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations or amendments that could not reasonably be expected to have a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any
law, ordinance or regulation of any governmental entity, except for possible violations, the sanctions for which either individually
or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Except as required under the Securities
Act or applicable state securities laws and the rules and regulations of the Principal Market, the Company is not required to
obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any
regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated
by the Transaction Documents in accordance with the terms hereof or thereof. Except as set forth elsewhere in this Agreement,
all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence shall be obtained or effected on or prior to the Closing Date. Except as disclosed in the SEC Documents, since one year
prior to the date hereof, the Company has not received nor delivered any notices or correspondence from or to the Principal Market,
other than notices with respect to listing of additional shares of Common Stock and other routine correspondence. Except as disclosed
in the SEC Documents, the Principal Market has not commenced any delisting proceedings against the Company.


 


(f) SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twelve months preceding the date hereof (or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective
dates and to the Company’s knowledge, the SEC Documents complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable. None of the SEC Documents, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the
SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case
of unaudited statements, to normal, immaterial, year-end audit adjustments. Except as set forth in the SEC Documents, or otherwise
filed with the Commission and available on Edgar, the Company has received no written notices or written correspondence from the
SEC for the one year preceding the date hereof. To the Company’s knowledge, the SEC has not commenced any enforcement
proceedings against the Company.


 






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(g) Absence
of Certain Changes. Except as disclosed in the SEC Documents, since December 31, 2018, there has been no material adverse
change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries.
The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as
they become due.


 


(h) Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock or any of the Company’s or its Subsidiaries’ officers or directors
in their capacities as such, which could reasonably be expected to have a Material Adverse Effect.


 


(i) Acknowledgment
Regarding Investor’s Status. The Company acknowledges and agrees that the Investor is acting solely in the capacity
of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.
The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice
given by the Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Purchase Shares. The Company further
represents to the Investor that the Company’s decision to enter into the Transaction Documents has been based solely on
the independent evaluation by the Company and its representatives and advisors.


 


(j) No
Integrated Offering. Neither the Company, nor or any of its affiliates, nor any Person acting on their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Purchase Shares to be integrated with prior offerings by the Company in a manner that would require
stockholder approval pursuant to the rules of the Principal Market on which any of the securities of the Company are listed or
designated. The issuance and sale of the Purchase Shares hereunder does not contravene the rules and regulations of the Principal
Market.


 


(k) Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all material trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted.
None of the Company’s material trademarks, trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property
rights have expired or terminated, or, by the terms and conditions thereof, could expire or terminate within two years from the
date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries
of any material trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others, and there is no claim, action or proceeding being made or brought against, or
to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name, patents,
patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other
infringement, which could reasonably be expected to have a Material Adverse Effect.


 






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(l) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval, except where, in each of the three foregoing clauses, the
failure to so comply could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(m) Title.
Except as set forth in the SEC Documents, the Company and its Subsidiaries have good and marketable title in fee simple to all
real property owned by them and good and marketable title in all personal property owned by them that is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects (“Liens”)
and, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and its Subsidiaries and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
its Subsidiaries are in compliance with such exceptions as are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its Subsidiaries.


 


(n) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.


 


(o) Regulatory
Permits. The Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.


 






    	 	-9-	 



     


    

 





(p) Tax
Status. The Company and each of its Subsidiaries has made or filed all federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on
its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such claim.


 


(q) Transactions
With Affiliates. Except as set forth in the SEC Documents, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.


 


(r) Application
of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation or the
laws of the state of its incorporation which is or could become applicable to the Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the Purchase Shares and the Investor’s
ownership of the Purchase Shares.


 


(s) 
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents that will be timely publicly disclosed by the Company, the Company confirms that neither it nor any other Person acting
on its behalf has provided the Investor or its agents or counsel with any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed in the Registration Statement or the SEC Documents. The Company
understands and confirms that the Investor will rely on the foregoing representation in effecting purchases and sales of securities
of the Company. All of the disclosure furnished by or on behalf of the Company to the Investor regarding the Company, its business
and the transactions contemplated hereby, including the disclosure schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Investor
neither makes nor has made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3 hereof.





  



    	 	-10-	 



     


    

 





(t) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other Person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any Person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


 


(u) Registration
Statement. The Company has prepared and filed with the SEC in accordance with the provisions of the Securities Act the Registration
Statement. The Registration Statement was declared effective by order of the SEC on August 10, 2018. The Registration Statement
is effective pursuant to the Securities Act and available for the issuance of the Purchase Shares (and all Conversion Shares)
thereunder, and the Company has not received any written notice that the SEC has issued or intends to issue a stop order or other
similar order with respect to the Registration Statement or the Prospectus or that the SEC otherwise has (i) suspended or withdrawn
the effectiveness of the Registration Statement or (ii) issued any order preventing or suspending the use of the Prospectus or
any Prospectus Supplement, in either case, either temporarily or permanently or intends or has threatened in writing to do so.
The “Plan of Distribution” section of the Prospectus permits the issuance of the Purchase Shares (and all Conversion
Shares) under the terms of this Agreement. At the time the Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the Securities Act, the
Registration Statement and any amendments thereto complied and will comply in all material respects with the requirements of the
Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading; and the Base Prospectus and any Prospectus Supplement
thereto, at the time such Base Prospectus or such Prospectus Supplement thereto was issued and on the Closing Date, complied and
will comply in all material respects with the requirements of the Securities Act and did not and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that this representation and warranty does not apply to statements in or
omissions from any Prospectus Supplement made in reliance upon and in conformity with information relating to the Investor furnished
to the Company in writing by or on behalf of the Investor expressly for use therein. The SEC has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) of the Securities Act. The Company hereby
confirms that the issuance of the Purchase Shares (as well as Conversion Shares) to the Investor pursuant to this Agreement would
not result in non-compliance with the Securities Act or any of the General Instructions to Form S-3. The Registration Statement,
as of its effective date, meets the requirements set forth in Rule 415(a)(1)(x) pursuant to the Securities Act. The Company has
not distributed any offering material in connection with the offering and sale of any of the Purchase Shares (and all Conversion
Shares), and, until the Investor does not hold any of the Purchase Shares (or Conversion Shares), shall not distribute any offering
material in connection with the offering and sale of any of the Purchase Shares (or Conversion Shares), to or by the Investor,
in each case, other than the Registration Statement or any amendment thereto, the Prospectus or any Prospectus Supplement required
pursuant to applicable law or the Transaction Documents. The Company has not made, and agrees that unless it obtains the prior
written consent of the Investor it will not make, an offer relating to the Purchase Shares (or any Conversion Shares) that would
constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act. The Company shall comply with
the requirements of Rules 164 and 433 under the Securities Act applicable to any such free writing prospectus consented to by
the Investor, including in respect of timely filing with the SEC, legending and record keeping.





 



    	 	-11-	 



     


    

 





(v) DTC
Eligibility. The Company, through the Transfer Agent, participates in the DTC Fast Automated Securities Transfer (FAST) Program
to enable the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer (FAST)
Program.


 


(w) 
Sarbanes-Oxley. The Company is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of
2002, as amended, which are applicable to it as of the date hereof.


 


(x) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Investor shall not have any obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this Section 4(x) that may be due in connection with
the transactions contemplated by the Transaction Documents.


 


(y) Investment
Company. The Company is not required to be registered as, and immediately after receipt of payment for the Purchase Shares
will not be required to be registered as, an “investment company” within the meaning of the Investment Company Act
of 1940, as amended.


 


(z) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock pursuant to the Exchange Act nor has the Company received any notification that the SEC is currently contemplating
terminating such registration. Except as disclosed in the SEC Documents, the Company has not, in the twelve (12) months preceding
the date hereof, received any notice from any Person to the effect that the Company is not in compliance with the listing or maintenance
requirements of the Principal Market. Except as disclosed in the SEC Documents, the Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


 


(aa) Accountants.
The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are
an independent registered public accounting firm as required by the Securities Act.


 


(bb) No
Market Manipulation. The Company has not, and to its knowledge no Person acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Purchase Shares, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Purchase Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.


 


(cc) Shell
Company Status. The Company is not currently, and for at least the last 12 months has not been, an issuer identified in Rule
144(i)(1) under the Securities Act.





 



    	 	-12-	 



     


    

 


	 	5.

	COVENANTS.






 





(a) Filing
of Current Report and Initial Prospectus Supplement. The Company agrees that it shall, within the time required under the
Exchange Act, file with the SEC a report on Form 8-K relating to the transactions contemplated by, and describing the material
terms and conditions of, the Transaction Documents (the “Current Report”). The Company further agrees that
it shall, within the time required under Rule 424(b) under the Securities Act, file with the SEC the Initial Prospectus Supplement
pursuant to Rule 424(b)(5) under the Securities Act, which Initial Prospectus Supplement shall specifically relate to the Purchase
Shares (and all Conversion Shares) and shall describe the material terms and conditions of the Transaction Documents, contain
information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities
Act, and disclose all information relating to the Purchase Shares and the transactions contemplated by the Transaction Documents
required to be disclosed in the Registration Statement and the Prospectus as of the date of the Initial Prospectus Supplement,
including, without limitation, information required to be disclosed in the section captioned “Plan of Distribution”
in the Prospectus. The Company shall permit the Investor to review and comment upon the final pre-filing draft versions of the
Current Report and the Initial Prospectus Supplement at least two (2) Business Days prior to their filing with the SEC and the
Company shall give reasonable consideration to all such comments. The Investor shall use its reasonable best efforts to comment
upon the final pre-filing draft versions of the Current Report and the Initial Prospectus Supplement within one (1) Business Day
from the date the Investor receives them from the Company. The Investor shall furnish to the Company such information regarding
itself, the Purchase Shares beneficially owned by it and the intended method of distribution thereof, including any arrangement
between the Investor and any other Person relating to the sale or distribution of the Purchase Shares, as shall be reasonably
requested by the Company in connection with the preparation and filing of the Current Report and the Initial Prospectus Supplement,
and shall otherwise cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing
of the Current Report and the Initial Prospectus Supplement with the SEC.


 


(b) Blue
Sky. The Company shall take all such action, if any, as is reasonably necessary in order to obtain an exemption for or to
register or qualify (i) the issuance of the Purchase Shares to the Investor under this Agreement and (ii) any subsequent resale
of all Purchase Shares (or Conversion Shares) by the Investor, in each case, under applicable securities or “Blue Sky”
laws of the states of the United States in such states as is reasonably requested by the Investor from time to time, and shall
provide evidence of any such action so taken to the Investor.


 


(c) Listing/DTC.
The Company shall promptly secure the listing of all Conversion Shares on the Principal Market (subject to official notice of
issuance) and upon each other national securities exchange or automated quotation system, if any, upon which the Common Stock
is then listed, and shall use commercially reasonable efforts to maintain, so long as any shares of Common Stock shall be so listed,
such listing of all such Conversion Shares. The Company shall use commercially reasonable efforts to maintain the listing of the
Common Stock on the Principal Market and shall comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules and regulations of the Principal Market. Neither the Company nor any of its Subsidiaries shall take
any action that would reasonably be expected to result in the delisting or suspension of the Common Stock on the Principal Market.
The Company shall promptly, and in no event later than the following Business Day, provide to the Investor copies of any notices
it receives from any Person regarding the continued eligibility of the Common Stock for listing on the Principal Market; provided,
however, that the Company shall not be required to provide the Investor copies of any such notice that the Company reasonably
believes constitutes material non-public information and the Company would not be required to publicly disclose such notice in
any report or statement filed with the SEC and under the Exchange Act or the Securities Act. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section 5(c). The Company shall take all action necessary to
ensure that its Common Stock can be transferred electronically as DWAC Shares.


 



    	 	-13-	 



     


    

 





(d) Prohibition
of Short Sales and Hedging Transactions. During the term of this Agreement, the Investor will not directly or through an affiliate
engage in any open market Short Sales (as defined below) of the Common Stock; provided; however, that unless and until
the Company has affirmatively demonstrated by the use of specific evidence that the Investor is engaging in open market Short
Sales, the Investor shall be assumed to be in compliance with the provisions of this Section and the Company shall remain fully
obligated to fulfill all of its obligations under the Transaction Documents; and provided, further, that (i) the Company shall
under no circumstances be entitled to request or demand that the Investor either (A) provide trading or other records of Investor
or of any party or (B) affirmatively demonstrate that the Investor or any other party has not engaged in any such Short Sales
in breach of these provisions as a condition to the Company’s fulfillment of its obligations under any of the Transaction
Documents, (ii) the Company shall not assert the Investor’s or any other party’s failure to demonstrate such absence
of such Short Sales or provide any trading or other records of the Investor or any other party as all or part of a defense to
any breach of the Company’s obligations under any of the Transaction Documents, and (iii) the Company shall have no setoff
right with respect to any such Short Sales. As used herein, “Short Sale” has the meaning provided in Rule 3b-3
under the 1934 Act.


 


(e) Share
Reserve. On the date hereof, the Company will reserve 100,000,000 shares of Common Stock from its authorized and unissued
Common Stock to provide for all issuances of Common Stock upon conversions of the Purchase Shares (the “Share Reserve”).
The Company further agrees to add additional shares of Common Stock to the Share Reserve in increments of 5,000,000 shares as
and when requested by the Investor if as of the date of any such request the number of shares being held in the Share Reserve
is less than three (3) times the number of shares of Common Stock obtained by dividing the number of outstanding Purchase Shares
as of the date of the request by the Market Price (as defined in the Certificate of Designation of the Company creating the Purchase
Shares). The Company shall further require its transfer agent to hold the shares of Common Stock reserved pursuant to the Share
Reserve exclusively for the benefit of the Investor and to issue such shares to the Investor promptly upon the Investor’s
delivery of a conversion notice.


 


(f) Non-Public
Information. Each party hereto agrees not to disclose any Confidential Information of the other party to any third party and
shall not use the Confidential Information for any purpose other than in connection with, or in furtherance of, the transactions
contemplated hereby. Each party hereto acknowledges that the Confidential Information shall remain the property of the disclosing
party and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by
the other party. The Company confirms that neither it nor any other Person acting on its behalf shall provide the Investor or
its agents or counsel with any information that constitutes or might constitute material, non-public information, unless a simultaneous
public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the
foregoing covenant by the Company or any Person acting on its behalf (as determined in the reasonable good faith judgment of the
Investor), in addition to any other remedy provided herein or in the other Transaction Documents, if the Investor is holding any
Purchase Shares or Conversion Shares at the time of the disclosure of material, non-public information, the Investor shall have
the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, non-public
information without the prior approval by the Company; provided the Investor shall have first provided notice to the Company that
it believes it has received information that constitutes material, non-public information, the Company shall have at least 24
hours to publicly disclose such material, non-public information prior to any such disclosure by the Investor, the Company shall
have failed to demonstrate to the Investor in writing within such time period that such information does not constitute material,
non-public information, and the Company shall have failed to publicly disclose such material, non-public information within such
time period. The Investor shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors,
officers, employees, stockholders or agents, for any such disclosure. The Company understands and confirms that the Investor shall
be relying on the foregoing covenants in effecting transactions in securities of the Company.


 






    	 	-14-	 



     


    

 





(g)
 Reserved.


 


(h) Taxes.
The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery
of any shares of Common Stock to the Investor made under this Agreement.


 


(i) Reserved.


 


(j) Stop
Orders. The Company shall advise the Investor promptly (but in no event later than 24 hours) and shall confirm such advice
in writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement to the Registration
Statement, the Prospectus, any Prospectus Supplement or for any additional information; (ii) of the Company’s receipt of
notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting
or suspending the use of the Prospectus or any Prospectus Supplement, or of the Company’s receipt of any notification of
the suspension of qualification of the Purchase Shares or Conversion Shares for offering or sale in any jurisdiction or the initiation
or contemplated initiation of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any
event, which makes any statement of a material fact made in the Registration Statement, the Prospectus or any Prospectus Supplement
untrue or which requires the making of any additions to or changes to the statements then made in the Registration Statement,
the Prospectus or any Prospectus Supplement in order to state a material fact required by the Securities Act to be stated therein
or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in
light of the circumstances under which they were made) not misleading, or of the necessity to amend the Registration Statement
or supplement the Prospectus or any Prospectus Supplement to comply with the Securities Act or any other law. The Company shall
not be required to disclose to the Investor the substance or specific reasons of any of the events set forth in clauses (i) through
(iii) of the immediately preceding sentence, but rather, shall only be required to disclose that the event has occurred. If at
any time the SEC shall issue any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending
the use of the Prospectus or any Prospectus Supplement, the Company shall use its reasonable best efforts to obtain the withdrawal
of such order at the earliest possible time. The Company shall furnish to the Investor, without charge, a copy of any correspondence
from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or the Prospectus,
as the case may be.


 






    	 	-15-	 



     


    

 





(k) Amendments
to Registration Statement; Prospectus Supplements. Except as provided in this Agreement and other than periodic and current
reports required to be filed pursuant to the Exchange Act, the Company shall not file with the SEC any amendment to the Registration
Statement or any supplement to the Base Prospectus that refers to the Investor, the Purchase Shares, the Conversion Shares, the
Transaction Documents or the transactions contemplated thereby (including, without limitation, any Prospectus Supplement filed
in connection with the transactions contemplated by the Transaction Documents), in each case with respect to which (a) the Investor
shall not previously have been advised and afforded the opportunity to review and comment thereon at least two (2) Business Days
prior to filing with the SEC, as the case may be, (b) the Company shall not have given due consideration to any comments thereon
received from the Investor or its counsel, or (c) the Investor shall reasonably object, unless the Company reasonably has determined
that it is necessary to amend the Registration Statement or make any supplement to the Prospectus to comply with the Securities
Act or any other applicable law or regulation, in which case the Company shall promptly (but in no event later than 24 hours)
so inform the Investor, the Investor shall be provided with a reasonable opportunity to review and comment upon any disclosure
referring to the Investor, the Transaction Documents or the transactions contemplated thereby, as applicable, and the Company
shall expeditiously furnish to the Investor a copy thereof. In addition, for so long as, in the reasonable opinion of counsel
for the Investor, a Prospectus is required to be delivered in connection with any acquisition or sale of Purchase Shares or Conversion
Shares by the Investor, the Company shall not file any Prospectus Supplement with respect to the Purchase Shares or Conversion
Shares without furnishing to the Investor as many copies of such Prospectus Supplement, together with the Prospectus, as the Investor
may reasonably request.


 


(l) Prospectus
Delivery. The Company consents to the use of the Prospectus (and of each Prospectus Supplement thereto) in accordance with
the provisions of the Securities Act and with the securities or “blue sky” laws of the jurisdictions in which the
Purchase Shares or Conversion Shares may be sold by the Investor, in connection with the offering and sale of the Purchase Shares
and for such period of time thereafter as a Prospectus is required by the Securities Act to be delivered in connection with sales
of the Purchase Shares and/or Conversion Shares. The Company will make available to the Investor upon request, and thereafter
from time to time will furnish to the Investor, as many copies of the Prospectus (and each Prospectus Supplement thereto) as the
Investor may reasonably request for the purposes contemplated by the Securities Act within the time during which the Prospectus
is required by the Securities Act to be delivered in connection with sales of the Purchase Shares and/or Conversion Shares. If
during such period of time any event shall occur that in the reasonable judgment of the Company and its counsel, or in the reasonable
judgment of the Investor and its counsel, is required to be set forth in the Registration Statement, the Prospectus or any Prospectus
Supplement or should be set forth therein in order to make the statements made therein (in the case of the Prospectus or any Prospectus
Supplement, in light of the circumstances under which they were made) not misleading, or if in the reasonable judgment of the
Company and its counsel, or in the reasonable judgment of the Investor and its counsel, it is otherwise necessary to amend the
Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply with the Securities Act or any other
applicable law or regulation, the Company shall forthwith prepare and, subject to Section 5(k) above, file with the SEC an appropriate
amendment to the Registration Statement or an appropriate Prospectus Supplement and in each case shall expeditiously furnish to
the Investor, at the Company’s expense, such amendment to the Registration Statement or such Prospectus Supplement, as applicable,
as may be necessary to reflect any such change or to effect such compliance. The Company shall have no obligation to separately
advise the Investor of, or deliver copies to the Investor of, the SEC Documents, all of which the Investor shall be deemed to
have notice of.


 


(m) Integration.
From and after the date of this Agreement, neither the Company, nor any of its affiliates will, and the Company shall use its
reasonable best efforts to ensure that no Person acting on any of their behalf will, directly or indirectly, make any offers or
sales of any security or solicit any offers to buy any security, under circumstances that would cause this offering of the Purchase
Shares to be integrated with other offerings of securities by the Company in a manner that would require stockholder approval
pursuant to the rules and regulations of the Principal Market on which any of the securities of the Company are listed or designated,
unless stockholder approval is obtained before the closing of such subsequent transaction in accordance with the rules of such
Principal Market.


 






    	 	-16-	 



     


    

 





(n) Use
of Proceeds. The Company will use the net proceeds from the offering of the Purchase Shares as described in the Prospectus.


 


(o) Other
Transactions. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement
or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right
of the Company to perform its obligations under any of the Transaction Documents to which it is a party, including, without limitation,
the obligation of the Company to deliver the Purchase Shares to the Investor in accordance with the terms of this Agreement.


 


	 	6.	TRANSFER AGENT INSTRUCTIONS.






 





On
the Closing Date, the Company shall issue to the Transfer Agent (and any subsequent transfer agent) irrevocable instructions,
in the form heretofore furnished to the Company, to issue the Purchase Shares and the Conversion Shares in accordance with the
terms of this Agreement (the “Irrevocable Transfer Agent Instructions”). All Purchase Shares to be issued to
or for the benefit of the Investor pursuant to this Agreement shall be issued in the form of a book entry credit in the Investor’s
name. The Company represents and warrants to the Investor that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 6 will be given by the Company to the Transfer Agent with respect to the Purchase Shares or the Conversion
Shares, and the Purchase Shares and the Conversion Shares shall otherwise be freely transferable on the books and records of the
Company. Certificates and any other instruments evidencing the Purchase Shares shall not bear any restrictive or other legend.
If the Investor effects a sale, assignment or transfer of the Purchase Shares or any Conversion Shares, the Company shall permit
the transfer and shall promptly instruct the Transfer Agent (and any subsequent transfer agent) to issue DWAC Shares, if applicable,
in such name and in such denominations as specified by the Investor to effect such sale, transfer or assignment. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Investor. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 6 will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 6, that the Investor shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause
its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer Agent (and any
subsequent transfer agent) to the extent required or requested by the Transfer Agent (or any subsequent transfer agent). Any fees
(with respect to the Transfer Agent, counsel to the Company or otherwise) associated with the issuance of such opinion shall be
borne by the Company.


 


	 	7.	CONDITIONS
    TO THE COMPANY’S OBLIGATION TO ISSUE AND SELL THE PURCHASE SHARES.


 


The
obligation of the Company hereunder to issue and sell the Purchase Shares to the Investor on the Closing Date is subject to the
satisfaction or, where legally permissible, the waiver of each of the following conditions:


 


(a) The
Investor shall have executed this Agreement and delivered the same to the Company;


 






    	 	-17-	 



     


    

 


(b) No
stop order with respect to the Registration Statement shall be pending or threatened by the SEC; and


 


(c) The
representations and warranties of the Investor shall be true and correct in all material respects as of the date hereof and as
of the Closing Date as though made at that time.


 


	 	8.	CONDITIONS
    TO THE INVESTOR’S OBLIGATION TO PURCHASE THE PURCHASE SHARES.


 


The
obligation of the Investor to purchase the Purchase Shares under this Agreement is subject to the satisfaction or, where legally
permissible, the waiver of each of the following conditions:


 


(a) The
Company shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Investor;


 


(b) The
Common Stock shall be listed or quoted on the Principal Market, trading in the Common Stock shall not have been within the last
365 days suspended by the SEC;


 


(c) The
Company shall have created the Preferred Stock and reserved the Share Reserve;


 


(d) The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to materiality in Section 4 above, in which case, the portion of
such representations and warranties so qualified shall be true and correct without further qualification) as of the date hereof
and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such date) and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Investor shall have received a certificate, executed by the CEO, President
or CFO of the Company, dated as of the Closing Date, to the foregoing effect in the form attached hereto as Exhibit B;


 


(e) The
Board of Directors of the Company shall have adopted resolutions in substantially the form previously provided to the Investor,
which shall be in full force and effect without any amendment or supplement thereto as of the Closing Date;


 


(f) The
Irrevocable Transfer Agent Instructions shall have been delivered to and acknowledged in writing by the Company and the Company’s
Transfer Agent;


 


(g) The
Company shall have delivered to the Investor a certificate evidencing the incorporation and good standing of the Company in the
State of Delaware issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business Days of the
Closing Date.


 


(h) RESERVED.


 


(i) The
Registration Statement shall be effective and no stop order with respect to the Registration Statement shall be pending or threatened
by the SEC. The Company shall have a maximum dollar amount certain of securities, including the Purchase Shares and the Conversion
Shares, registered under the Registration Statement which is sufficient to issue to the Investor not less than all of the Purchase
Shares to be purchased under the Purchase Agreement and all Conversion Shares issuable upon conversion of the Purchase Shares.
All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company
with the SEC at or during the 12-month period immediately preceding the Closing Date pursuant to the reporting requirements of
the Exchange Act shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange
Act, including any applicable extension periods contemplated by the Exchange Act;


 






    	 	-18-	 



     


    

 





(j) The
Company shall be eligible to transfer its Common Stock, including all of the Conversion Shares, electronically as DWAC Shares;


 


(k) All
federal, state and local governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction
Documents and necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and
orders of, and all filings and registrations with, all federal, state and local courts or governmental agencies and all federal,
state and local regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been obtained
or made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state
securities or “Blue Sky” laws or applicable rules and regulations of the Principal Market, or otherwise required by
the SEC, the Principal Market or any state securities regulators;


 


(l) No
statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed
by any federal, state, local or foreign court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents;


 


(m) No
action, suit or proceeding before any federal, state, local or foreign arbitrator or any court or governmental authority of competent
jurisdiction shall have been commenced or threatened, and no inquiry or investigation by any federal, state, local or foreign
governmental authority of competent jurisdiction shall have been commenced or threatened, against the Company, or any of the officers,
directors or affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the Transaction
Documents, or seeking material damages in connection with such transactions;


 


(n) No
Person shall have commenced a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law;


 


(o) The
Company, pursuant to or within the meaning of any Bankruptcy Law, shall not have (i) commenced a voluntary case, (ii) consented
to the entry of an order for relief against it in an involuntary case, (iii) consented to the appointment of a Custodian of it
or for all or substantially all of its property, or (iv) made a general assignment for the benefit of its creditors or is generally
unable to pay its debts as the same become due; and


 


(p) A
court of competent jurisdiction shall not have entered an order or decree under any Bankruptcy Law that (i) is for relief against
the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property,
or (iii) orders the liquidation of the Company or any Subsidiary.


 









    	 	-19-	 



     


    

 


	 	9.	INDEMNIFICATION.
    


 


In
consideration of the Investor’s execution and delivery of this Agreement and acquiring the Purchase Shares, and in addition
to all of the Company’s other obligations under the Transaction Documents to which it is a party, the Company shall defend,
protect, indemnify and hold harmless the Investor and all of its affiliates, stockholders, officers, directors and employees and
any of the foregoing Person’s agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by the Transaction Documents) (collectively, the “Indemnitees”) from and
against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder
is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to: (a) any misrepresentation or breach of any representation
or warranty made by the Company in any of the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction
Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement
of any of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (d) any violation
of the Securities Act, the Exchange Act, state securities or “Blue Sky” laws, or the rules and regulations of the
Principal Market in connection with the transactions contemplated by the Transaction Documents by the Company or any of its affiliates,
officers, directors or employees, (e) any untrue statement or alleged untrue statement of a material fact contained, or incorporated
by reference, in the Registration Statement or any amendment thereto or any omission or alleged omission to state therein, or
in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements
therein not misleading, or (f) any untrue statement or alleged untrue statement of a material fact contained, or incorporated
by reference, in the Prospectus, or any omission or alleged omission to state therein, or in any document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that (I) the indemnity contained in clause (c) of this Section
9 shall not apply to any Indemnified Liabilities which directly and primarily result from the fraud, gross negligence or willful
misconduct of an Indemnitee, (II) the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not apply to any
Indemnified Liabilities to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company
by or on behalf of the Investor expressly for use in any Prospectus Supplement (it being hereby acknowledged and agreed that the
written information set forth on Exhibit C attached hereto is the only written information furnished to the Company
by or on behalf of the Investor expressly for use in the Initial Prospectus Supplement), if the Prospectus was timely made available
by the Company to the Investor pursuant to Section 5(l), (III) the indemnity contained in clauses (d), (e) and (f) of this Section
9 shall not inure to the benefit of the Investor to the extent such Indemnified Liabilities are based on a failure of the Investor
to deliver or to cause to be delivered the Prospectus made available by the Company, if such Prospectus was timely made available
by the Company pursuant to Section 5(l), and if delivery of the Prospectus by the Investor was required under the Securities Act
with respect to the Purchase Shares and such delivery by the Investor would have cured the defect giving rise to such Indemnified
Liabilities, and (IV) the indemnity in this Section 9 shall not apply to amounts paid in settlement of any claim if such settlement
is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or
delayed. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law. Any required indemnification payment for any particular claim shall be made within thirty (30) days from the date the Investor
makes a written request for it. A certificate containing reasonable detail as to the amount of such indemnification submitted
to the Company by the Investor shall be conclusive evidence, absent manifest error, of the amount due from the Company to the
Investor. If any action shall be brought against any Indemnitee in respect of which indemnity may be sought pursuant to this Agreement,
such Indemnitee shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof
with counsel of its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense
of such Indemnitee, except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of
the Company and the position of such Indemnitee, in which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel.


 








    	 	-20-	 



     


    

 


	 	10.	EXCHANGE RIGHT.




 


If
at any time and for any reason, the Investor is not able to receive and deposit free trading Common Stock pursuant to conversions
of the Purchase Shares or the Company fails to deliver Conversion Shares pursuant to a conversion of the Purchase Shares within
three (3) Business Days of a valid conversion notice from the Investor, the Investor will have the right to exchange the Purchase
Shares for the Loan Documents with the Note having an initial outstanding balance equal to the then Stated Value (as defined in
the Certificate of Designation creating the Purchase Shares) of the outstanding Purchase Shares. Upon written notice from the
Investor, the Company will enter into all such documents as are necessary to consummate the exchange of the Purchase Shares for
the Note.


 


	 	11.	TERMINATION




 


This
Agreement may be terminated only as follows:


 


(a)
If pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding
against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, this Agreement shall automatically terminate without any liability
or payment to the Company (except as set forth below) without further action or notice by any Person.


 


(b)
In the event that the Closing shall not have occurred on or before April 16, 2019,due to the failure to satisfy the conditions
set forth in Sections 7 and 8 above with respect to the Closing, either the Company, on the one hand, or the Investor, on the
other hand, shall have the option to terminate this Agreement at the close of business on such date or thereafter without liability
of any party to any other party (except as set forth below); provided, however, that the right to terminate this Agreement under
this Section 11(b) shall not be available to any party if such party is then in breach of any covenant or agreement contained
in this Agreement or any representation or warranty of such party contained in this Agreement fails to be true and correct such
that the conditions set forth in Section 7(c) or Section 8(d), as applicable, could not then be satisfied. Any termination of
this Agreement pursuant to this Section 11(b) shall be effected by written notice from the Company to the Investor, or the Investor
to the Company, as the case may be, setting forth the basis for the termination hereof.


 




    	 	-21-	 



     


    

 


The
representations and warranties and covenants of the Company and the Investor contained in Sections 3, 4, 5, and 6 hereof, the
indemnification provisions set forth in Section 9 hereof and the agreements and covenants set forth in Sections 10, 11 and 12,
shall survive the Closing and any termination of this Agreement. No termination of this Agreement shall be deemed to release the
Company or the Investor from any liability for intentional misrepresentation or willful breach of any of the Transaction Documents
to which it is a party.


 


	 	12.	MISCELLANEOUS.




 


(a)
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit D) 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 D
attached hereto (the “Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction
described in Section 12(c) below may be pursued in an arbitration that is separate and apart from any other arbitration regarding
all other Claims arising under the Transaction Documents. 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, the Company represents, warrants and covenants that the Company 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 the Company will not take a position contrary to the foregoing representations.
The Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of the Company regarding
the Arbitration Provisions.


 


(b)
Governing Law; Jurisdiction; Jury Trial. 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 the 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 the Company, such
litigation specifically includes, without limitation any action between or involving the Company and the Transfer Agent under
the Irrevocable Transfer Agent Instructions or otherwise related to Investor in any way (specifically including, without limitation,
any action where the 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 the 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 12(h) 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. Company
acknowledges that the governing law and venue provisions set forth in this Section 12(b) are material terms to induce Investor
to enter into the Transaction Documents and that but for Company’s agreements set forth in this Section 12(b) Investor would
not have entered into the Transaction Documents. 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 HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 




    	 	-22-	 



     


    

 


(c)
Specific Performance. The Company acknowledges and agrees that the Investor may suffer irreparable harm in the event that
the Company 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 the Investor shall be entitled to one or more 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 Investor may be entitled under the Transaction
Documents, at law or in equity. The Company specifically agrees that following a breach of this Agreement by the Company for failure
to deliver Conversion Shares or an Event of Default (as defined in the Note) under the Note, if applicable, Investor shall have
the right to seek and receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its common
or preferred stock to any party unless the Note is being paid in full simultaneously with such issuance. Borrower specifically
acknowledges that Lender’s right to obtain specific performance constitutes bargained for leverage and that the loss of
such leverage would result in irreparable harm to Lender. For the avoidance of doubt, in the event Investor seeks to obtain an
injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document,
such action shall not be a waiver of any right of the 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, nor shall Investor’s
pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar
legal doctrines, from pursuing other Claims in the future in a separate arbitration.


 


(d)
Counterparts. 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; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file shall be
considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were
an original signature.


 


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


 




    	 	-23-	 



     


    

 


(f)
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.


 


(g)
Entire Agreement; Amendment. This Agreement and the other Transaction Documents supersede all other prior oral or written
agreements among the Investor, the Company, their respective affiliates and Persons acting on their behalf with respect to the
subject matter hereof, and this Agreement, the other Transaction Documents and the instruments referenced herein contain 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 the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such
matters. The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements,
written or oral, other than as expressly set forth in the Transaction Documents. No provision of this Agreement or the other Transaction
Documents may be amended other than by a written instrument signed by both parties hereto.


 


(h)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon
receipt when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service,
in each case properly addressed to the party to receive the same. The addresses for such communications shall be:


 


If
to the Company:


 


MGT
Capital Investments, Inc.


512
S. Mangum Street, Suite 408


Durham,
NC 27701


Telephone:


Facsimile:


E-mail:


Attention:


 


With
a copy to (which shall not constitute notice or service of process):


 


Sichenzia
Ross Ference LLP


1185
Avenue of the Americas, 37th Floor


New
York, New York 10036


Telephone:
(212) 930-9700


Facsimile:
(212) 930-9725


E-mail:
jkaplowitz@srfkllp.com


Attention:
Jay Kaplowitz, Esq.


 


If
to the Investor:


 


Chicago
Venture Partners, L.P.


Attn:
John Fife


303
East Wacker Drive, Suite 1040


Chicago,
Illinois 60601


 




    	 	-24-	 



     


    

 


With
a copy to (which shall not constitute notice or service of process):


 


Hansen
Black Anderson Ashcraft PLLC


Attn:
Jonathan Hansen


3051
West Maple Loop Drive, Suite 325


Lehi,
Utah 84043


 


If
to the Transfer Agent:


 


Telephone:


Facsimile:


Attention:


 


or
at such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or email account containing the time, date, and recipient facsimile number or
email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or email or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.


 


(i)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and any permitted
successors and assigns of the Company. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Investor, including by merger or consolidation. The Investor may not assign its rights or obligations
under this Agreement.


 


(j)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and any permitted successors
and assigns of the Company and, except as set forth in Section 9, is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.


 


(k)
Publicity. The Company shall afford the Investor and its counsel with the opportunity to review and comment upon the form
and substance of, and shall give reasonable consideration to all such comments from the Investor or its counsel on, any press
release, SEC filing or any other public disclosure by or on behalf of the Company relating to the Investor, its purchases hereunder
or any aspect of the Purchase Shares, any of the Transaction Documents or the transactions contemplated thereby, not less than
24 hours prior to the issuance, filing or public disclosure thereof. The Investor must be provided with a final version of any
such press release, SEC filing or other public disclosure at least 24 hours prior to any release, filing or use by the Company
thereof. The Company agrees and acknowledges that its failure to fully comply with this provision constitutes a Material Adverse
Effect.


 


(l)
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.


 




    	 	-25-	 



     


    

 


(m)
No Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Investor that it has
not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby.
The Investor represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or
finder in connection with the transactions contemplated hereby. The Company shall be responsible for the payment of any fees or
commissions, if any, of any financial advisor, placement agent, broker or finder relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold the Investor harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out of pocket expenses) arising in connection with any such claim.


 


(n)
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.


 


(o)
Remedies, Other Obligations, Breaches and Injunctive Relief. The Investor’s remedies provided in this Agreement,
including, without limitation, the Investor’s remedies provided in Section 9, shall be cumulative and in addition to all
other remedies available to the Investor under this Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), no remedy of the Investor contained herein shall be deemed a waiver of compliance with the provisions
giving rise to such remedy and nothing herein shall limit the Investor’s right to pursue actual damages for any failure
by the Company to comply with the terms of this Agreement. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Investor and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Investor shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required.


 


(p)
Enforcement Costs. 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 Investor hires 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 Transaction Documents or to enforce the provisions of the Transaction Documents, or (ii) there
occurs any bankruptcy, reorganization, receivership of Company or other proceedings affecting Company’s creditors’
rights and involving a claim under the Note; then Company 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.


 


(q)
Waivers. No provision of this Agreement may be waived other than in a written instrument signed by the party against whom
enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.


 


*
* * * *


 




    	 	-26-	 



     


    

 


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





 


	 	COMPANY:
	 	 
	 	MGT
    CAPITAL INVESTMENTS, INC.
	 	 
	 	By:	/s/
    Robert Lowrey
	 	Name:	Robert
    Lowrey
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	INVESTOR:
	 	 
	 	CHICAGO
    VENTURE PARTNERS, L.P.
	 	 	 
	 	By:
    Chicago Venture Management, L.L.C., its General Partner
	 	 
	 	By:
    CVM, Inc., its Manager



 


	 	By:	/s/
    John M. Fife
	 	 	John
    M. Fife, President


 




    	 	-27-	 



     


    

 


EXHIBITS





 


	Exhibit A 	Loan Documents
	Exhibit B 	Form of Officer’s Certificate
	Exhibit C	Information About the Investor Furnished to the Company
	Exhibit D 	Arbitration Provisions







 




    	 	 	 



     


    




 


THIS
NOTE (AS DEFINED BELOW) IS ISSUED IN EXCHANGE FOR (WITHOUT ANY ADDITIONAL CONSIDERATION) [___] SHARES OF SERIES C CONVERTIBLE
PREFERRED STOCK of boRRower (as defined below). FOR PURPOSES OF RULE 144 OF THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED, THIS
NOTE SHALL BE DEEMED TO HAVE BEEN ISSUED ON APRIL __, 2019.


 


CONVERTIBLE
PROMISSORY NOTE


 


U.S.
$[_________] “Original Issue Date”: April __, 2019


 


FOR
VALUE RECEIVED, MGT Capital Investments, Inc., a Delaware corporation (“Borrower”),
promises to pay in lawful money of the United States of America to the order of Chicago
Venture Partners, L.P., a Utah limited partnership, or its successors or assigns (“Lender”), the principal
sum of $[_______] and any interest, fees, charges, and late fees accrued hereunder on the date that is twelve (12) months after
the Original Issue Date (the “Maturity Date”) in accordance with the terms set forth herein. This Convertible
Promissory Note (“Note”) is issued and made effective pursuant to that certain Exchange Agreement dated as
of [_______ __, 2019], as the same may be amended from time to time (the “Exchange Agreement”), by and between
Borrower and Lender, pursuant to which Lender exchanged the Preferred Shares (as defined in the Exchange Agreement) for this Note,
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. Interest shall not accrue on the unpaid principal balance
of this Note unless an Event of Default (as defined below) occurs. Certain capitalized terms used herein are defined in Attachment
1 attached hereto and incorporated herein by this reference.


 


1.
Payment; Prepayment.


 


1.1.
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as
defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that
purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to
(c) accrued and unpaid interest, and thereafter, to (d) principal.


 


1.2.
Prepayment. Notwithstanding the foregoing, Borrower shall have the right to prepay all or any portion of the Outstanding
Balance (less such portion of the Outstanding Balance for which Borrower has received a Conversion Notice (as defined below) from
Lender where the applicable Conversion Shares have not yet been delivered). If Borrower exercises its right to prepay this Note,
Borrower shall make payment to Lender of an amount in cash equal to 140% multiplied by the portion of the Outstanding Balance
Borrower elects to repay.


 


2.
Security. This Note is unsecured.


 


3.
Lender Optional Conversion.


 


3.1.
Conversions. Lender has the right at any time after the Exchange Date until the Outstanding Balance has been paid in full,
at its election, to convert (“Conversion”) all or any portion of the Outstanding Balance into shares (each
instance of conversion is referred to herein as a “Conversion Shares”) of fully paid and non-assessable common
stock, $0.001 par value per share (“Common Stock”), of Borrower as per the following conversion formula: the
number of Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Conversion
Price (as defined below). Conversion notices in the form attached hereto as Exhibit A (each, a “Conversion Notice”)
may be effectively delivered to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement,
and all Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Conversion Shares
from any Conversion to Lender in accordance with Section 8 below.


 




    	 	 	 



     


    

 


3.2.
Conversion Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all
or any portion of the Outstanding Balance into Common Stock is the lesser of: (a) the Fixed Conversion Price; and (b) the Market
Price (the “Conversion Price”).


 


4.
Defaults and Remedies.


 


4.1.
Defaults. The following are events of default under this Note (each, an “Event of Default”): (a) Borrower
fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) Borrower fails to
deliver any Conversion Shares in accordance with the terms hereof; (c) a receiver, trustee or other similar official shall be
appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or
shall not be dismissed or discharged within sixty (60) days; (d) Borrower becomes insolvent or generally fails to pay, or admits
in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (e) Borrower makes
a general assignment for the benefit of creditors; (f) Borrower files a petition for relief under any bankruptcy, insolvency or
similar law (domestic or foreign); (g) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (h) Borrower
or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant, obligation,
condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document
(as defined in the Exchange Agreement), other than those specifically set forth in this Section 4.1 and Section [__] of the Exchange
Agreement; (i) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor, trustor,
or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this
Note is false, incorrect, incomplete or misleading in any material respect when made or furnished; (j) the occurrence of a Fundamental
Transaction without Lender’s prior written consent; (k) Borrower fails to maintain the Share Reserve (as defined in the
Purchase Agreement); (l) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written
notice to Lender; (m) any money judgment, writ or similar process is entered or filed against Borrower or any subsidiary of Borrower
or any of its property or other assets for more than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) calendar days unless otherwise consented to by Lender; (n) Borrower fails to be DWAC Eligible; (o) Borrower fails
to observe or perform any covenant set forth in Section [__] of the Exchange Agreement; or (p) Borrower, any affiliate of Borrower,
or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in any Other Agreements.


 


4.2.
Remedies. At any time and from time to time after Lender becomes aware of the occurrence of any Event of Default, Lender
may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash
at the Mandatory Default Amount. Notwithstanding the foregoing, at any time following the occurrence of any Event of Default,
Lender may, at its option, elect to increase the Outstanding Balance by applying the Default Effect (subject to the limitation
set forth below) via written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding Balance
shall be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the
Outstanding Balance shall not be immediately due and payable unless so declared by Lender (for the avoidance of doubt, if Lender
elects to apply the Default Effect pursuant to this sentence, it shall reserve the right to declare the Outstanding Balance immediately
due and payable at any time and no such election by Lender shall be deemed to be a waiver of its right to declare the Outstanding
Balance immediately due and payable as set forth herein unless otherwise agreed to by Lender in writing). Notwithstanding the
foregoing, upon the occurrence of any Event of Default described in clauses (d), (e), (f), (g) or (h) of Section 4.1, the Outstanding
Balance as of the date of acceleration shall become immediately and automatically due and payable in cash at the Mandatory Default
Amount, without any written notice required by Lender. At any time following the occurrence of any Event of Default, upon written
notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event
of Default occurred at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate permitted
under applicable law (“Default Interest”). For the avoidance of doubt, Lender may continue making Conversions
at any time following an Event of Default until such time as the Outstanding Balance is paid in full. In connection with acceleration
described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any
kind, and Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any
time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives
full payment pursuant to this Section 4.2. No such rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s
failure to timely deliver Conversion Shares upon Conversion of the Note as required pursuant to the terms hereof.


 




    	 	2	 



     


    

 


5.
Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable
obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset
it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called
for herein in accordance with the terms of this Note.


 


6.
Waiver. No waiver of any provision of this Note 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.


 


7.
Borrower Redemptions. Beginning on the first calendar day of the month following the Exchange Date and at any time thereafter
until this Note is paid in full, Lender shall have the right to redeem up to the Maximum Monthly Redemption Amount of the Outstanding
Balance per calendar month (the amount of each exercise, the “Redemption Amount”) by providing written notice
(each, a “Redemption Notice”) delivered to Borrower by facsimile, email, mail, overnight courier, or personal
delivery. Upon receipt of any Redemption Notice, Borrower shall pay the applicable Redemption Amount in cash to Lender within
three (3) Trading Days of Borrower’s receipt of such Redemption Notice.


 


8.
Method of Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following the date
of delivery of a Conversion Notice (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such
time, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated
by Lender in the applicable Conversion Notice. If Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as
designated in the Conversion Notice), via reputable overnight courier, a certificate representing the number of shares of Common
Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee.
For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless Lender
or its broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later than
the close of business on the relevant Delivery Date pursuant to the terms set forth above. Moreover, and notwithstanding anything
to the contrary herein or in any other Transaction Document, in the event Borrower or its transfer agent refuses to deliver any
Conversion Shares without a restrictive securities legend to Lender on grounds that such issuance is in violation of Rule 144
under the Securities Act of 1933, as amended (“Rule 144”), Borrower shall deliver or cause its transfer agent
to deliver the applicable Conversion Shares to Lender with a restricted securities legend, but otherwise in accordance with the
provisions of this Section 7. In conjunction therewith, Borrower will also deliver to Lender a written explanation from its counsel
or its transfer agent’s counsel explaining why the issuance of the applicable Conversion Shares violates Rule 144.


 




    	 	3	 



     


    

 


9.
Conversion Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 8,
Lender may at any time prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion, with a
corresponding increase to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes
of determining the holding period under Rule 144). In addition, for each Conversion, in the event that Conversion Shares are not
delivered by the third (3rd) Trading Day (inclusive of the day of the Conversion), a late fee equal to 2% of the applicable Conversion
Share Value rounded to the nearest multiple of $100.00 but with a floor of $500.00 per day (but in any event the cumulative amount
of such late fees for each Conversion shall not exceed 200% of the applicable Conversion Share Value) will be assessed for each
day after the third (3rd) Trading Day (inclusive of the day of the Conversion) until Conversion Share delivery is made; and such
late fee will be added to the Outstanding Balance (such fees, the “Conversion Delay Late Fees”).


 


10.
Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents,
Borrower shall not effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender
(together with its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of shares of Common Stock
outstanding on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the “Maximum
Percentage”). For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section
13(d) of the 1934 Act. By written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself
but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is
enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.


 


11.
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the
right to have any such opinion provided by its counsel.


 


12.
Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note 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. The provisions set forth in the Purchase
Agreement to determine the proper venue for any disputes are incorporated herein by this reference.


 


13.
Arbitration of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions
(as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.


 


14.
Cancellation. After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full,
shall automatically be deemed canceled, and shall not be reissued.


 


15.
Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.


 


16.
Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note and any shares of
Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of
Borrower.


 




    	 	4	 



     


    

 


17.
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with the subsection of the Purchase Agreement titled “Notices.”


 


18.
Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions
of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the
parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors.
Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this
Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s
and Borrower’s expectations that any such liquidated damages will tack back to the Original Issue Date for purposes of determining
the holding period under Rule 144).


 


19.
Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve
the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full
force and effect.


 


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


 




    	 	5	 



     


    

 


IN
WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date.


 


	 	BORROWER:
	 	 
	 	MGT
    Capital Investments, Inc.
	 	 	 
	 	By:	          
	 	Name:	 
	 	Title:	 


 


	ACKNOWLEDGED,
    ACCEPTED AND AGREED:
	 
	LENDER:
	 
	Chicago
    Venture Partners, L.P.
	 
	By:
    Chicago Venture Management, L.L.C., its General Partner
	 
	By:
    CVM, Inc., its Manager
	 	 	 
	By:	 	 
	 	John
    M. Fife, President 	 


 


[Signature
Page to Convertible Promissory Note]


 




    	 	 	 



     


    

 


ATTACHMENT
1


DEFINITIONS


 


For
purposes of this Note, the following terms shall have the following meanings:


 


A1.
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last
closing trade price, respectively, for the Common Stock on its principal market, as reported by Bloomberg, L.P. (“Bloomberg”),
or, if its principal market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price (as the case may be) then the last bid price or last trade price, respectively, of the Common Stock prior to 4:00:00
p.m., New York time, as reported by Bloomberg, or, if its principal market is not the principal securities exchange or trading
market for the Common Stock, the last closing bid price or last trade price, respectively, of the Common Stock on the principal
securities exchange or trading market where the Common Stock is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing bid price or last trade price, respectively, of the Common Stock in the over-the-counter market
on the electronic bulletin board for the Common Stock as reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for the Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for the Common Stock as reported by OTC Markets Group, Inc., and any successor thereto. If the Closing Bid Price
or the Closing Trade Price cannot be calculated for the Common Stock on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Trade Price (as the case may be) of the Common Stock on such date shall be the fair market value as mutually
determined by Lender and Borrower. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.


 


A2.
“Conversion Factor” means 70%.


 


A3.
“Conversion Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion
Notice multiplied by the Closing Trade Price of the Common Stock on the Delivery Date for such Conversion.


 


A4.
“Daily Amortization Amount” means the Outstanding Balance of the Note on the Exchange Dated divided by the
number of days in the period beginning on the Exchange Date and ending on the Maturity date.


 


A5.
“Default Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred
by (a) fifteen percent (15%) for each occurrence of any Major Default, or (b) five percent (5%) for each occurrence of any Minor
Default, and then adding the resulting product to the Outstanding Balance as of the date the applicable Event of Default occurred,
with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Event of Default
occurred; provided that the Default Effect may only be applied three (3) times hereunder with respect to Major Defaults and three
(3) times hereunder with respect to Minor Defaults; and provided further that the Default Effect shall not apply to any Event
of Default pursuant to Section 4.1(b) hereof.


 


A6.
“DTC” means the Depository Trust Company or any successor thereto.


 


A7.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.


 


A8.
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.


 


A9.
“DWAC Eligible” means that (a) Borrower’s Common Stock is eligible at DTC for full services pursuant
to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has
been approved (without revocation) by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as
an agent in the DTC/FAST Program; (d) the Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s
transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.


 


A10.
“Exchange Date” means the date the Exchange Agreement is entered into by Borrower and Lender.


 


A11.
“Fixed Conversion Price” means $0.05 per share of Common Stock, as may be adjusted pursuant to any stock splits,
stock combinations or other similar events or recapitalizations.


 




    	Attachment 1 to Convertible Promissory Note, Page 1



     


    

 


A12.
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is
the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall,
directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any
shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated with the persons
or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly
or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or
entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including
any shares of voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with
the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v)
Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize
or reclassify the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or
(b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934
Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in
Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and
outstanding voting stock of Borrower.


 


A13.
“Major Default” means any Event of Default occurring under Sections 4.1(a), 4.1(k), or 4.1(o).


 


A14.
“Mandatory Default Amount” means the Outstanding Balance following the application of the Default Effect.


 


A15.
“Market Capitalization” means a number equal to (a) the average VWAP of the Common Stock for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported
on Borrower’s most recently filed Form 10-Q or Form 10-K.


 


A16.
“Market Price” means the Conversion Factor multiplied by the lowest Closing Trade Price during the ten (10)
Trading Days immediately preceding the applicable measurement date.


 


A17.
“Maximum Monthly Redemption Amount” means Daily Amortization Amount multiplied by thirty (30) plus any accrued
but unpaid interest.


 


A18.
“Minor Default” means any Event of Default that is not a Major Default.


 


A19.
“OID” means an original issue discount.


 


A20.
“Other Agreements” means, collectively, (a) all existing and future agreements and instruments between, among
or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement
or a material agreement that affects Borrower’s ongoing business operations.


 


A21.
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as
the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar
taxes and fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees)
incurred under this Note.


 


A22.
“Purchase Agreement” means that certain Purchase Agreement dated April __, 2019 wherein Lender purchased the
Preferred Shares from Borrower.


 


A23.
“Trading Day” means any day on which the New York Stock Exchange (or such other principal market for the Common
Stock) is open for trading.


 


A24.
“VWAP” means the volume weighted average price of the Common Stock on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.


 


[Remainder
of page intentionally left blank]


 




    	Attachment 1 to Convertible Promissory Note, Page 2



     


    

 


EXHIBIT
A


 


Chicago
Venture Partners, L.P.


303
East Wacker Drive, Suite 1040


Chicago,
Illinois 60601


 


	MGT
    Capital Investments, Inc.	Date:___________________


Attn:
Robert Ladd


512
S. Magnum Street, Suite 408


Durham,
North Carolina 27701


 


CONVERSION
NOTICE


 


The
above-captioned Lender hereby gives notice to MGT Capital Investments, Inc., a Delaware corporation (the “Borrower”),
pursuant to that certain Secured Convertible Promissory Note made by Borrower in favor of Lender on March __, 2019 (the “Note”),
that Lender elects to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common
Stock of Borrower as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth
below. In the event of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative,
at the election of Lender in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized
terms used in this notice without definition shall have the meanings given to them in the Note.


 


A.
Date of Conversion: ____________


B.
Conversion #: ____________


C.
Conversion Amount: ____________


D.
Conversion Price: _______________


E.
Conversion Shares: _______________ (C divided by D)


F.
Remaining Outstanding Balance of Note: ____________*


 


*
Subject to adjustments for corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined
in the Exchange Agreement), the terms of which shall control in the event of any dispute between the terms of this Conversion
Notice and such Transaction Documents.


 


Please
transfer the Conversion Shares electronically (via DWAC) to the following account:


 


	Broker:	 	 	Address:	 
	DTC#:	 	 	 	 
	Account
    #:	 	 	 	 
	Account
    Name:	 	 	 	 


 


To
the extent the Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated
shares to Lender via reputable overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise)
to:


 


	 	 	 
	 	 	 
	 	 	 


 


[Signature
Page Follows]


 




    	Exhibit A to Convertible Promissory Note, Page 1



     


    

 


Sincerely,


 


Lender:


 


	Chicago
    Venture Partners, L.P.
	 
	By:
    Chicago Venture Management, L.L.C., its General Partner
	 
	By:
    CVM, Inc., its Manager
	 	 	 
	By:	 	 
	 	John
    M. Fife, President	 


 




    	Exhibit A to Convertible Promissory Note, Page 2