EXHIBIT
10.4


 


THIS NOTE AND THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)


 


 


US $60,000.00 


 


 


BLACKSTAR ENTERPRISE GROUP, INC.


8% CONVERTIBLE REDEEMABLE NOTE


DUE OCTOBER 11, 2022


 


 


FOR VALUE RECEIVED,
BLACKSTAR ENTERPRISE GROUP, INC. (the “Company”) promises to pay to the order of GS CAPITAL PARTNERS, LLC and its authorized
successors and Permitted Assigns, defined below, ("Holder"), the aggregate principal face amount Sixty Thousand
Dollars exactly (U.S. $60,000.00) on October 11, 2022 ("Maturity Date") and to pay interest on the principal amount
outstanding hereunder at the rate of 8% per annum commencing on October 11, 2021 ("Issuance Date"). The Company
acknowledges this Note was issued with a $2,500.00 original issue discount and as such the purchase price was $57,500.00. The interest
will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers
of this Note. The principal of, and interest on, this Note are payable at 30 Washington Street, Suite 5L, Brooklyn, NY 11201, initially,
and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The
Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any
amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder
at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment
of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the
sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph
4(b) herein. Permitted Assigns means any Holder assignment, transfer or sale of all or a portion of this Note accompanied by an
Opinion of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.


 


This Note is subject
to the following additional provisions:


 




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1.       This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers,
assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company
with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.


 


2.       The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.


 


3.       This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior
to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue,
and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing
to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prequalified prospective transferee of this Note, also is required to give the Company written confirmation that this Note
is being converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt
(including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date. All notices of conversion will be accompanied
by an Opinion of Counsel.


 


4.(a)The
Holder of this Note is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") at a price
for each share of Common Stock equal to 60% of the lowest trading price of the Common Stock as reported
on the National Quotations Bureau OTC Marketplace exchange which the Company’s shares are traded or any exchange upon which
the Common Stock may be traded in the future ("Exchange"), for the twenty prior trading days
including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion
is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard
or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within
3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the
shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but
unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the extent the Conversion
Price of the Company’s Common Stock closes below the par value per share, the Company will take all steps necessary to solicit
the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all
conversions submitted pending this increase. In the event the Company experiences a DTC “Chill” on its shares, the
Conversion Price shall be decreased to 50% instead of 60% while that “Chill” is in effect. In no event shall the
Holder be




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allowed to effect a conversion if such
conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed
4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days’ prior
written notice by the Investor). The conversion discount, look back period and other terms will be adjusted on a ratchet basis
if the Company offers a more favorable conversion discount, prepayment rate, interest rate, (whether through a straight discount
or in combination with an original issue discount), look back period or other more favorable term to another party for any financings
while this Note is in effect, including but not limited to defaults, penalties and the remedy for such defaults or penalties.


 


(b)       Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock ("Interest Shares"). Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.


 


(c) The Notes may be
prepaid or assigned with the following penalties/premiums:


 


	PREPAY DATE	PREPAY AMOUNT
	≤ 60 days	110% of principal plus accrued interest
	61- 120 days 	125% of principal plus accrued interest
	121-180 days 	135% of principal plus accrued interest


 


This Note may
not be prepaid after the 180th day. Such redemption must be closed and funded within 3 days of giving notice
of redemption of the right to redeem shall be null and void. Any partial prepayments will be made in accordance with the formula
set forth in the chart above with respect to principal, premium and interest.


 


(d)        Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization (excluding an increase in authorized capital) or other change or
exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii) any
consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other
than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii)
being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this
Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election
of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid
interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.


 


(e)        In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right




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thereafter, by converting this Note, to
purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable
upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares
of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note,
immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration
received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company
or successor person or entity acting in good faith.


 


5.       No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


6.       The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.


 


7.       The
Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder
in collecting any amount due under this Note.


 


8.       If
one or more of the following described "Events of Default" shall occur:


 


(a)       The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or


 


(b)       Any
of the representations or warranties made by the Company herein or in any agreement entered into by the Company in connection with
the execution and delivery of this Note, shall be false or misleading in any respect; or


 


(c)       The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or


 


(d)       The
Company shall (1) become insolvent (which does not include a “going concern opinion); (2) admit in writing its inability
to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its
dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part
of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against
it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or


 


(e)       A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or




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(f)       Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or


 


(g)       One
or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in
the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or


 


(h)       Defaulted
on or breached any term of any other purchase agreement or note or similar debt instrument into which the Company has entered and
failed to cure such default within the appropriate grace period; or


 


(i)       The
Company shall have its Common Stock delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades
on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934
act reports with the SEC;


 


(j)       If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;


 


(k)       The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal
of a restrictive legend; or


 


(l)        The
Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.


 


(m)       The
Company shall be delinquent in its periodic report filings with the Securities and Exchange Commission; or


 


(n)        The
Company shall cause to lose the “bid” price for its stock in a market (including the OTC marketplace or other exchange).


 


Then, or at any time
thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in
writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and
in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest
or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration
of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.  Upon an Event of Default, interest shall




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accrue at a default interest rate of 24%
per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. 
In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th
day after the conversion notice was delivered to the Company.  This penalty shall increase to $500 per day beginning on the
10th day.  In an event of a breach of Section 8(h) the Holder may elect to utilize the same remedy available under
the defaulted interest and such remedy shall be incorporated by reference into the terms of this Note. The penalty for a breach
of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. Further, if a breach of Section 8(m) occurs or
is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price
during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency
period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share.


 


If the Holder shall
commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then
if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs
and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


 


The Company must pay
the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day from the time of
the Holder’s written notice to the Company.


 


9.       In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.


 


10.       Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.


 


11.       The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell” issuer. Further. The Company will instruct its counsel to either (i) write a 144
opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.


12.       The
Company shall issue irrevocable transfer agent instructions reserving 13,245,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”). Upon full conversion of this Note, any shares remaining in the Share Reserve shall
be cancelled. The Company shall pay all transfer agent costs and legal fees associated with issuing and delivering the shares to
the Holder. If such amounts are to be paid by the Holder, it may deduct such amounts from the amounts being converted. The Company
should at all times reserve a minimum of four times the amount of shares required if the note would be fully converted.  The
Holder may reasonably request increases from time to time to reserve such amounts. The Company will instruct




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its transfer agent to provide
the outstanding share information to the Holder in connection with its conversions.


 


13.       The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.


 


14.       If
it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted
under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage
of any law that would prohibit or forgive the Company from paying all or a portion of the principal or interest on this Note.


 


15.       This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed
within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company
hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York or in
the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and the facsimile
transmission of an executed counterpart to this Agreement shall be effective as an original.









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IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by an officer thereunto duly authorized.


 


 


Dated: 10-11-21


 


 


 


BLACKSTAR ENTERPRISE GROUP, INC.


 


By: /s/ Joseph Kurczodyna


__________________________________


 


Title: CFO, COB


 


 


 





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EXHIBIT A


 


 


NOTICE OF CONVERSION


 


(To be Executed by the Registered Holder
in order to Convert the Note)


 


The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of BLACKSTAR ENTERPRISE GROUP,
INC. (“Shares”) according to the conditions set forth in such Note, as of the date written below.


 


If Shares are to be
issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable
with respect thereto.


 


Date of Conversion: _______________________________________________


Applicable Conversion Price: ________________________________________


Signature: ______________________________________________________


[Print Name of Holder and Title of Signer]


Address: _______________________________________________________


 


 


SSN or EIN: ___________________________________________________


Shares are to be registered in the following name: _________________________


 


Name: ________________________________________________________


Address: ______________________________________________________


Tel: __________________________________________________________


Fax: __________________________________________________________


SSN or EIN: ___________________________________________________


 


Shares are to be sent or delivered to the following account:


 


Account Name: __________________________________________________ 


Address: _______________________________________________________