Document:

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of the May 23, 2018 by and between MGT
Capital Investments, Inc., a Delaware corporation (the “Company”), and GEMINI SPECIAL OPPORTUNITIES
FUND, LP, a Delaware limited partnership, and Black Mountain Equities, Inc., a California company (collectively, the
“Investors”).

 

WHEREAS,
upon the terms and condition stated in the Agreement and pursuant to Section 4(a)(2) of the 1933 Act (as defined below) and Rule
506 of Regulation D promulgated thereunder, the Investors wishes to purchase, and the Company wishes to sell promissory notes
in the aggregate original principal amount of $840,000, in the form attached hereto as Exhibit A (the “Notes”).

 

WHEREAS,
the parties have agreed that the obligation to repay the Notes shall be unsecured obligations of the Company; and

 

WHEREAS,
the Notes, are collectively referred to herein as the “Securities” and the offering contemplated hereby
is referred to herein as the “Offering”.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration
of the premises and the mutual agreements, representations and warranties, provisions and covenants contained herein, the parties
hereto, intending to be legally bound hereby, agree as follows:

 

1.
Purchase and Sale of Note. On the Closing Date (as hereinafter defined), subject to the terms and conditions of this Agreement,
the Investors hereby agrees to purchase, and the Company hereby agrees to sell and issue, the Notes, with such principal amount
of Note as set forth for each Investor on its signature page hereto. 

 

2.
Purchase Price. The aggregate purchase price for the Notes to be purchased by the Investors at the Closing shall be $700,000
(the “Purchase Price”). At the Closing, the Investors shall fund the Purchase Price by wire transfer
of immediately available funds to the account specified in writing by the Company prior to the date hereof.

 

3.
The Closing. Subject to the conditions set forth below, the purchase and sale of the Notes shall take place at a mutually
agreeable location, on or about the date hereof (the “Closing” and the “Closing Date”).
At the Closing, the Company shall deliver to the Investors: (i) this Agreement duly executed by the Company and (ii) the Notes
purchased hereby duly executed by the Company and registered in the name of the Investors, At the Closing, the Investors shall
deliver to the Company (x) this Agreement duly executed by the Investors and (y) the Purchase Price for the Notes.

 

4.
Closing Conditions; Certain Covenants. 

 

4.1
Conditions to the Investor’s Obligations. The obligation of the Investors to purchase the Notes to the Investors
at the Closing is subject to the fulfillment, to the Investors’ reasonable satisfaction, prior to or at the Closing, of
each of the following conditions:

 

    	 

     

    

 

(a)
Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be
true and correct in all respects on the date hereof (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date).

 

(b)
Covenants. The Company shall have performed, satisfied and complied in all respects with the covenants, agreements and
conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

 

(c)
Notes. At the Closing, the Company shall have duly executed and delivered to the Investors the Notes purchased hereby,
in each case duly executed by the Company and registered in the name of the Investors.

 

(d)
No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit or obtain substantial damages
in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

 

(e)
Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Investors, and the Investors
shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request.

 

(f)
No Consents. The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any,
necessary for the sale of the Securities.

 

4.2
Conditions to the Company’s Obligations. The obligation of the Company to sell and issue the Notes to the Investors
at the Closing is subject to the fulfillment, to the Company’s reasonable satisfaction, prior to or at the Closing, of each
of the following conditions:

 

(a)
Representations and Warranties. The representations and warranties of the Investors contained in this Agreement shall be
true and correct in all respects on the date hereof (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date).

 

(b)
Purchase Price. At the Closing, the Investors shall have tendered to the Company the Purchase Price by wire transfer of
immediately available funds to the account specified in writing by the Company prior to the date hereof. 

 

(c)
No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit, or obtain substantial damages
in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

 

(d)
Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance and form to the Company and the Company shall have
received all such counterpart originals or certified or other copies of such documents as the Company may reasonably request.

 

    	 	2	 

     

    

 

4.3
Securities Law Disclosure; Publicity. If the Company determines in its sole discretion that a Form 8-K disclosing the material
terms of the transactions contemplated hereby is required, then it will file such Form 8-K timely. The Company represents to the
Investors that the Company has publicly disclosed all material, non-public information delivered to the Investor by the Company
or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions
contemplated by this Agreement. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and
their respective officers, directors, employees and agents not to, provide the Investors with any material, non-public information
regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of the
Investors (which may be granted or withheld in the Investors’ sole discretion).

 

5.
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules or the Public Reports (as
defined herein), which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made
herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby
makes the following representations and warranties to the Investors:

 

5.1
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

 

5.3
Authorization; Enforcement. All corporate action on the part of the Company, its officers, directors and stockholders necessary
for the authorization, execution and delivery of this Agreement, the Notes, and the performance of all obligations of the Company,
and the authorization (or reservation for issuance), sale and issuance of the Notes have been taken on or prior to the date hereof.
Each of this Agreement, the Notes have been duly executed by the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with
its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.

 

5.4
Valid Issuance of the Securities. The Notes are duly authorized and, when issued and paid for in accordance with this Agreement,
will be duly and validly issued, and free and clear of all Liens imposed by the Company other than restrictions on transfer under
this Agreement and under applicable state and federal securities laws. 

 

    	 	3	 

     

    

 

5.5
Offering. Subject to the truth and accuracy of the Investor’s representations set forth in Section 6 of this Agreement,
the offer and sale of the Securities, as contemplated by this Agreement are exempt from the registration requirements of the Securities
Act of 1933, as amended (the “1933 Act”), and the qualification or registration requirements of state
securities laws or other applicable blue sky laws. Neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemptions.

 

5.6
Public Reports. The Company is current in its filing obligations under the 1934 Act, including without limitation as to
its filings of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (collectively, the
“Public Reports”). The Public Reports do not contain any untrue statement of a material fact or omit
to state any fact necessary to make any statement therein not misleading. The financial statements included within Company’s
Annual Report on Form 10-K for the year ended June 30, 2016 and for each quarterly period thereafter (the “Financial
Statements”) have been prepared in accordance with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods indicated and with each other, except that unaudited Financial Statements
may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present, in
all material respects, the financial condition and operating results of the Company as of the dates, and for the periods, indicated
therein, subject in the case of unaudited Financial Statements to normal year-end audit adjustments.

 

5.7
Compliance With Laws. The Company has not violated any law or any governmental regulation or requirement which violation
has had or would reasonably be expected to have a Material Adverse Effect on its business and the Company has not received written
notice of any such violation. The Company is not in violation of the requirements of the Trading Market and has no knowledge of
any facts or circumstances which could reasonably lead to delisting or suspension of the Common Shares in the foreseeable future.

 

5.8
Acknowledgment Regarding Investor’s Purchase of Securities. The Company acknowledges and agrees that each Investor
is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated
hereby and that such Investor is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner”
of more than 10% of the Common Shares (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges
that such Investor is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by such Investor or any
of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental
to such Investor’s purchase of the Securities. The Company further represents to such Investor that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its representatives.

 

    	 	4	 

     

    

 

6.
Representations and Warranties of the Investors. Each Investor hereby represents, warrants and covenants, as to itself
only and not the other Investor, that:

 

6.1
Authorization. The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery
of this Agreement, the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby. 

 

6.2
No Public Sale or Distribution. The Investor is (i) acquiring its Note in each case for its own account, not as a nominee
or agent, and not with a view towards, or for resale in connection with, the public sale or distribution of any part thereof,
except pursuant to sales registered or exempted under the 1933 Act. The Investor is acquiring the Securities hereunder in the
ordinary course of its business. The Investor does not presently have any contract, agreement, undertaking, arrangement or understanding,
directly or indirectly, with any individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization and a government or any department or agency thereof (a “Person”) to
sell, transfer, pledge, assign or otherwise distribute any of the Securities. 

 

6.3
Accredited Investor Status; Investment Experience. The Investor is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D. The Investor can bear the economic risk of its investment in the Securities, and has such
knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment
in the Securities.

 

6.4
Reliance on Exemptions. The Investor understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and the Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to determine the availability of such exemptions
and the eligibility of the Investor to acquire the Securities. 

 

6.5
Information. The Investor and its advisors, if any, have been furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the
Investor. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by the Investor or its advisors, if any, or its representatives
shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained
herein. The Investor understands that its investment in the Securities involves a high degree of risk. The Investor has sought
such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its
acquisition of the Securities. The Investor is relying solely on its own accounting, legal and tax advisors, and not on any statements
of the Company or any of its agents or representatives, for such accounting, legal and tax advice with respect to its acquisition
of the Securities and the transactions contemplated by this Agreement.

 

    	 	5	 

     

    

 

7.
Use of Proceeds. The Company shall use the proceeds from the sale of the Securities for general working capital purposes.

 

8.
Indemnification. In consideration of each Investor’s execution and delivery of this Agreement and acquiring the Securities
hereunder and in addition to all of the Company’s other obligations under this Agreement and the Notes, the Company shall
defend, protect, indemnify and hold harmless each Investor and each holder of any Securities and all of their stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(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 this
Agreement or the Notes, (b) any breach of any covenant, agreement or obligation of the Company contained in any of this Agreement
or the Notes, or (c) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including
for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee
that arises out of or results from (i) the execution, delivery, performance or enforcement of any of this Agreement or the Notes,
(ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, or (iii) the status of the Investor or holder of the Securities either as an investor in the Company pursuant
to the transactions contemplated by this Agreement or as a party to this Agreement (including, without limitation, as a party
in interest or otherwise in any action or proceeding for injunctive or other equitable relief). 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.

 

    	 	6	 

     

    

 

9.
Miscellaneous

 

9.1
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of the Securities).
Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

 

9.2
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of California, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of California or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in San Diego County, California, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

9.3
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

9.4
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile or email if sent during normal business
hours of the recipient; if not, then on the next Trading Day, (c) five (5) Trading Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to (a) in the case
of the Company, to MGT Capital Investments, Inc., 512 S. Mangum Street, Suite #408, Durham, NC 27701 and (b) in the case of the
Investors, as the case may be, to: (i) Gemini Special Opportunities Fund, LP, c/o Gemini Strategies, Inc., 1075
Valleyside Lane, Encinitas, CA 92024, Email: Steve@GeminiStrategies.com, Attention: Steven Winters, and (ii) Black Mountain
Equities, Inc., 13366 Greenstone Court, San Diego, CA 92131, Email: adam@blackmountainequities.com.

 

    	 	7	 

     

    

 

9.5
Amendments and Waivers. No provision of this Agreement may be amended other than by a written instrument signed by both
parties hereto. 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
exercises thereof or of any other right, power or privilege.

 

9.6
Brokers or Finder’s Fees. The Company shall indemnify and hold harmless each Investor from any liability for any
commission or compensation in the nature of a broker’s or finders’ fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

9.7
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded
and shall be enforceable in accordance with its terms.

9.8
Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties
and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein.

 

9.9
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

9.10
Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the
singular, the singular the plural, the part the whole, (b) references to any gender include all genders, (c) “including”
has the inclusive meaning frequently identified with the phrase “but not limited to” and (d) references to “hereunder”
or “herein” relate to this Agreement.

 

9.11
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate.

 

10.
Additional Defined Terms. In addition to the terms defined elsewhere in this Agreement and the Note, the following terms
have the meanings set forth in this Section 18:

 

10.1
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

    	 	8	 

     

    

 

10.2
“Common Shares” means the common stock, par value $0.001 per share, of the Company.

 

10.3
“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.

 

10.4
“Material Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability
of this Agreement or the Note, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under this Agreement or the Note.

 

10.5
“Subsidiary” means any corporation or other entity of which at least a majority of the securities or
other ownership interest having ordinary voting power for the election of directors or other persons performing similar functions
are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.

 

10.6
“Trading Day” means any day on which the Common Shares are traded on the Trading Market, provided that
“Trading Day” shall not include any day on which the Common Shares are scheduled to trade on the Trading
Market for less than 4.5 hours or any day that the Common Shares are suspended from trading during the final hour of trading on
the Trading Market (or if the Trading Market does not designate in advance the closing time of trading on the Trading Market,
then during the hour ending at 4:00:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing
by the Investor.

 

10.8
“Trading 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 Shares are 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 MKT, or the OTCQX
operated by the OTC Markets Group, Inc. (or any nationally recognized successor to any of the foregoing), then the “Trading
Market” shall mean such other market or exchange on which the Company’s Common Shares are then listed or traded.

 

[SIGNATURES
ON THE FOLLOWING PAGE]

 

    	 	9	 

     

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

	 	THE
    COMPANY
	 	 	 
	 	MGT
    CAPITAL INVESTMENTS, INC.
	 	 	 
	 	By:
    	/s/ Robert
    Ladd                            
	 	Name:
    	Robert
    Ladd
	 	Title:
    	President
    and Chief Executive

 

	INVESTOR:	 
	 	 	 
	Gemini
    Special Opportunities Fund, LP	 
	 	 
	By:	GEMINI
    STRATEGIES, INC.	 
	Its:	Investment
    Manager 	 

 

	By:	/s/
    Steven Winters	 
	Name:	Steven
    Winters	 
	Its:	President	 

 

Original
Principal Amount of Note: $600,000

Purchase
Price: $500,000

 

	INVESTOR:	 
	 	 	 
	BLACK
    MOUNTAIN EQUITIES, INC.	 
	 	 	 
	By:	/s/
    Adam Baker	 
	Name:	Adam
    Baker	 
	Its:	President	 

 

Original
Principal Amount of Note: $240,000

Purchase
Price: $200,000 (less $3,000 document preparation fee)

 

    	 

     

    

 

EXHIBIT
A

 

FORM
OF NOTENEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS PROMISSORY HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.

 

MGT
Capital Investments, Inc.

 

Promissory
Note

 

	Issuance
    Date: May 23, 2018	Original
    Principal Amount:	 	$600,000
	Note
    No. GEMNOTE3	Consideration
    Paid at Close:	 	$500,000

 

FOR
VALUE RECEIVED, MGT Capital Investments, Inc., a Delaware corporation (the “Company”), hereby promises
to pay to the order of Gemini Special Opportunities Fund, LP or registered assigns (the “Holder”) the
amount set out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion
or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding
Principal at the applicable Interest Rate from the date set out above as the Issuance Date (the “Issuance Date”)
until the same becomes due and payable, upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case
in accordance with the terms hereof).

 

The
Original Principal Amount is $600,000 (six hundred thousand dollars) plus accrued and unpaid interest and any other fees. The
Consideration is $500,000 (five hundred thousand dollars) payable by wire transfer. The Holder shall pay $500,000 of Consideration
upon closing of this Note. For purposes hereof, the term “Outstanding Balance” means the Original Principal Amount,
as reduced or increased, as the case may be, pursuant to the terms hereof, breach hereof or otherwise, plus any accrued but unpaid
interest, collection and enforcements costs, and any other fees or charges incurred under this Note.

 

(1)
GENERAL TERMS

 

(a)
Payment of Principal. The “Maturity Date” shall be March 23, 2019, and may be extended at the option
of the Holder in the event that, and for so long as, an Event of Default (as defined below) shall not have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall not have occurred and be continuing on
the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would
result in an Event of Default.

 

(b)
Interest. An interest charge of zero percent (0%) per annum (“Interest Rate”) shall accrue. Interest
hereunder shall be paid on the Maturity Date to the Holder or its assignee in whose name this Note is registered on the records
of the Company regarding registration and transfers of Notes.

 

(c)
Security. This Note is not secured.

 

(d)
Pre-Payment. The Company will be allowed to pre-pay the note to the Holder in whole or in part at any time without any
a pre-payment penalty.

 

    	 

    	 

    

 

(2)
EVENTS OF DEFAULT. 

 

(a)
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and
whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):

 

(i)
The Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this
Note (including, without limitation, the Company’s failure to pay any redemption payments or amounts hereunder) or any other
Transaction Document;

 

(ii)
The Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary
of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect
relating to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company
any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary
of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding
is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed
receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of sixty
one (61) days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the
Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company
shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or
any corporate or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the
foregoing;

 

(iii)
The Company or any subsidiary of the Company shall default in any of its obligations under any other Note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or
by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness now exists
or shall hereafter be created; and

 

(iv)
The Common Stock is suspended or delisted for trading on the Over the Counter Bulletin Board market (the “Primary Market”).

 

(v)
The Company’s Common Stock trades at or below a price of $0.01 as reported by the OTC Markets website.

 

(vi)
The Company loses its status as “DTC Eligible.”

 

(vii)
The Company shall become late or delinquent in its filing requirements as a fully-reporting issuer registered with the Securities
& Exchange Commission, subject to a 30-day cure period.

 

(b)
Upon the occurrence of any Event of Default, the Outstanding Balance shall immediately increase to 120% of the Outstanding Balance
immediately prior to the occurrence of the Event of Default (the “Default Effect”). The Default Effect shall automatically
apply upon the occurrence of an Event of Default without the need for any party to give any notice or take any other action. Upon
the occurrence of any Event of Default, the Note shall become immediately due and payable and the Borrower shall pay to the Holder,
in full satisfaction of its obligations hereunder, the Outstanding Balance, all without demand, presentment or notice, all of
which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection,
and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

    	 

    	 

    

 

(3)
MANDATORY MONTHLY PAYMENTS. Beginning on July 23, 2018 and continuing on the 23rd of every consecutive calendar month,
the Company shall make a cash payment in the amount of $66,666.66 to the Holder (the “Monthly Payment”). If
the 23rd of any calendar month is not a business day, then the Company shall make the Monthly Payment on the next business day.

 

(4)
REISSUANCE OF THIS NOTE.

 

(a)
Assignability. The Company may not assign this Note. This Note will be binding upon the Company and its successors and
will inure to the benefit of the Holder and its successors and assigns and may be assigned by the Holder to anyone of its choosing
without Company’s approval.

 

(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note representing the outstanding Principal.

 

(5)
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof
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 (provided confirmation of transmission is mechanically or electronically generated and kept on file by
the sending party) (iii) upon receipt, when sent by email; or (iv) one (1) 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 and facsimile numbers
for such communications shall be those set forth in the communications and documents that each party has provided the other immediately
preceding the issuance of this Note 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 (i) given by the recipient of such notice, consent, waiver or other communication,
(ii) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service,
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

 

The
addresses for such communications shall be:

 

If
to the Company, to:

 

MGT
Capital Investments, Inc.

512
S. Mangum Street Suite 408

Durham,
NC 27701

Attn:
Robert Ladd

Email:
rladd@mgtci.com

 

If
to the Holder:

 

GEMINI
SPECIAL OPPORTUNITIES FUND, LP

1075
Valleyside Lane

Eninitas,
CA 92024

Attn:
Steven Winters

Email:
Steve@GeminiStrategies.com

 

    	 

    	 

    

 

(6)
APPLICABLE LAW AND VENUE. This Note shall be governed by and construed in accordance with the laws of the State of California,
without giving effect to conflicts of laws thereof. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of California or in the federal courts located in the
city and county of San Diego, in the State of California. Both parties and the individuals signing this Agreement agree to submit
to the jurisdiction of such courts.

 

(7)
WAIVER. Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to
insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be
in writing.

 

IN
WITNESS WHEREOF, the Company has caused this Promissory Note to be duly executed by a duly authorized officer as of the date
set forth above.

 

	 	COMPANY:
	 	 
	 	MGT
    Capital Investments, Inc.
	 	 	 
	 	By:	/s/ Robert
    Ladd
	 	Name:	Robert
    Ladd
	 	Title:	President
    and Chief Executive Officer

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