Document:

EXHIBIT
      10.3

    

    [FORM
      OF
      PROMISSORY NOTE]

     

    
      	[$___________]	
              [__________
                __,
                2006]

            

    

        

    FOR
      VALUE
      RECEIVED, Sparta
      Commercial Services, Inc.,
      a
      Nevada corporation (“Borrower”), hereby promises to pay to
      _________________________________ (the “Holder”), without demand, the sum of
      $___________ on the forty-fifth (45th)
      calendar day from the date hereof (the “Maturity Date”), together with simple
      interest at the rate of 10% per annum. Whenever any payment to be made hereunder
      falls due on a Saturday, Sunday or business holiday in New York, New York,
      such
      payment may be made on the next succeeding business day and such extension
      of
      time will, in such case, be included in computing interest, if any, in
      connection with such payment. 

    

    Borrower
      may prepay this Promissory Note at any time, in whole or in part, with accrued
      interest to the date of prepayment, and without penalty. All payments on this
      Promissory Note shall be applied first to the payment of accrued interest and
      the balance shall be applied to principal.

    

    Borrower
      may extend the due date by up to forty-five (45) days.

    

    In
      the
      event of default on repayment by the Borrower, as penalty, the simple interest
      rate on the unpaid principal shall be increased to the lower of a rate of 20%
      per annum or the highest applicable rate allowable under law commencing from
      the
      date of default. 

    

    Additionally,
      in the event of default on repayment by the Borrower, the Equity Kicker and
      the
      Additional Equity (as both are defined in the Loan Agreement) to be issued
      to
      the Lender shall be increased by 50% for each month or portion thereof that
      such
      default has not been cured. For purposes of illustration only, assuming that
      the
      Equity Kicker is 50,000 shares of the Borrower’s common stock and the Additional
      Equity is 30,000 shares, then, upon an event of default on repayment by the
      Borrower, the Equity Kicker and the Additional Equity shall each be increased
      by
      40,000 shares of the Borrower’s common stock for each month or portion thereof
      that such default is not cured.

    

    Additionally,
      as penalty, the repayment after default of this Promissory Note shall be
      collateralized by a Security Interest. Such Security Interest shall mean a
      continuing security interest in, a lien upon and a right of setoff against,
      all
      present and future (i) Accounts (defined as all of Borrower's present and future
      accounts, contract rights, general intangibles, chattel paper, documents and
      instruments, as such terms are defined in the New York Uniform Commercial Code
      ("UCC"), including, without limitation, all obligations for the payment of
      money
      arising out of our sale of goods or rendition of services), (ii) moneys,
      securities and other property and the proceeds thereof, now or hereafter held
      or
      received by, or in transit to, Lender from or for Borrower, whether for
      safekeeping, pledge, custody, transmission, collection or otherwise, and all
      of
      Borrower’s deposits (general or special), balances, sums and credits with Lender
      at any time existing, (iii) all of Borrower’s right, title and interest, and all
      of Borrower’s rights, remedies, security and liens, in, to and in respect of the
      Accounts, including, without limitation, rights of stoppage in transit,
      replevin, repossession and reclamation and other rights and remedies of an
      unpaid vendor, lien or secured party, guaranties or other contracts of surety
      ship with respect to the Accounts, deposits or other security for the obligation
      of any Account Debtor, and credit and other insurance, (iv) all of Borrower’s
      right, title and interest in, to and in respect of all goods relating to, or
      which by sale have resulted in, Accounts, including, without limitation, all
      goods described in invoices or other documents or instruments with respect
      to,
      or otherwise representing or evidencing, any Account and all returned, retained
      or repossessed goods, (v) all deposit accounts, as such term is defined in
      the
      UCC, (vi) all books, records, ledger cards, computer programs and other property
      and general intangibles at any time evidencing or relating to the Accounts
      (“Records”), (vii) all other general intangibles of every kind and description,
      including (without limitation) trade names and trademarks and the goodwill
      of
      the business symbolized thereby, and Federal, State and local tax refund claims
      of all kinds, and (viii) all proceeds of the foregoing, in any form, including,
      without limitation, any claims against third parties for loss or damage to
      or
      destruction of any or all of the foregoing. The Security Interest shall be
      subordinate to the rights of any lending institution, any asset-based lending
      agreement, and any rights and preferences of investors in the Company’s Series A
      Convertible Preferred Stock. As of the date hereof, Borrower has not granted
      any
      security interest to any person. Except pursuant to agreements, terms and
      conditions with any lending institution, any asset-based lending agreement,
      any
      rights and preferences of investors in the Private Placement, and in the
      ordinary course of business, Borrower agrees not to grant to any person any
      security interest prior to the Maturity Date. 

    

    Any
      notice herein required or permitted to be given shall be in writing and sent
      by
      means of certified or registered mail, express mail, or other overnight delivery
      service, hand delivery confirmed by signed receipt or facsimile transmission
      (followed by prompt transmission of the original of such notice by any of the
      foregoing means) in each case proper postage or other charges pre-paid and
      addressed or directed to the Holder or to the Borrower as set forth
      below:

    

    If
      to the
      Borrower:

    Sparta
      Commercial Services, Inc.

    462
      Seventh Ave., 20th
      Floor

    New
      York,
      NY 10018

    Attn.:
      President

    Fax:
      212-239-2666

    

    If
      to the
      Holder:

    The
      address set forth in the Signature Page to the Loan Agreement.

    

    Such
      notice shall be deemed given when actually received. Both the Holder and
      Borrower may change the address and fax number for notices by service of notice
      to the other as herein provided.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      Promissory Note shall not be assignable. 

    

    Borrower
      waives demand for payment, notice of nonpayment, presentment, notice of
      dishonor, protest, and notice of protest. 

    

    This
      Promissory Note shall be governed by the internal laws of the State of New
      York,
      without regard to the principles of conflict of laws, and shall be enforced
      in
      the courts located in New York County in the State of New York.

    

    This
      Promissory Note, together with the Loan Agreement, is the entire agreement
      between the parties and neither party is relying on any prior or contemporaneous
      representation or promise, or any omission of any information, in entering
      into
      this Promissory Note. 

    

    IN
      WITNESS WHEREOF, Borrower has caused this Promissory Note to be signed in its
      name by its duly authorized representative on the date first written.

    

    
      	 	 	Sparta
              Commercial
              Services, Inc.
	 	 	 
	
            	By:  	
            
	 	
              
                

              

              Anthony
                L. Havens, President

              and
                Chief Executive Officer[FORM
                  OF PROMISSORY NOTE] 

              	
                EXHIBIT
                  10.4

              

      

    

     

    

    THIS
      NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
      OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST
      THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
      (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT
      AND
      ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE MAKER RECEIVES AN OPINION
      OF
      COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
      REASONABLY SATISFACTORY TO THE MAKER, THAT SUCH SECURITIES MAY BE OFFERED,
      SOLD,
      PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
      LAWS.

    

    SPARTA
      COMMERCIAL SERVICES, INC.

     

    PROMISSORY
      NOTE

    

    
      
        	$	
                November
                  1, 2006

              

      

    

    

    FOR
      VALUED RECEIVED, the undersigned, SPARTA COMMERCIAL SERVICES, INC., a Nevada
      corporation (the “Maker”),
      hereby promises to pay to the order XXXXX of (the “Payee”),
      the
      principal sum of XXXX THOUSAND
      AND NO/00 DOLLARS
      ($XXX),
      in the manner set forth below. All payments hereunder shall be made as set
      forth
      below, and each such payment shall be made in lawful money of the United States
      of America.

     

    This
      promissory note is one of the notes (the “Note”,
      or
      collectively, the “Notes”)
      issued
      pursuant to an offering by the Maker of an aggregate of $1,000,000 of the
      Notes.

     

    This
      Note
      is subject to the following terms and conditions:

     

    1. Payment.
      The
      entire balance of this Note shall be due and payable on XXX, 2007 (the
“Maturity
      Date”),
      unless earlier converted in accordance with Section
      3.
      Payment
      of this Note shall be made by surrender of this Note to the Maker at its offices
      at 462
      Seventh Ave., 20th
      Floor,
      New York, New York 10018, Attention: Anthony L. Havens, CEO, or
      at
      such other place as is designated in writing by the Maker. Interest on the
      unpaid principal amount of this Note shall accrue at the rate of six percent
      (6%) per annum and shall be payable at the same time as the payment of the
      principal amount of this Note.

    

    2. Prepayment.
      The
      Maker shall have the right to prepay the outstanding balance of this Note plus
      accrued interest thereon.

     

    3. Automatic
      Conversion.
      

     

    (a)  Upon
      the
      Maturity Date, or such earlier date as the Maker shall elect, this Note and
      all
      accrued interest thereon, at the option of the Maker, shall be automatically
      converted into shares of the Common Stock, $.001 par value per share, of the
      Company at the rate of $.XX per share. 

     

    (b)  If
      the
      Maker exercises such option, the Maker and the Payee each agree to execute
      any
      and all documents that may be required in connection with any such conversion,
      and upon receipt by the Payee of certificates representing equity securities
      issued pursuant to a conversion, the Payee shall surrender this Note to the
      Maker for cancellation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  Payment
      of Note.
      Subject
      to Section
      1
      hereof,
      the Maker will punctually pay or cause to be paid the amounts due hereunder
      at
      the dates and places and in the manner specified herein. Any sums required
      to be
      withheld from any payment on this Note by operation of law or pursuant to any
      order, judgment, execution, treaty, rule or regulation may be withheld by the
      Maker and paid over in accordance therewith.

     

    3.  Events
      of Default.
      The
      following are Events of Default hereunder:

     

    (a)  any
      failure by the Maker to pay when due all or any principal hereunder;
      or

     

    (b)  if
      the
      Maker or any material subsidiary of the Maker shall (i) apply for or consent
      to
      the appointment of a receiver, trustee, custodian or liquidator or any of its
      property, (ii) admit in writing its inability to pay its debts as they mature,
      (iii) make a general assignment for the benefit of creditors, (iv) be
      adjudicated a bankrupt or insolvent or be the subject of an order for relief
      under Title 11 of the United States Code, or (v) file a voluntary petition
      in
      bankruptcy or a petition or bankruptcy, reorganization, insolvency, readjustment
      of debt, dissolution or liquidation law or statute, or an answer admitting
      the
      material allegations of a petition filed against it in any proceeding under
      any
      such law, or (vi) take or permit to be taken any action in furtherance of or
      for
      the purpose of effecting any of the foregoing; or

     

    (c)  if
      any
      order, judgment or decree shall be entered, without the application, approval
      or
      consent of the Maker or any material subsidiary of the Maker, by any court
      of
      competent jurisdiction, approving a petition seeking reorganization of the
      Maker
      or any material subsidiary of the Maker or appointing a receiver, trustee,
      custodian, liquidator or other such official of the Maker or any material
      subsidiary, or of all or a substantial part of its assets, and such order,
      judgment or decree shall continue unstayed and in effect for any period of
      ninety (90) days; or

     

    (d)  any
      dissolution, liquidation or winding up of the Maker or any substantial portion
      of its business. 

     

    4.  Remedies
      on Default.
      If any
      Event of Default shall occur and be continuing, then the entire principal
      balance under this Note shall, at the option of the holder hereof and upon
      written notice to the Maker by Payee (except in the case of any Event of Default
      under Sections
      or
      6(b)
      or
6(c)
      above,
      in which event acceleration shall be automatic), become immediately due and
      payable.

     

    5.  Loss,
      Theft, Destruction or Mutilation of Note.
      Upon
      notice by the Payee to the Maker of the loss, theft, destruction or mutilation
      of this Note, and of indemnity or security reasonably satisfactory to the Maker,
      and upon reimbursement to the Maker of all reasonable expenses incidental
      thereto, and upon surrender and cancellation of this Note, if mutilated, the
      Maker will make and deliver a new Note of like tenor, in lieu of this Note.
      

     

    6.  Notice.
      Any
      notice or other communication required or permitted hereunder shall be in
      writing and shall be delivered personally, telecopied (with original sent via
      first-class mail) or sent by certified, registered, or express mail, postage
      prepaid, and shall be deemed given when so delivered personally, telecopied
      or,
      if mailed, five (5) days after the date of deposit in the United States mails,
      as follows:

     

    If
      to the
      Maker:

     

    Sparta
      Commercial Services, Inc. 

    462
      Seventh Ave., 20th
      Floor

    New
      York,
      New York 10018

    Attention:
      Anthony L. Havens, CEO

    

    If
      to the
      Payee:

     

    7.  Amendments.
      This
      Note may not be changed orally, but only by an agreement in writing and signed
      by the party against whom enforcement of any waiver, change, modification or
      discharge is sought.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8. Governing
      Law; Arbitration.
      This
      Note shall be deemed to be a contract made under the laws of the State of New
      York and shall be governed by and construed in accordance with the laws of
      the
      State of New York. If at any time any dispute, difference, or disagreement
      shall
      arise upon or in respect to this Note, then any such dispute, difference, and
      disagreement shall be referred to a single arbiter appointed by the President
      of
      the American Arbitration Association in accordance with the rules thereof,
      and
      such dispute, difference, or disagreement shall settled by arbitration in
      accordance with the then prevailing commercial rules of the American Arbitration
      Association, and judgment upon the award rendered by the arbiter may be entered
      in any court having jurisdiction thereof.  

    

    9 Collection
      Costs.
      In the
      event that the Payee shall, after the occurrence and during the continuance
      of
      an Event of Default (and provided that the Payee shall be permitted, at such
      time, to enforce its rights hereunder and retain payments received hereunder),
      turn this Note over to an attorney for collection, the Maker shall further
      be
      obligated to the Payee for the Payee's reasonable attorneys' fees and expenses
      incurred in connection with such collection. 

     

    10. Successors
      and Assigns.
      All the
      covenants, stipulation, promises and agreements in this Note contained by or
      on
      behalf of the Maker shall bind its successors and assigns, whether or not so
      expressed.

     

    11. Headings.
      The
      headings in this Note are solely for convenience of reference and shall be
      given
      no effect in the construction or interpretation of this Note.

     

    IN
      WITNESS WHEREOF, the Maker has duly caused this Note to be signed on its behalf,
      in its corporate name and by its duly authorized officer as of the date first
      set forth above.

     

    
      	 	 	 SPARTA
              COMMERCIAL SERVICES, INC.
	 
 	 
 	 
 
	
            	
            	By:
	 	
              
                

              

              Name:
                Anthony L. Havens

            
	 	
              Title:
                Chief Executive Officer

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