EXHIBIT
10.2
THIS
WARRANT (AS DEFINED BELOW) IS ISSUED IN EXCHANGE FOR (WITHOUT ANY ADDITIONAL CONSIDERATION) that certain CONVERTIBLE PROMISSORY NOTE
IN THE ORIGINAL PRINCIPAL AMOUNT OF $13,210,000.00 HAVING AN ORIGINAL ISSUANCE DATE OF MARCH 5, 2021. FOR PURPOSES OF RULE 144 OF THE
SECURITIES EXCHANGE ACT OF 1933, AS AMENDED, THIS WARRANT SHALL BE DEEMED TO HAVE BEEN ISSUED ON MARCH 5, 2021.
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, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
MGT
CAPITAL INVESTMENTS, INC.
Warrant
To Purchase Shares of Common Stock
“Original
Issuance Date”: March 5, 2021
MGT
Capital Investments, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Bucktown Capital, LLC, a Utah limited liability company, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Shares of Common
Stock (including any Warrants to Purchase Shares of Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the Exchange Date (as defined below), but not after 11:59 p.m., New York time, on the Expiration Date
(as defined below), 53,500,000 shares of fully paid and non-assessable Common Stock (as defined below), subject to adjustment as provided
herein (the “Warrant Shares”). This Warrant is issued pursuant to that certain Exchange Agreement, dated as of September
30, 2021 (the “Exchange Date”), by and between the Company and Holder (the “Exchange Agreement”),
pursuant to which the Holder exchanged the Prior Note (as defined in the Exchange Agreement) for this Warrant, pursuant to Section 3(a)(9)
of the Securities Act of 1933, as amended. Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings
set forth in Section 16. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth
in the Purchase Agreement (as defined in the Exchange Agreement).
The
Company and the Holder agree that the terms and provisions of the Purchase Agreement and the other Transaction Documents (as defined
in the Purchase Agreement) shall be deemed to apply in all respects to this Warrant. All references in the Purchase Agreement and the
other Transaction Documents to the term “Note” shall be deemed to mean and refer to this Warrant and not the Prior Note.
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Exchange Date in whole or in part, by delivery
(whether via email or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise of this
Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date
of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (in respect of such specific exercise,
the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not
notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)).
The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery
of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant certificate and issuance of a new Warrant certificate evidencing the right to purchase the remaining number of Warrant
Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation
of the original of this Warrant certificate after delivery of the Warrant Shares in accordance with the terms hereof. On or before the
second (2nd) Trading Day following the date on which the Company has received such Exercise Notice, the Company shall (i)
provided that the Company’s transfer agent (the “Transfer Agent”) is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program (which the Company shall cause the Transfer Agent to do at Holder’s
request) and provided the legends would be eligible to be removed from such Common Stock, upon the request of the Holder, credit such
aggregate number of shares of Common 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 (ii) if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program or the legends would not be eligible to be removed from such shares of Common Stock, issue
and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee,
in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice, a certificate, registered
in the Company’s share register in the name of the Holder or its designee (as indicated in the applicable Exercise Notice), for
the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice,
the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date
of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then, at the request of the Holder and upon surrender hereof by the
Holder at the principal office of the Company, the Company shall as soon as practicable and in no event later than three (3) Business
Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section
7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole
number. The Company shall pay any and all taxes and fees which may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.05, subject to adjustment as provided
herein.
(c)
Company’s Failure to Timely Deliver Securities. If Warrant Shares are delivered later than as required under subsection
(a) above, Company agrees to pay, in addition to all other remedies available to Holder, a late charge equal to the greater of (i) $500.00
and (ii) 2% of the product of (1) the number of shares of Common Stock not issued to Holder on a timely basis and to which Holder is
entitled multiplied by (2) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the last possible date
which Company could have issued such shares of Common Stock to Holder without violating this Warrant, rounded to the nearest multiple
of $100.00 (such resulting amount, the “Warrant Share Value”) (but in any event the cumulative amount of such late
fees for each exercise shall not exceed 200% of the Warrant Share Value), per Trading Day until such Warrant Shares are delivered (the
“Late Fees”). Company acknowledges and agrees that the failure to timely deliver Warrant Shares hereunder is a material
breach of this Warrant and that the Late Fees are properly charged as liquidated damages to compensate Holder for such breach. Company
shall pay any Late Fees incurred under this subsection in immediately available funds upon demand. To the extent permitted by law, the
Company’s obligations to issue and deliver the shares of Common Stock upon exercise of the Warrant in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person of any obligation
to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance
that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of the shares of Common Stock.
Nothing herein shall limit the 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
the shares of Common Stock issuable upon exercise of this Warrant as required pursuant to the terms hereof.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), at any time commencing
on the six-month anniversary of the Original Issuance Date, the Holder may in its sole discretion (and without limiting the Holder’s
rights and remedies contained herein or in any of the other Transaction Documents), exercise this Warrant in whole or in part and, in
lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the
following formula:
(an
exercise pursuant to either clause (i) or (ii), a “Cashless Exercise”). For purposes of the foregoing formulas:
| |
A= |
The total number of shares with
respect to which this Warrant is then being exercised. |
| |
B= |
The Black Scholes Value (as defined in Section
16 herein). |
| |
C= |
The Closing Bid Price of the Common Stock
as of two (2) Trading Days prior to the time of such exercise (as such Closing Bid Price is defined in Section 16 herein). |
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of
Warrant Shares to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly
issue to the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to Holder such dispute
shall be resolved in accordance with Section 13.
(f)
Limitations on Exercises and Exchanges. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall
not be exercisable or exchangeable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates
would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding after giving effect to the issuance of
shares of Common Stock issuable upon exercise of the Warrants calculated in accordance with Section 13(d) of the Exchange Act (the “Maximum
Percentage”). To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable or
exchangeable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates)
and of which such securities shall be exercisable or exchangeable (as among all such securities owned by the Holder) shall, subject to
such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange
(as the case may be). No prior inability to exercise or exchange this Warrant pursuant to this paragraph shall have any effect on the
applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability or exchangeability.
For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with
respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act (as defined in
the Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph shall be implemented in
a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which
may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this
paragraph shall apply to a successor Holder of this Warrant. The holders of Common Stock shall be third party beneficiaries of this paragraph
and the Company may not waive this paragraph without the consent of holders of a majority of its Common Stock. For any reason at any
time, upon the written or oral request of the Holder, the Company shall within two (2) Business Days confirm orally and in writing to
the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise or exchange
of convertible or exercisable or exchangeable securities into Common Stock, including, without limitation, pursuant to this Warrant or
securities issued pursuant to the Purchase Agreement.
(g)
Reservation of Shares; Insufficient Authorized Shares. The Company shall initially reserve out of its authorized and unissued
Common Stock a number of shares of Common Stock equal to 200% of the maximum number of Warrant Shares issuable to satisfy the Company’s
obligations to issue shares of Common Stock hereunder, and the Company shall at all times keep reserved for issuance under this Warrant
a number of shares of Common Stock equal to 200% of the maximum number of Warrant Shares issuable to satisfy the Company’s obligation
to issue shares of Common Stock hereunder.
(h)
Activity Restrictions. For so long as Holder holds this Warrant or any Warrant Shares, Holder will not: (i) engage or participate
in any actions, plans or proposals which relate to or would result in (a) acquiring additional securities of the Company, alone or together
with any other Person, which would result in beneficially owning or controlling, or being deemed to beneficially own or control, more
than 9.99% of the total outstanding Common Stock or other voting securities of the Company, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving Company, (c) a sale or transfer of a material amount of assets of the Company,
(d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend
policy of the Company, (f) any other material change in the Company’s business or corporate structure, including but not limited
to, if the Company is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy
for which a vote is required by Section 13 of the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws
or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any Person, (h) causing
a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar
to any of those enumerated above, or (ii) request the Company or its directors, officers, employees, agents or representatives to amend
or waive any provision of this Section 1(h); provided, however, that notwithstanding anything to the contrary contain in
clauses (i) and (ii) above, Holder may vote any shares of Common Stock owned or controlled by it, solicit any proxies, or seek to advise
or influence any Person with respect to any voting securities of the Company. Holder may only exercise this Warrant for a cash exercise
price if the trading price at the time of exercise is greater than the then applicable Exercise Price.
2.
ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from time to time
as set forth in this Section 2.
(a)
Stock Dividends and Splits. Without limiting any provision of Section 4, if the Company, at any time on or after the Exchange
Date, (i) pays a stock dividend on one or more classes of its then outstanding Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its then outstanding Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock
split or otherwise) one or more classes of its then outstanding Common Stock into a smaller number of shares, then in each such case
the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after
such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for
the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event.
(b)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) or (b) of this Section
2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same
as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained
herein). In addition, and notwithstanding anything to the contrary contained herein, upon a Cashless Exercise as set forth in Section
1(d) hereof, the number of Warrant Shares for which this Warrant is exercisable immediately following such Cashless Exercise shall be
equal to (i) the number of Warrant Shares for which this Warrant was exercisable immediately prior to such Cashless Exercise less
(ii) the number of Warrant Shares as to which such Cashless Exercise was exercised (such number of Warrant Shares in this clause
(ii) in respect of such Cashless Exercise being equal to “A” in such Cashless Exercise formula in respect of such Cashless
Exercise) and the number of such Warrant Shares issuable hereunder shall automatically be adjusted, as necessary, to enable to the Company
to comply with its obligations to issue the Net Number of Shares of Common Stock under Section 1(d) hereof upon any Cashless Exercise
hereunder.
(c)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of cent and
the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue
or sale of shares of Common Stock.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition
to any adjustments pursuant to Section 2 above, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, indebtedness, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction, other than a distribution of Common Stock covered by Section
2(a)) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, provision shall
be made so that upon exercise of this Warrant, the Holder shall be entitled to participate in such Distribution to the same extent that
the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for such Distribution, 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 participation in such Distribution (provided, however, to the extent that the
Holder’s right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock
as a result of such Distribution to such extent) and such Distribution to such extent 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 Percentage).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells
any Options, variable price securities or rights to purchase stock, warrants, securities or other property pro rata to 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 regard to any limitations on exercise hereof, including
without limitation, the Maximum Percentage) 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 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 Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Maximum Percentage).
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents related to this Warrant
in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance reasonably satisfactory to
the Holder, including agreements confirming the obligations of the Successor Entity as set forth in this paragraph (b) and (c) and elsewhere
in this Warrant and an obligation to 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, including, without limitation, which is exercisable
for a corresponding number of shares of capital stock equivalent to the 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 adjustments to the 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 (ii) the shares of capital stock of the Successor Entity into which this
Warrant is exercisable are listed on NYSE, Nasdaq, OTCQB or OTCQB. Notwithstanding the foregoing, at the election of the Holder upon
exercise of this Warrant following a Fundamental Transaction, the Successor Entity shall deliver to the Holder, in lieu of the shares
of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction,
such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity), or other securities, cash, assets
or other property, which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction
had this Warrant been exercised immediately prior to the applicable Fundamental Transaction; provided, however, that such amount of reserved
Common Stock shall be limited by the Maximum Percentage of Common Stock as set forth in Section 1(f).
(c)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and shall
be applied as if this Warrant (and any such subsequent warrants issued hereunder) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied
however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant
(or any such other warrant)).
5.
NONCIRCUMVENTION. The Company hereby covenants
and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality
of the foregoing, the Company (i) shall not increase the par value of any Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so
long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common
Stock, solely for the purpose of effecting the exercise of this Warrant, the maximum number of shares of Common Stock as shall from time
to time be necessary to effect the exercise of this Warrant then outstanding; provided, however, that such amount of reserved Common
Stock shall be limited by the Maximum Percentage of Common Stock as set forth in Section 1(f).
6.
WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except
as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote
or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant
be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a shareholder of the
Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. If, at the time of the surrender
of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant
to an effective registration statement under the 1933 Act and under applicable state securities or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the
Company an opinion of counsel selected by the Holder and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred securities
under the 1933 Act.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute
and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional Common
Stock shall be given.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such
new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Original Issuance Date, and (iv) shall
have the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given
under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9.9 of the Purchase Agreement.
The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) as soon as practicable upon each adjustment of the Exercise Price and the number of Warrant Shares,
setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the
date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock,
or (B) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case
that such information, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent
that any notice provided hereunder (whether under this Section 8 or otherwise) constitutes, or contains, material, non-public information
regarding the Company, the Company shall simultaneously file such notice with the SEC (as defined in the Purchase Agreement) pursuant
to a Current Report on Form 6-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise
Notice shall be definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER. Except as otherwise provided
herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.
The Holder shall be entitled, at its option, to the benefit of any amendment of any other similar warrant issued under the Purchase Agreement.
No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
10.
SEVERABILITY. If any provision of this Warrant
is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that
would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid
and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of
this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties
as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise
be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).
11.
GOVERNING LAW; ARBITRATION OF DISPUTES. This
Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to determine
the proper venue for any disputes are incorporated herein by this reference. By its issuance or acceptance of this Warrant, each party
agrees to be bound by the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
12.
CONSTRUCTION; HEADINGS. This Warrant shall be
deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. Terms used
in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date (as
defined in the Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.
13.
DISPUTE RESOLUTION. In the case of a dispute
as to the determination of the Exercise Price, the Closing Sale Price, the Closing Bid Price or fair market value or the arithmetic calculation
of the Warrant Shares (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations or
arithmetic calculations (as the case may be) via email (i) within two (2) Business Days after receipt of the applicable notice giving
rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after
the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and the Company
are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Closing
Bid Price or fair market value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination
or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business
Days submit via email (a) the disputed arithmetic calculation of the Warrant Shares, the disputed determination of the Exercise Price,
the Closing Sale Price, the Closing Bid Price or fair market value (as the case may be) to an independent, reputable investment bank
selected by the Holder, with the consent of the Company (which may not be unreasonably withheld, conditioned or delayed), or (b) if acceptable
to the Holder, the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The
Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations
(as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives
such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination or
calculation (as the case may be) shall be binding upon all parties absent demonstrable error. The fees and expenses of such investment
bank or accountant shall be borne by the parties in the same proportion as the respective amounts by which the investment bank’s
or accountant’s determination differs from such party’s calculation. All other disputes with respect to the Warrant shall
be subject to the Arbitration Provisions (as defined in the Purchase Agreement) attached as an exhibit to the Purchase Agreement.
14.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES
AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to
comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and
the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject
to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to
enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation,
compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this
Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that
the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than the Holder or its agent on its behalf.
15.
TRANSFER. This Warrant may be offered for sale,
sold, transferred or assigned without the consent of the Company.
16.
CERTAIN DEFINITIONS. For purposes of this Warrant,
the following terms shall have the following meanings:
(a)
“Black Scholes Value” means the Black Scholes value of an option for one share of Common Stock at the date of the
applicable Cashless Exercise, as such Black Scholes value is determined, calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to $0.045 (as may be adjusted for stock
dividends, subdivisions, or combinations in the manner described in Section 2(a) herein), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate, (iii) a strike price equal to the Exercise Price in effect at the time of the applicable Cashless Exercise,
(iv) an expected volatility equal to 185%, and (v) a deemed remaining term of the Warrant of five (5) years (regardless of the actual
remaining term of the Warrant).
(b)
“Bloomberg” means Bloomberg, L.P.
(c)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in New York, New York,
Sydney, Australia or Auckland, New Zealand are authorized or required by law to remain closed.
(d)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if
the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the average of the bid prices, or the ask
prices, respectively, of all of the market makers for such security as reported in the “pink sheets” by OTC Markets Group
Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All
such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.
(e)
“Common Stock” means (i) the Company’s Common Stock, $0.001 par value per share, and (ii) any capital stock
into which such Common Stock of the Company shall have been changed or any share capital resulting from a reclassification of such Common
Stock.
(f)
“Expiration Date” means the date that is five (5) years from the Original Issuance Date or, if such date falls on
a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the
next date that is not a Holiday.
(g)
“Fundamental Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions,
(1) consolidate or merge with or into (whether or not the Company is the surviving entity) any other Person unless the shareholders of
the Company immediately prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock
after such consolidation or merger, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its properties or assets to any other Person, in connection with which the Company is dissolved, or (3) allow any other 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 (4) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person 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 or share purchase agreement or other business combination), or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations
promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.
(h)
“Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.
(i)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on the Principal Market or a national stock exchange or, if there is more
than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(j)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(k)
“Principal Market” means OTCQB.
(l)
“SEC” means the Securities and Exchange Commission or the successor thereto.
(m)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(n)
“Trading Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any
day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for
the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y)
with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.
(o)
“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).
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Shares of Common Stock to be duly executed as of the Exchange Date
set out above.
| |
MGT
CAPITAL INVESTMENTS, INC. |
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|
|
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By: |
/s/ Robert
Ladd |
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Name:
|
Robert Ladd |
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Title: |
President and CEO |
[Signature
Page to Warrant]
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
MGT
CAPITAL INVESTMENTS, INC.
The
undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”)
of MGT Capital Investments, Inc., a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Shares
of Common Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________
a “Cashless Exercise” with respect to _______________ Warrant Shares.
In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares, the Holder represents and
warrants that ____________ shares of Common Stock are to be delivered pursuant to such Cashless Exercise, as further specified in Annex
A to this Exercise Notice.
2.
Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms
of the Warrant.
3.
Delivery of Warrant Shares and Net Number of Common Stock. The Company shall deliver to Holder, or its designee or agent as specified
below, __________ shares of Common Stock in respect of the exercise contemplated hereby. Delivery shall be made to Holder, or for its
benefit, to the following address:
Address:
or,
if delivery is to be made by electronic book entry, to the following account:
Account
Number:_______________________________________________________________________
Transaction
Code Number:________________________________________________________________
Date:
_______________ __, ______
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|
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Name
of Registered Holder |
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|
| |
|
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Signature |
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|
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|
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Name
and Title of Signatory (Entities Only) |
ANNEX
A TO EXERCISE NOTICE
CASHLESS
EXERCISE CALCULATION
TO
BE FILLED IN BY THE REGISTERED HOLDER TO EXCHANGE THE
WARRANT
TO PURCHASE SHARES OF COMMON STOCK IN A CASHLESS EXERCISE PURSUANT TO SECTION 1(d) OF THE WARRANT
Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
Net
Number = (A x B)/C = ________________ Shares of Common Stock
For
purposes of the foregoing formula:
A=
the total number of shares with respect to which the Warrant is then being exercised = _________________.
B=
Black Scholes Value (as defined in Section 16 of the Warrant) = ______________.
C=
the Closing Bid Price of the Common Stock as of two (2) Trading Days prior to the time of such exercise (as such Closing Bid Price is
defined in Section 16 of the Warrant) = ______________.
Date:
_______________ __, ______
| |
|
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Name
of Registered Holder |
| |
|
| |
|
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Signature |
| |
|
| |
|
| |
Name
and Title of Signatory (Entities Only) |
