SECURED CONSTRUCTION TO PERMANENT NOTE


$1,750,000.00                                                      July 23, 1999
                                                           Boston, Massachusetts

     For value received, the undersigned promises to pay to USTrust ("Bank"), or
order,  at Bank,  the principal sum of One Million Seven Hundred Fifty  Thousand
($1,750,000.00)  Dollars,   together  with  interest  as  hereinafter  provided:
interest  only  shall be payable  monthly  on the first day of first  month next
succeeding  the date  hereof  through  and  including  December  1,  1999 on the
principal  sum  from  time to time  outstanding  at the  Base  Lending  Rate for
commercial  loans from time to time in effect at the Bank plus one (1%)  percent
per annum.  The term "Base  Lending  Rate" as used herein shall mean the rate of
interest  announced  by Bank  from  time to time at its head  office as its Base
Lending Rate,  it being  understood  that such rate is a reference  rate and not
necessarily the lowest rate of interest charged by the Bank. On December 1, 1999
(the "Conversion Date ") the outstanding  principal  balance  hereunder shall be
amortized  (based upon a twenty year  amortization)  over a five year term at an
interest  rate equal the Bank's  cost of funds on the  Conversion  Date plus two
hundred  twenty-five  basis points (or interest  shall continue to accrue at the
Base Lending Rate plus one (1%) percent as hereinafter described).  Beginning on
the  Conversion  Date,  the  principal  balance of this Note shall be payable in
sixty consecutive monthly installments as follows: $7,291.67 on January 1, 2000,
and the same amount (except the final  installment  which shall be the amount of
the outstanding principal balance, together with all accrued but unpaid interest
thereon) on the first day of each month thereafter.  Beginning on the Conversion
Date  interest  shall be payable  at the fixed rate equal to the Bank's  cost of
funds on the Conversion Date plus two hundred and twenty-five basis points or at
the  undersigned's  election prior to the Conversion  Date,  shall remain at the
Base Lending Rate plus one (1%) percent per annum. If no election is made by the
undersigned, interest shall continue at the variable rate set forth above, which
interest shall be payable  commencing on January 1, 2000 and on the first day of
each  month  thereafter  until  this  Note is  fully  paid.  Interest  shall  be
calculated on the basis of actual days elapsed and a 360-day year.

     In all events,  the entire  unpaid  principal  balance,  together  with all
accrued interest thereon shall be paid in full on December 1, 2004.

     This Note may be prepaid in whole or in part (prior to the Conversion Date)
without premium or penalty.  If this Note is prepaid, in whole or in part, after
the  Conversion  Date  (and  a  fixed  interest  rate  is  in  effect),  whether
voluntarily or as a result of acceleration or otherwise,  the undersigned  shall
reimburse  the Bank for the loss, if any,  including any loss profits  resulting
from such  prepayment,  as reasonably  determined by the Bank.  The  undersigned
shall pay shall loss upon  presentation by the Bank of a statement of the amount
of such loss  setting  forth the Bank's  calculation  thereof,  which notice and
calculation  (including  the  method of  calculation)  shall be deemed  true and
correct absent manifest error. Any partial  prepayments  shall be applied in the
inverse order of maturity.

     If this  Note is not  paid in full  on the  date of  maturity  or upon  the
exercise  by the Bank of its rights in the event of the  undersigned's  default,
interest  on unpaid  balances  shall  thereafter  be  payable  at a  fluctuating
interest  rate per annum  equal to four (4%)  percent  greater  than the rate of
interest specified herein.

     At the option of the holder,  this note shall  become  immediately  due and
payable  without  notice or demand upon the occurrence at any time of any of the
following events of default:  (1) the failure by the undersigned to pay when due
any principal, interest, fees, costs and expenses due to the holder hereunder or
otherwise;  (2) if any  statement,  representation  or  warranty  made  in or in
connection with the loan evidenced by this note, or in any supporting  financial
statement of the  undersigned or of any guarantor  hereof shall be found to have
been  false in any  material  respect;(3)  the  institution  by or  against  the
undersigned or any guarantor  hereof of any proceedings  pursuant to Title 11 of
the United  States  Code  entitled  "Bankruptcy"  (commonly  referred  to as the
Bankruptcy  Code) or any  other law in which the  undersigned  or any  guarantor
hereof is alleged to be  insolvent  or unable to pay their  respective  debts as
they  mature or the  making by the  undersigned  or any  guarantor  hereof of an
assignment for the benefit of creditors;  (4) the service upon the holder hereof
of a writ in which the holder is named as trustee of the  undersigned  or of any
guarantor hereof; (5) the occurrence of an event of default under or termination
for any

<PAGE>


reason  of the  Amended  and  Restated  Loan and  Security  Agreement  (Accounts
Receivable and Inventory)  dated October 31, 1994, as amended,  between the Bank
and Turbotec Products, Inc. (the "Agreement"); or (6) the occurrence of an event
of  default  under  that  certain   Construction   Loan  Agreement  between  the
undersigned and the Bank of even date.

     Any deposits or other sums at any time  credited by or due from the Bank to
the undersigned or any guarantor hereof, and any securities or other property of
the undersigned or any such guarantor, in the possession of the Bank, may at any
and all times be held and treated as security for the payment of the liabilities
hereunder; and the Bank may apply or set off such deposits or other sums, at any
time, and without notice to the  undersigned or to any such  guarantor,  against
any of such  liabilities,  whether or not the same have matured,  and whether or
not other collateral is available to the Bank.

     The undersigned agrees to pay all costs of collection  including reasonable
fees of attorneys.

     No delay or  omission  on the part of the  holder in  exercising  any right
hereunder  shall operate as a waiver of such right or of any other right of such
holder, nor shall any delay,  omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other  right on any future  occasion.  Every
one of the  undersigned  and every indorser or guarantor of this note regardless
of the time, order or place of signing waives presentment,  demand,  protest and
notices of every kind and assents to any one or more extensions or postponements
of the time of payment or any other indulgences, to any substitutions, exchanges
or  releases  of  collateral  if at any time  there be  available  to the holder
collateral  for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.

     This note is secured pursuant to the terms of an Open-End  Mortgage Deed of
even  date  herewith  on  property  located  at  651  Day  Hill  Road,  Windsor,
Connecticut, and a Security Agreement - Inventory, Accounts, Equipment and Other
Property dated September 4, 1992.

     All rights and  obligations  hereunder  shall be governed by the law of the
Commonwealth of Massachusetts and this note shall be deemed to be under seal.

Witness:                      THERMODYNETICS, INC.


_______________________            By:  ___________________________________
                                        Robert I. Lieberman
                                        Treasurer and Chief Financial Officer