TERM NOTE

Exhibit 10.3

TERM NOTE

FOR VALUE RECEIVED, the undersigned, MICRONETICS, INC., a Delaware corporation with an executive office at 26 Hampshire Drive, Hudson, New Hampshire 03051 (the “Borrower”), hereby promises to pay to the order of CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank chartered under the laws of the State of New Hampshire, with a place of business at 875 Elm Street, Manchester, New Hampshire 03101 (the “Bank”), at such office, or such other place or places as the holder hereof may designate in writing from time to time hereafter, in lawful currency of the United States of America and in immediately available funds, the principal sum of SIX MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($6,500,000.00), pursuant and subject to the terms, conditions, and limitations of this Note and the Commercial Loan Agreement dated of even date among the Borrower, the Guarantors, and the Bank, as the same may be amended and/or restated from time to time hereafter ( the “Loan Agreement”), together with interest thereon, all as provided in the Loan Agreement and herein below. All payments shall be made without counterclaim or setoff, and free and clear of, and without any deduction or withholding for, any taxes or other payments.

The Borrower’s “Debit Balance” (sometimes hereinafter referred to as the “Loan”) shall mean the debit balance in an account on the books of the Bank, maintained in the form of a ledger card, computer records or otherwise in accordance with the Bank’s customary practice and appropriate accounting procedures wherein there shall be recorded the date and the principal amount advanced by the Bank to the Borrower hereunder, each principal payment made by the Borrower to the Bank hereunder, and all other appropriate debits and credits. The Bank shall render to the Borrower a statement of account with respect thereto on a monthly basis. The statement shall be considered correct and accepted by the Borrower, unless Borrower notifies the Bank to the contrary within thirty (30) days after the date of mailing.

The holder of this Note is entitled to all of the benefits and rights, and is subject to all of the obligations, of the Bank under the Loan Agreement. However, neither this reference to the Loan Agreement nor any provision thereof shall impair the absolute and unconditional obligation of the Borrower to pay the principal and interest of this Note as herein provided. Terms not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement. This Note is identified in the Loan Agreement as the “Term Note”.

This Note evidences the Borrower’s continuing obligation to pay the Debit Balance (identified as the “Term Loan” in the Loan Agreement), plus interest and any other applicable charges as determined from time to time.

Borrower shall repay to holder of this Note the principal amount hereof in twenty (20) consecutive quarterly installments each in the amount of Three Hundred Twenty Five Thousand and 00/100 Dollars ($325,000.00). Each such quarterly installment shall be due and payable by

Citizens/Micronetics – Term Note

Borrower to the holder of this Note on or before the first Business Day of each January, April, July, and October hereafter until the Debit Balance is paid in full. Interest hereon shall accrue and be paid until the Debit Balance is paid in full at such interest rates and at such times, and pursuant to such calculations, as are specified in the Loan Agreement, the terms of which are hereby incorporated here