Document:

SRZ Comments: 10/21/2012

 

	 	WARRANT	 
	 	 	 
	NO. ___	MGT CAPITAL INVESTMENTS INC.	________ Shares

 

WARRANT TO PURCHASE COMMON STOCK

 

VOID AFTER 5:30 P.M., EASTERN 

TIME, ON THE EXPIRATION DATE

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
OR OTHERWISE TRANSFERRED (I) IN THE ABSENCE OF (A) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE
ACT OR (B) AN OPINION OF COUNSEL THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE WITH RESPECT TO SUCH
TRANSFER OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES EVIDENCED
BY THIS CERTIFICATE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

FOR VALUE RECEIVED, MGT
CAPITAL INVESTMENTS INC., a Delaware corporation (the “Company”), hereby agrees to sell upon the terms and on
the conditions hereinafter set forth, at any time or times on or after the issuance date but no later than 5:30 p.m., Eastern Time,
on the Expiration Date (as hereinafter defined) to ________________ or registered assigns (the “Holder”),
under the terms as hereinafter set forth, __________________ (_____________) fully paid and non-assessable shares of the
Company’s Common Stock, par value $0.001 per share (the “Warrant Stock”), at a purchase price of $3.85
per share (the “Warrant Price”), pursuant to this warrant (this “Warrant”). The number of
shares of Warrant Stock to be so issued and the Warrant Price are subject to adjustment in certain events as hereinafter set forth.
The term “Common Stock” shall mean, when used herein, unless the context otherwise requires, the stock and other
securities and property at the time receivable upon the exercise of this Warrant. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Subscription Agreement (the “Subscription Agreement”), dated
as of the date hereof, entered into by the Company, the Holder and the other signatories thereto.

 

    	 

    	 

    

 

1.           Exercise
of Warrant.

 

a.           The
Holder may exercise this Warrant according to its terms by delivering the Notice of Exercise attached hereto having then been duly
executed by the Holder for the number of shares of the Warrant Stock specified in the Notice of Exercise, or as otherwise provided
in this Warrant, prior to 5:30 p.m., Eastern Time, on October [ ], 2017 (the “Expiration Date”).
The Holder shall not be required to surrender this Warrant in order to effect an exercise hereunder, unless the Holder has purchased
all of the Warrant Stock available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company at the address set forth in Section 11 for cancellation as soon as
practicable after the date the final Notice of Exercise is delivered to the Company. Execution and delivery of the Notice
of Exercise with respect to less than all of the Warrant Stock shall have the same effect as cancellation of the original Warrant
and issuance of a new Warrant evidencing the right to purchase the remaining number of shares of Warrant Stock.

 

b.           On
or before the first (1st) trading day following the date on which the Company has received the Notice of Exercise, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Notice of Exercise to the Holder and the
Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd) trading day following the
date on which the Company has received the Notice of Exercise, so long as the Holder delivers to the Company an amount equal to
the applicable Warrant Price multiplied by the number of shares of Warrant Stock as to which this Warrant is being exercised (the
“Aggregate Exercise Price”) in cash or by wire transfer of immediately available funds (or notice of a Cashless
Exercise) on or prior to the third (3rd) trading day following the date on which the Company has received the Notice of Exercise
(the “Warrant Stock Delivery Date”) (provided that if the Aggregate Exercise Price has not been delivered by
such date, the Warrant Stock Delivery Date shall be two (2) trading days after the Aggregate Exercise Price is delivered), the
Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Warrant Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Notice of Exercise, a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise.

 

c.           Cashless
Exercise. If at any time after the Effectiveness Date (as defined in the Registration Rights Agreement), there is no effective
Registration Statement registering, or no current prospectus available for, the resale of the Warrant Stock by the Holder, then
this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of shares of Warrant Stock equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

 

(A) = the VWAP on the Trading Day
immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as
set forth in the applicable Notice of Exercise;

 

(B) = the Exercise Price of this
Warrant, as adjusted hereunder; and

 

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(X) =
the number of shares of Warrant Stock that would be issuable upon exercise of this Warrant in accordance with the terms of this
Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.         

 

For purposes of this
Warrant, “VWAP” means, for any date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market (as defined below), the daily volume weighted average price
of the Common Stock for the ten (10) trading days prior to such date (or the nearest preceding date) on the Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time
to 4:02 p.m. New York City time); (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for the ten (10) trading days prior to such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if
the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in
the “Pink Sheets” published by OTC Markets Group (or a similar organization or agency succeeding to its functions of
reporting prices), the average bid price per share of the Common Stock so reported for the twenty (20) trading days prior to such
date; or (d) in all other cases, the fair market value of a share of Common Stock as determined in good faith by the Company’s
board of directors. For purposes of this Warrant, “Trading Market” means the following markets or exchanges
on which the Common Stock is listed or quoted for trading on the date in question: NYSE MKT, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

  

This Warrant
may be exercised in whole or in part so long as any exercise in part hereof would not involve the issuance of fractional shares
of Warrant Stock. If exercised in part and this Warrant is submitted in connection with any such exercise, the Company shall as
soon as practicable and in no event later than three (3) trading days after any such exercise at its own expense deliver to the
Holder a new Warrant, identical in form, in the name of the Holder, evidencing the right to purchase the number of shares of Warrant
Stock as to which this Warrant has not been exercised, which new Warrant shall be signed by the Chairman, Chief Executive Officer
or President and the Secretary or Assistant Secretary of the Company. The term Warrant as used herein shall include any subsequent
Warrant issued as provided herein.

 

d.           No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. The Company shall
pay cash in lieu of fractions with respect to the Warrants based upon the fair market value of such fractional shares of Common
Stock (which shall be the closing price of such shares on the exchange or market on which the Common Stock is then traded) at the
time of exercise of this Warrant.

 

e.           In
the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder on or prior to the Warrant Stock Delivery Date. The person
or entity in whose name any certificate for the Warrant Stock is issued upon exercise of the rights represented by this Warrant
shall for all purposes be deemed to have become the holder of record of such shares immediately prior to the close of business
on the date on which the Warrant was surrendered and payment of the Warrant Price and any applicable taxes was made, irrespective
of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become the holder of such shares at the opening of business
on the next succeeding date on which the stock transfer books are open. The Company shall pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on exercise of this Warrant.

 

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f.            In
addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder
a certificate or the certificates representing the Warrant Stock pursuant to an exercise on or prior to the Warrant Stock Delivery
Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Stock which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall
(A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of shares of
Warrant Stock that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price
at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of shares of Warrant Stock for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

2.            Disposition
of Warrant Stock and Warrant.

 

a.           The
Holder hereby acknowledges that it is acquiring the Warrant and the Warrant Stock (other than if exercised pursuant to a “Cashless
Exercise”) for investment for its own account, with no present intention of dividing its participation with others or reselling
or otherwise distributing the same; provided, however, that by making the representations herein, the Holder does
not agree to hold any of the Warrant or the Warrant Stock for any minimum or other specific term and reserves the right to dispose
of the Warrant and/or the Warrant Stock at any time in accordance with or pursuant to a registration statement or an exemption
under the Securities Act of 1933, as amended (the “Securities Act”). Notwithstanding the foregoing, the Company
acknowledges that the Holder may dispose of the Warrant Stock at any time in accordance with or pursuant to an effective registration
statement registering the Warrant Stock for resale or pursuant to a valid exemption under the Securities Act.

 

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b.           If,
at the time of issuance of the shares issuable upon exercise of this Warrant, no registration statement is in effect with respect
to such shares under applicable provisions of the Securities Act, any stock certificate delivered to the Holder of a surrendered
Warrant shall bear legends reading substantially as follows:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED (I) IN THE ABSENCE OF (A) A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE ACT OR (B) AN OPINION OF COUNSEL THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT IS AVAILABLE WITH RESPECT TO SUCH TRANSFER OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.”

 

In addition, so long as the foregoing legend
may remain on any stock certificate delivered to the Holder, the Company may maintain appropriate “stop transfer” orders
with respect to such certificates and the shares represented thereby on its books and records and with those to whom it may delegate
registrar and transfer functions.

 

3.          Reservation
of Shares. The Company hereby agrees that at all times there shall be reserved for issuance upon the exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant. The Company further
agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant will be duly authorized
and will, upon issuance and against payment of the exercise price, be validly issued, fully paid and non-assessable, free from
all taxes, liens, charges and preemptive rights with respect to the issuance thereof, other than taxes, if any, in respect of any
transfer occurring contemporaneously with such issuance and other than transfer restrictions imposed by federal and state securities
laws.

 

4.          Exchange,
Transfer or Assignment of Warrant. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations,
entitling the Holder or Holders thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder.
Upon surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant
may be divided or combined with other Warrants that carry the same rights upon presentation hereof at the office of the Company
or at the office of its stock transfer agent, if any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof.

 

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5.          Capital
Adjustments. This Warrant is subject to the following further provisions:

 

a.           Intentionally
Omitted.

 

b.           Subdivision
or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the number of shares of Warrant Stock purchasable upon exercise of this Warrant and the Warrant Price
shall be proportionately adjusted.

 

c.           Stock
Dividends and Distributions. If the Company at any time while this Warrant is outstanding and unexpired shall issue or pay
the holders of its Common Stock, or take a record of the holders of its Common Stock for the purpose of entitling them to receive,
a dividend payable in, or other distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in accordance with
Section 5(f) and (ii) the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock that the Holder would have owned immediately following such action had this Warrant been exercised
immediately prior thereto.

 

d.           Distributions;
Purchase Rights. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to all of the holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
date of issuance of this Warrant , then in each such case, the Company shall reserve shares or other units of such Securities for
distribution to the Holder upon exercise of this Warrant so that, in addition to the shares of the Common Stock to which such Holder
is entitled, such Holder will receive upon such exercise the amount and kind of such Distribution which such Holder would have
received if the Holder had, immediately prior to the record date for the Distribution, exercised this Warrant in full (without
regard to any limitations on exercise hereof, including without limitation, the limitations set forth in Section 6 hereof) (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the Holder’s ownership limitations as set forth in Section 6 herein, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the maximum limitations of the Holder’s ownership, as
set forth in Section 6 herein, at which time the Holder shall be granted such right to the same extent as if there had been no
such limitation). If at any time the Company grants, issues or sells any options, convertible securities or rights to purchase
stock, warrants, securities or other property pro rata to all of the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without taking into account any limitations or restrictions on the exercise of this Warrant)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Holder’s ownership limitations as set forth in Section 6 herein,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Purchase Right to such extent) and the portion of such Purchase Right shall be held
in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the maximum limitations of the Holder’s ownership, as set forth in Section 6 herein, at which time the Holder shall be granted
such right to the same extent as if there had been no such limitation).

 

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e.           Fundamental
Transaction. If, at any time while this Warrant is outstanding, the Company completes a Fundamental Transaction then, upon
any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each share of Warrant Stock that would
have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the
Holder (without regard to any limitation in Section 6 on the exercise of this Warrant), the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (subject to the
limitations on exercise set forth in Section 6 of this Warrant). For purposes of any such exercise, the determination of the Exercise
Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the
Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from
the Holder by paying to the Holder, within 5 business days, an amount of cash equal to the Black Scholes Value of the remaining
unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction. “Black Scholes Value”
means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction
for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an
expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the
Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per
share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date. The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance
with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder
of this Warrant, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and
with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. For purposes hereof, (i) “Fundamental
Transaction” means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person or Persons, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its Subsidiaries
to another Person, or (iii) allow another Person 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 the Company (not including any shares of Voting Stock of the Company
held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase,
tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more
than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock purchase agreement or other business combination, or any Person who is a holder of the Company’s securities on
the date hereof or who is a Holder), or (v) reorganize, recapitalize or reclassify its Common Stock or (B) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) is or shall become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of either (x) 50% of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock (other than any Person who is a holder of the Company’s securities on the date hereof
or who is a Holder) or (y) 50% or more of the shares of Voting Stock of the Company not held by such Person or Persons as of the
date hereof (other than any Person who is a holder of the Company’s securities on the date hereof or who is a Holder), (ii)
“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the
holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors,
managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency), (iii) “Person” means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof and (iv) “Subsidiary” means any entity in which
the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest.

 

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f.            Warrant
Price Adjustment. Except as otherwise provided herein, whenever the number of shares of Warrant Stock purchasable upon exercise
of this Warrant is adjusted, as herein provided, the Warrant Price payable upon the exercise of this Warrant shall be adjusted
to that price determined by multiplying the Warrant Price immediately prior to such adjustment by a fraction (i) the numerator
of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately prior to such adjustment,
and (ii) the denominator of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately
thereafter.

 

g.           Certain
Shares Excluded. The number of shares of Common Stock outstanding at any given time for purposes of the adjustments set forth
in this Section 5 shall exclude any shares then directly or indirectly held in the treasury of the Company.

 

h.           Deferral
and Cumulation of De Minimis Adjustments. The Company shall not be required to make any adjustment pursuant to this Section
5 if the amount of such adjustment would be less than one percent (1%) of the Warrant Price in effect immediately before the event
that would otherwise have given rise to such adjustment. In such case, however, any adjustment that would otherwise have been required
to be made shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or
adjustments so carried forward, shall amount to not less than one (1%) percent of the Warrant Price in effect immediately before
the event giving rise to such next subsequent adjustment.

 

i.            Duration
of Adjustment. Following each computation or readjustment as provided in this Section 5, the new adjusted Warrant Price and
number of shares of Warrant Stock purchasable upon exercise of this Warrant shall remain in effect until a further computation
or readjustment thereof is required.

 

    	-8-

    	 

    

 

 

6.            Limitation
on Exercises.

 

a.           Notwithstanding
anything to the contrary set forth in this Warrant, at no time may all or a portion of the Warrant be exercised if the number of
shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common
Stock owned by the Holder at such time, the number of shares of Common Stock which would result in the Holder beneficially owning
(as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the Common
Stock outstanding at such time (the “4.99% Beneficial Ownership Limitation”); provided, however,
that upon the Holder providing the Company with sixty-one (61) days’ advance notice (the “4.99% Waiver Notice”)
that the Holder would like to waive this Section 6 (i) with regard to any or all shares of Common Stock issuable upon exercise
of this Warrant, this Section 6 (i) will be of no force or effect with regard to all or a portion of this Warrant referenced in
the 4.99% Waiver Notice.

 

b.           Notwithstanding
anything to the contrary set forth in this Warrant, at no time may all or a portion of this Warrant be exercised if the number
of shares of Common Stock to be issued pursuant to such exercise, when aggregated with all other shares of Common Stock owned by
the Holder at such time, would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock outstanding
at such time (the “9.99% Beneficial Ownership Limitation” and the lower of the 9.99% Beneficial Ownership Limitation
and the 4.99% Beneficial Ownership Limitation then in effect, the “Maximum Percentage”)).

 

c.           By
written notice to the Company, the Holder may from time to time decrease the Maximum Percentage to any other percentage specified
in such notice.

 

d.           For
purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on
Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company setting forth the number of shares of Common Stock outstanding. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) business day confirm orally and in
writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant,
by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported, which
in any event are convertible or exercisable, as the case may be, into shares of the Company’s Common Stock within 60 days’
of such calculation and which are not subject to a limitation on conversion or exercise analogous to the limitation contained herein.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 6 to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.

 

e.           The
provisions of this Section 6 shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 6 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial
ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation.

 

    	-9-

    	 

    

 

 

7.            Notice
to Holders.

 

a.           Notice
of Record Date. In case:

 

(i)          the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise
of this Warrant) for the purpose of entitling them to receive any dividend (other than a cash dividend payable out of earned surplus
of the Company) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right;

 

(ii)         of
any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation with or
merger of the Company into another corporation, or any conveyance of all or substantially all of the assets of the Company to another
corporation; or

 

(iii)        of
any voluntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company
will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any, is to be fixed, as of which the holders
of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution or winding-up. Such notice shall be
mailed at least thirty (30) days prior to the record date therein specified, or if no record date shall have been specified therein,
at least thirty (30) days prior to such specified date, provided, however, failure to provide any such notice shall not affect
the validity of such transaction.

 

b.           Certificate
of Adjustment. Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman, Chief Executive Officer, President, Vice President, Chief Financial Officer or Treasurer, setting forth
in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was
calculated and the Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant after giving
effect to such adjustment, and shall promptly cause copies of such certificates to be mailed (by first class mail, postage prepaid)
to the Holder of this Warrant.

 

8.            Loss,
Theft, Destruction or Mutilation. Upon receipt by the Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to the Company and, in the case of mutilation, upon surrender and cancellation
thereof, the Company will execute and deliver in lieu thereof, without expense to the Holder, a new Warrant of like tenor dated
the date hereof.

 

    	-10-

    	 

    

 

 

9.          Warrant
Holder Not a Stockholder. The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights
whatsoever as a stockholder of the Company.

 

10.         Notices.
Any notice required or contemplated by this Warrant shall be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, or nationally recognized overnight delivery service, to the Company at its principal executive
offices located at 500 Mamaroneck Avenue, Suite 204, Harrison, NY, 10528 Attn: Chief Executive Officer,
or to the Holder at the name and address set forth in the Warrant Register maintained by the Company.

 

11.         Choice
of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

 

12.         Jurisdiction
and Venue. The Company and Holder hereby agree that any dispute which may arise between them arising out of or in connection
with this Warrant shall be adjudicated before a court located in New York County, New York and they hereby submit to the exclusive
jurisdiction of the federal and state courts of the State of York located in New York County with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any
such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to
or arising out of this Warrant or any acts or omissions relating to the sale of the securities hereunder, and consent to the service
of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in care of
the address set forth herein or such other address as either party shall furnish in writing to the other.

 

13.         Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent signed by both (a) the Company
and (b) holders of Warrants representing sixty percent (60%) of the Warrant Stock then outstanding and not exercised.

 

    	-11-

    	 

    

 

IN WITNESS WHEREOF, the
Company has duly caused this Warrant to be signed on its behalf, in its corporate name and by its duly authorized officers, as
of this __ day of October __, 2012.

 

	 	MGT CAPITAL INVESTMENTS INC.
	 	 
	 	By:	 
	 	 	Name:  Robert B. Ladd
	 	 	Title:  President and Chief Executive Officer

 

    	-12-

    	 

    

 

NOTICE OF EXERCISE

 

	TO:	MGT Capital Investments, Inc.
	 	500 Mamaroneck Avenue, Suite 204
	 	Harrison, NY 10528
	 	Attn: President
	 	Tel: (___) ___-____
	 	Fax: (___) ___-____

 

(1)         The
undersigned hereby elects to purchase ______________ shares of Warrant Stock of the Company pursuant to the terms of the attached
Warrant to Purchase Common Stock, and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)         Payment
shall take the form of (check applicable box):

 

 ̈         in
lawful money of the United States; or

 

 ̈         if
permitted, the cancellation of __________ shares of Warrant Stock in order to exercise this Warrant with respect to ____________
shares of Warrant Stock (using a VWAP of $______ for this calculation), in accordance with the formula and procedure set forth
in subsection 1(c).

 

 ̈         if
permitted, the cancellation of such number of shares of Warrant Stock as is necessary, in accordance with the formula and procedure
set forth in subsection 1(c), to exercise this Warrant with respect to the maximum number of shares of Warrant Stock purchasable
pursuant to a cashless exercise.

 

(3)         Please
issue a certificate or certificates representing said shares of Warrant Stock in the name of the undersigned or in such other name
as is specified below:

 

 

 

The shares of Warrant
Stock shall be delivered to the following DWAC Account Number, if permitted, or by physical delivery of a certificate to:

 

 

 

 

 

 

 

 

 

    	-13-

    	 

    

 

(4)         Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.1

 

 

1 Only applies if the undersigned is effecting a
cash exercise.

 

    	-14-

    	 

    

 

[SIGNATURE OF HOLDER]

 

	Name of Investing Entity: 	 

 

	Signature of Authorized Signatory of Investing Entity:	 

 

	Name and Title of Authorized Signatory:	 

 

	Date:	 

 

    	-15-

    	 

    

 

ASSIGNMENT FORM 

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED,
all of or ________  shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	 	whose address is
	 
	 	 
	 
	 	 

 

Dated:                    ,
          

 

	Holder’s Name:	 

 

	Holder’s Signature:	 

 

	Name and Title of Signatory:	 

 

	Holder’s Address:  	 

 

NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever.

 

    	-16-SRZ Comments: 10/21/2012

 

REGISTRATION RIGHTS AGREEMENT

 

 

THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is made as of October 22, 2012, among MGT Capital Investments, Inc., a Delaware
corporation (the “Company”), and each signatory hereto (each, an “Investor” and collectively,
the “Investors”).

 

RECITALS

 

WHEREAS, the Company
and the Investors are parties to Subscription Agreements (the “Subscription Agreements”), dated as of the date
hereof, as such may be amended and supplemented from time to time;

 

WHEREAS, the Investors’
obligations under the Subscription Agreements are conditioned upon certain registration rights under the Securities Act of 1933,
as amended (the “Securities Act”); and

 

WHEREAS, the Investors
and the Company desire to provide for the rights of registration under the Securities Act as are provided herein upon the execution
and delivery of this Agreement by such Investors and the Company.

 

NOW, THEREFORE, in
consideration of the promises, covenants and conditions set forth herein, the parties hereto hereby agree as follows:

 

1.          Registration
Rights.

 

1.1           Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Subscription
Agreements. As used in this Agreement, the following terms shall have the meanings set forth below:

 

(a)          “Commission”
means the United States Securities and Exchange Commission.

 

(b)          “Common
Stock” means the Company’s common stock, par value $0.001 per share.

 

(c)          “Effectiveness
Date” means the date that is ninety (90) days after the earlier to occur of (I) the Filing Date and (II) the date the
company files the registration statement pursuant to Section 1.2(a) hereof with the Commission.

 

(d)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(e)          “Filing
Date” means the date that is thirty (30) days after the Closing Date (as defined in the Subscription Agreements).

 

(f)          “Investor”
means any person owning Registrable Securities who becomes party to this Agreement by executing a counterpart signature page hereto,
or other agreement in writing to be bound by the terms hereof, which is accepted by the Company.

 

    	 

    	 

    

 

(g)          The
terms “register,” “registered” and “registration” refer to a registration
effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration
or ordering of effectiveness of such registration statement or document.

 

(h)          “Registrable
Securities” means any of the Shares or any securities issued or issuable as (or any securities issued or issuable upon
the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, the Shares; provided, however, that Registrable Securities shall not
include any securities of the Company that have previously been registered and remain subject to a currently effective registration
statement or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold
in a private transaction in which the transferor’s rights are not assigned, or which may be sold immediately without registration
under the Securities Act and without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1).

 

(i)          “Rule
144” means Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the Commission.

 

(j)          “Rule
415” means Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the Commission.

 

(k)          “Shares”
means the shares of Common Stock (i) issuable upon conversion of the Company’s Series A Convertible Preferred Stock, par
value $0.001 per share, and (iii) issuable upon exercise of the Warrants.

 

(l)          “Warrants”
means the warrants to purchase Common Stock issued pursuant to the Subscription Agreements.

 

1.2           
Company Registration.

 

(a)          On
or prior to the Filing Date, the Company shall prepare and file with the Commission a registration statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule 415. The registration statement shall be on Form S-1
or, if the Company is so eligible, on Form S-3 (except if the Company is not then eligible to register for resale the Registrable
Securities on Form S-1 or Form S-3, as the case may be, in which case such registration shall be on another appropriate form in
accordance herewith) and shall contain (unless otherwise directed by Investors holding an aggregate of at least 75% of the Registrable
Securities on a fully diluted basis) substantially the “Plan of Distribution” attached hereto as Annex A.
The Company shall cause the registration statement to become effective and remain effective as provided herein. The Company shall
use its reasonable best efforts to cause the registration statement to be declared effective under the Securities Act as soon as
possible and, in any event, by the Effectiveness Date. The Company shall use its reasonable best efforts to keep the registration
statement continuously effective under the Securities Act until all Registrable Securities covered by such registration statement
have been sold, or may be sold without the requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144 (the “Effectiveness Period”).

 

    	 

    	 

    

 

(b)          In
the event the Commission requires the Company to cut back the number of Registrable Securities included in the registration statement
filed pursuant to Section 1.2(a) pursuant to Rule 415, the Company shall prepare, and, as soon as practicable but in no event later
than the later of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered under
the immediately preceding registration statement are sold and (ii) the date six (6) months from the immediately preceding registration
statement is declared effective by the Commission, file with the Commission an additional registration statement on Form S-1 or,
if the Company is so eligible, on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities
on Form S-1 or Form S-3, as the case may be, in which case such registration shall be on another appropriate form in accordance
herewith) covering the resale of all of the Registrable Securities not previously registered on a registration statement hereunder
and shall contain (unless otherwise directed by Investors holding an aggregate of at least 75% of the Registrable Securities on
a fully diluted basis) substantially the “Plan of Distribution” attached hereto as Annex A. To the extent
the Commission does not permit the Registrable Securities not previously registered on a registration statement hereunder to be
registered on an additional registration statement, the Company shall file additional registration statements successively trying
to register on each such additional registration statement the maximum number of remaining Registrable Securities until all Registrable
Securities have been registered with the Commission. The Company shall cause such additional registration statement(s) to become
effective and remain effective as provided herein. The Company shall use its reasonable best efforts to cause such additional registration
statement(s) to be declared effective under the Securities Act as soon as possible and, in any event, by the ninetieth (90th) day
after the earlier to occur of (I) the date such additional registration statement has been declared effective by the Commission
and (II) the date such additional registration statement is required to be filed pursuant to this Section 1.2(b). The Company shall
use its reasonable best efforts to keep such additional registration statement(s) continuously effective under the Securities Act
during the Effectiveness Period. Any reference in this Registration Rights Agreement to a “registration statement”
shall refer to any registration statement filed pursuant to Section 1.2(a) or this Section 1.2(b).

 

(c)          The
Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a registration
statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such
an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify
each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt
of actual notice of the initiation or threat of any proceeding for such purpose.

 

    	 

    	 

    

 

(d)          The
Company shall pay to Investors a fee of 1% per month of the Investors’ investment, payable in cash, for every thirty (30)
day period (pro rated for periods totaling less than thirty (30) days) up to a maximum of 6%, (i) following the Filing Date that
the registration statement has not been filed, (ii) following the Effectiveness Date that the registration statement has not been
declared effective and (iii) on any day after the date the applicable registration statement has been declared effective by the
Commission, sales of all of the Registrable Securities required to be included on such registration statement cannot be made (other
than during an Allowable Grace Period (as defined in Section 1.2(e)) pursuant to such registration statement or otherwise (including,
without limitation, because of the suspension of trading or any other limitation imposed by a Trading Market (as defined in the
Warrants), a failure to keep such registration statement effective, a failure to disclose such information as is necessary for
sales to be made pursuant to such registration statement, a failure to register a sufficient number of shares of Common Stock or
a failure to maintain the listing of the Common Stock); provided, however, that the Company shall not be obligated
to pay any such liquidated damages if (i) the Registrable Securities that would other be covered by the registration statement
have been sold or may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) or (ii) the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions
or releases issued or actions taken by the Commission requiring the Company to cut back the number of securities to be included
in a registration statement pursuant to its authority with respect to “Rule 415”, and the Company registers at such
time the maximum number of shares of Common Stock permissible upon consultation with the staff of the Commission and, in the event
that the number of Registrable Securities is reduced on accordance with staff objection, unless an Investor gives written notice
to the Company to the contrary, priority shall be given to the registration of the maximum number of shares of Common Stock issuable
upon conversion of the Preferred Shares (as defined in the Subscription Agreements) and thereafter, upon conversion of the Warrants
(as defined in the Subscription Agreements), on a pro-rata basis in accordance with the registration of Registrable Securities
held by each Investor. The payments to which a holder shall be entitled pursuant to this Section 1.2(d) are referred to herein
as “Registration Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I) the dates
set forth above and (II) the third business day after the event or failure giving rise to the Registration Delay Payments is cured.
In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear
interest at the rate of 1 % per month (prorated for partial months) until paid in full.

 

(e)          Notwithstanding
anything to the contrary herein, at any time after the date the applicable registration statement has been declared effective by
the Commission, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure
of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest
of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided,
that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving
rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information
to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which
the Grace Period ends; and, provided further, that no Grace Period shall exceed twenty (20) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of forty-five (45) days and the first day
of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each, an “Allowable
Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 1.2(c) hereof
shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall
again be bound by the first sentence of Section 1.3(f) with respect to the information giving rise thereto unless such material,
non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract
for sale, prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.

 

    	 

    	 

    

 

(f)          If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a registration statement, the Company shall file as soon as reasonably practicable an additional registration
statement covering the resale of not less than the number of such Registrable Securities.

 

(g)          The
Company shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Registrable Securities
with respect to the registrations pursuant to this Section 1.2 for each Investor, including (without limitation) all registration,
filing and qualification fees, printer’s fees, accounting fees and fees and disbursements of counsel for the Company, but
excluding any brokerage or underwriting fees, discounts and commissions relating to Registrable Securities and fees and disbursements
of counsel for the Investors.

 

1.3           Obligations
of the Company. Whenever required under Section 1.2 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:

 

(a)          Prepare
and file with the Commission a registration statement with respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to become effective and to keep such registration statement effective during the Effectiveness
Period;

 

(b)          Prepare
and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement, and shall file promptly following effectiveness the form of prospectus
included in the Registration Statement pursuant to Rule 424 of the Securities Act;

 

(c)          Furnish
to the Investors such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements
of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them (provided that the Company would not be required to print such prospectuses if readily available to Investors
from any electronic service, such as on the EDGAR filing database maintained at www.sec.gov);

 

    	 

    	 

    

 

(d)          Use
its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities’
or blue sky laws of such jurisdictions as shall be reasonably requested by the Investors; provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions;

 

(e)          In
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering (each Investor participating in such underwriting shall also
enter into and perform its obligations under such an agreement);

 

(f)          Promptly
notify each Investor holding Registrable Securities covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, within one business day, (i) of the effectiveness of such registration
statement, or (ii) of the happening of any event as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the circumstances then existing;

 

(g)          Cause
all such Registrable Securities registered pursuant hereto to be listed on each securities exchange or nationally recognized quotation
system on which similar securities issued by the Company are then listed; and

 

(h)          Provide
a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.

 

(i)          Neither
the Company nor any Subsidiary (as defined in the Subscription Agreements)
or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the Commission
or any Trading Market and any Investor being deemed an underwriter by the Commission shall not relieve the Company of any obligations
it has under this Agreement or any other Transaction Document (as defined in the Subscription Agreements);
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan
of Distribution” section attached hereto as Exhibit A in the registration statement.

 

1.4           Furnish
Information. Each Investor shall furnish to the Company such information regarding such Investor, the Registrable Securities
held by such Investor, and the intended method of disposition of such securities in the form attached to this Agreement as Annex
B, or as otherwise reasonably required by the Company or the managing underwriters, if any, to effect the registration of such
Investor’s Registrable Securities, and if not so furnished to the Company, the Company shall have the right to rely on the
most recent information available to the Company regarding the Investor and the Registrable Securities, which shall not affect
the obligations of the Company to register such Registrable Securities.

 

    	 

    	 

    

 

 

1.5           Intentionally
omitted.

 

1.6           Indemnification.

 

(a)          To
the extent permitted by law, the Company will indemnify and hold harmless each Investor, any underwriter (as defined in the Securities
Act) for such Investor and each person, if any, who controls such Investor or underwriter within the meaning of the Securities
Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons
may become subject under the Securities Act, the Exchange Act or other federal or state securities law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a “Violation”): (i) any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto (collectively, the “Filings”), (ii) the omission or alleged omission
to state in the Filings a material fact required to be stated therein, or necessary to make the statements therein not misleading,
or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will
pay any legal or other expenses reasonably incurred by any person to be indemnified pursuant to this Section 1.6(a) in connection
with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 1.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Investor, underwriter or controlling person.

 

(b)          To
the extent permitted by law, each Investor will indemnify and hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act
or the Exchange Act, any underwriter, any other Investor selling securities in such registration statement and any controlling
person of any such underwriter or other Investor, against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject under the Securities Act, the Exchange Act or other federal or state securities
law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Investor expressly for use in connection with such registration; and each such Investor will
pay any legal or other expenses reasonably incurred by any person to be indemnified pursuant to this Section 1.6(b) in connection
with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 1.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Investor (which consent shall not be unreasonably withheld);
provided, however, in no event shall any indemnity under this subsection 1.6(b) exceed the net proceeds received
by such Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

    	 

    	 

    

 

(c)          Promptly
after receipt by an indemnified party under this Section 1.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section
1.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.6,
but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.6.

 

(d)          If
the indemnification provided for in Sections 1.6(a) and (b) is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, claim, damage or expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party
on the one hand and of the indemnified party on the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such loss, liability, claim or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. In no event shall any Investor be required to contribute an amount in excess of the net proceeds
received by such Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(e)          The
obligations of the Company and Investors under this Section 1.6 shall survive the completion of any offering of Registrable Securities
in a registration statement under Section 1.2, and otherwise.

 

1.7           Reports
Under Securities Exchange Act. With a view to making available the benefits of certain rules and regulations of the Commission,
including Rule 144, that may at any time permit an Investor to sell securities of the Company to the public without registration
or pursuant to a registration on Form S-1 or Form S-3, the Company agrees to:

 

(a)          make
and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Closing Date;

 

    	 

    	 

    

 

(b)          take
such action, including the voluntary registration of its Common Stock under Section 12 of the Exchange Act, as is necessary to
enable the Investors to utilize Form S-1 for the sale of their Registrable Securities, such action to be taken as soon as practicable
after the end of the fiscal year in which the registration statement is declared effective;

 

(c)          file
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the
Exchange Act; and

 

(d)          furnish
to any Investor, so long as the Investor owns any Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant
to Form S-1 or Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in
availing any Investor of any rule or regulation of the Commission that permits the selling of any such securities without registration
or pursuant to such form.

 

1.8           Transfer
or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to Section
1.2 may be transferred or assigned, but only with all related obligations; provided, that in the case of (a), (i) prior
to such transfer or assignment, the Company is furnished with written notice stating the name and address of such transferee or
assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, (ii)
such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement and (iii)
such transfer or assignment shall be effective only if immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the Securities Act.

 

2.          Legend.

 

(a)          Each
certificate representing Shares held by the Investors shall be endorsed with the following legend:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED (I) IN THE ABSENCE OF (A) A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE ACT OR (B) AN OPINION OF COUNSEL THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT IS AVAILABLE WITH RESPECT TO SUCH TRANSFER OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.”

 

    	 

    	 

    

 

(b)          The
legend set forth above shall be removed, and the Company shall issue a certificate without such legend to the transferee of the
Shares represented thereby, if, unless otherwise required by state securities laws, (i) such Shares have been sold under an effective
registration statement under the Securities Act, (ii) in connection with a sale, assignment or other transfer, such holder provides
the Company with an opinion of counsel, reasonably acceptable to the Company, to the effect that such sale, assignment or transfer
is being made pursuant to an exemption from the registration requirements of the Securities Act, or (iii) such holder provides
the Company with reasonable assurance that the Shares are being sold, assigned or transferred pursuant to Rule 144 or Rule 144A
under the Securities Act.

 

3.          Miscellaneous.

 

3.1           Governing
Law. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement
shall be adjudicated only before a federal court located in the State of New York and they hereby submit to the exclusive jurisdiction
of the federal and state courts of the State of New York with respect to any action or legal proceeding commenced by any party,
and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement or
any acts or omissions relating to the registration of the securities hereunder, and consent to the service of process in any such
action or legal proceeding by means of registered or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the other.

 

3.2           WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY

 

3.3           Waivers
and Amendments. This Agreement may be terminated and any term of this Agreement may be amended or waived (either generally
or in a particular instance and either retroactively or prospectively) with the written consent of the Company and Investors holding
at least sixty percent (60%) of the Registrable Securities then outstanding (the “Required Investors”). Notwithstanding
the foregoing, additional parties may be added as Investors under this Agreement, and the definition of Registrable Securities
expanded, with the written consent of the Company and the Required Investors. No such amendment or waiver shall reduce the aforesaid
percentage of the Registrable Securities, the holders of which are required to consent to any termination, amendment or waiver
without the consent of the record holders of all of the Registrable Securities. Any termination, amendment or waiver effected in
accordance with this Section 3.3 shall be binding upon each holder of Registrable Securities then outstanding, each future holder
of all such Registrable Securities and the Company.

 

3.4           Successors
and Assigns. Except as otherwise expressly provided herein, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

    	 

    	 

    

 

3.5           Entire
Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the
subject matter hereof, 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.

 

3.6           Notices.
All notices and other communications required or permitted under this Agreement shall be in writing and shall be delivered personally
by hand or by overnight courier, mailed by United States first-class mail, postage prepaid, sent by facsimile or sent by electronic
mail directed (a) if to an Investor, at such Investor’s address, facsimile number or electronic mail address set forth in
the Company’s records, or at such other address, facsimile number or electronic mail address as such Investor may designate
by ten (10) days’ advance written notice to the other parties hereto or (b) if to the Company, to its address, facsimile
number or electronic mail address set forth on its signature page to this Agreement and directed to the attention of its President,
or at such other address, facsimile number or electronic mail address as the Company may designate by ten (10) days’ advance
written notice to the other parties hereto. All such notices and other communications shall be effective or deemed given upon delivery,
on the date that is three (3) days following the date of mailing, upon confirmation of facsimile transfer or upon confirmation
of electronic mail delivery.

 

3.7           Interpretation.
The words “include,” “includes” and “including” when used herein shall be deemed in each case
to be followed by the words “without limitation.” The titles and subtitles used in this Agreement are used for convenience
only and are not considered in construing or interpreting this Agreement.

 

3.8           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.

 

3.9           Independent
Nature of Investors’ Obligations and Rights. The obligations of each Investor hereunder are several and not joint with
the obligations of any other Investor hereunder, and no Investor shall be responsible in any way for the performance of the obligations
of any other Investor hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no
action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert with respect
to such obligations or the transactions contemplated by this Agreement. Each Investor shall be entitled to protect and enforce
its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.

 

3.10         Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument.

 

3.11         Telecopy
Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties
hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery
shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree
to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized officer, as of the date, month and year first set forth
above.

 

	 	“Company”
	 	 
	 	MGT CAPITAL INVESTMENTS INC.
	 	 
	 	By:	 
	 	Name: Robert B. Ladd
	 	Title: President and Chief Executive Officer
	 	 
	 	Address for notice:
	 	500 Mamaroneck Avenue, Suite 204
	 	Harrison, NY 10528

 

[COMPANY SIGNATURE PAGE TO REGISTRATION
RIGHTS AGREEMENT]

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF,
the undersigned Investor has executed this Agreement as of the date, month and year that such Investor became the owner of Registrable
Securities.

 

	 	“Investor”
	 	 
	 	 
	 	By:	 
	 	Name
	 	Title:
	 	 
	 	Address:
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

 

	 	Telephone:	 

 

	 	Facsimile:	 

 

	 	Email:	 

 

[INVESTOR COUNTERPART SIGNATURE PAGE
TO 

REGISTRATION RIGHTS AGREEMENT]

 

    	 

    	 

    

 

Annex A

Plan of Distribution

 

Each selling stockholder
of the common stock and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the NYSE MKT or any other stock exchange, market or trading facility on which the shares are traded
or in private transactions. These sales may be at fixed or negotiated prices. A selling stockholder may use any one or more of
the following methods when selling shares:

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	settlement of short sales;

 

		·	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per
share;

 

		·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

		·	a combination of any such methods of sale; or

 

		·	any other method permitted pursuant to applicable law.

 

The selling stockholders
may also sell shares under Rule 144 under the Securities Act of 1933, as amended, if available, rather than under this prospectus.

 

Broker-dealers engaged
by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.

 

    	 

    	 

    

 

In connection with
the sale of the common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of the common stock short and deliver these securities to close out
their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus
(as supplemented or amended to reflect such transaction).

 

The selling stockholders
and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within
the meaning of the Securities Act of 1933, as amended, in connection with such sales. In such event, any commissions received by
such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933, as amended. Each selling stockholder has informed us that it does not have any written
or oral agreement or understanding, directly or indirectly, with any person to distribute the common stock. In no event shall any
broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).

 

We are required to
pay certain fees and expenses incurred by us incident to the registration of the shares. We have agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act of 1933, as
amended.

 

Because selling stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended, they will be subject
to the prospectus delivery requirements of the Securities Act of 1933, as amended, including Rule 172 thereunder. In addition,
any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act of 1933, as amended
may be sold under Rule 144 rather than under this prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the selling stockholders.

 

We agreed to keep this
prospectus effective until the earlier of (i) the date on which the shares may be resold by the selling stockholders without registration
and without the requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to
Rule 144 or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other
rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and
is complied with.

 

Under applicable rules
and regulations under the Securities Exchange Act of 1934, as amended, any person engaged in the distribution of the resale shares
may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period,
as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling stockholders will be subject
to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the selling stockholders or any
other person. We will make copies of this prospectus available to the selling stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172
under the Securities Act of 1933, as amended).

 

    	 

    	 

    

 

Annex B

MGT CAPITAL INVESTMENTS INC.

 

Selling Securityholder Notice and Questionnaire

 

The undersigned beneficial owner of common
stock (the “Registrable Securities”) of MGT Capital Investments, Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

Certain legal consequences arise from being
named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial
owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named
or not being named as a selling securityholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration
Statement.

 

The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1.          Name.

 

(a)          Full
Legal Name of Selling Securityholder

 

	 

 

(b)          Full
Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

 

	 

 

(c)          Full
Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to
vote or dispose of the securities covered by this Questionnaire):

 

    	 

    	 

    

 

2.          Address
for Notices to Selling Securityholder:

	 
	 
	 

 

	Telephone:
	Fax:
	Contact Person:

 

3.          Broker-Dealer
Status:

 

(a)          Are
you a broker-dealer?

 

Yes                  No

 

(b)          If
“yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services
to the Company?

 

Yes                  
No

 

Note:    If “no”
to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.

 

(c)          Are
you an affiliate of a broker-dealer?

 

Yes                  No

 

(d)          If
you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of
business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings,
directly or indirectly, with any person to distribute the Registrable Securities?

 

Yes                  
No

 

Note:   If “no”
to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.

 

4. Beneficial Ownership of Securities of the Company Owned
by the Selling Securityholder.

 

Except as set forth below in this Item
4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.

 

(a)          Type
and Amount of other securities beneficially owned by the Selling Securityholder:

 

    	 

    	 

    

 

	 

  

5. Relationships with the Company:

 

Except as set forth below, neither the
undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities
of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors
or affiliates) during the past three years.

 

State any exceptions here:

 

	 

 

The undersigned agrees to promptly notify
the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any
time until the date such Registration Statement is declared effective by the Commission to the extent the failure to correct any
such inaccuracy or make any such change in the information provided would cause the Registration Statement to 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 the light of the circumstances under which they were made, not misleading.

 

By signing below, the undersigned consents
to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information
in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands
that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

IN WITNESS WHEREOF the undersigned, by
authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized
agent.

 

Date:

 

	 	Beneficial Owner:
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

[SIGNATURE PAGE FOR SELLING SECURITYHOLDER
NOTICE AND QUESTIONNAIRE]

PLEASE FAX A COPY OF THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

MGT Capital Investments, Inc.

500 Mamaroneck Avenue, Suite 204

Harrison, NY 10528

Attn: President and Chief Executive Officer

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