<PAGE>

                                                                    Exhibit 4.17

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 
AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER, OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT
AND IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.
  
                          PHOTRAN CORPORATION
                  10% CONVERTIBLE PROMISSORY NOTE


$3,500,000                   Minneapolis, Minnesota             February 9, 1998


   Photran Corporation, a Minnesota corporation (hereinafter called the 
"Company," which term includes any directly or indirectly controlled 
subsidiaries or successor entities), for value received, hereby promises to 
pay to St. James Capital Partners, L.P., a Delaware limited partnership  
(hereinafter called "Holder"), or its registered assigns, the principal sum 
of Three Million Five Hundred Thousand Dollars ($3,500,000), or so much as is 
advanced pursuant to this Note, together with accrued interest on the amount 
of such principal sum, payable in accordance with the terms set forth below.

   THE OBLIGATIONS OF THE COMPANY CONTAINED IN THIS NOTE ARE SUBJECT TO THE 
TERMS OF THAT CERTAIN SECURITY AGREEMENT BETWEEN THE COMPANY AND THE HOLDER 
DATED AS OF THE DATE HEREOF (THE "SECURITY AGREEMENT").  THE PROVISIONS OF 
THIS NOTE ARE SUBJECT TO THE TERMS OF THAT CERTAIN INTERCREDITOR AND 
SUBORDINATION AGREEMENT, DATED AS OF THE DATE HEREOF, AMONG THE COMPANY, 
HOLDER, STEVEN KING, COMMUNITY NATIONAL BANK AND HENSON & EFRON, P.A. (THE 
"INTERCREDITOR AND SUBORDINATION AGREEMENT").

                               ARTICLE I
 
                              DEFINITIONS

   For all purposes of this Note, except as otherwise expressly provided or 
unless the context otherwise requires: (i) the terms defined in this Article 
have the meanings assigned to them in this Article and include the plural as 
well as the singular; (ii) all accounting terms not otherwise defined herein 
have the meanings assigned to them in accordance with generally accepted 
accounting principles as promulgated from time to time by the Association of 
Independent Certified Public Accountants; and (iii) the words "herein" and 
"hereof" and other words of similar import refer to this Note as a whole and 
not to any particular Article, Section or other subdivision.

   "ADVANCES" shall have the meaning assigned to that term in Article II, 
Section A hereof.

                                       43

<PAGE>

   "AGREEMENT FOR PURCHASE AND SALE" means that certain Agreement for 
Purchase and Sale between the Company and Holder dated as of the date hereof.

   "BOARD OF DIRECTORS" means the board of directors of the Company as 
elected from time to time or any duly authorized committee of that board.

   "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday 
which is not a day on which banking institutions in Houston, Texas or 
Minneapolis, Minnesota are authorized or obligated by law or executive order 
to be closed.

   "COMMITMENT" means, at the time any determination thereof is to be made, 
the commitment of Holder to extend credit to the Company by means of 
Advances, which subject to Article III, Section A, shall be an amount equal 
to up to $3,500,000.

   "COMMON STOCK" means shares of common stock, no par value, of the Company.

   "CONVERSION PRICE" means the price per share determined in accordance with 
Article IV (as adjusted in accordance with the terms of this Note) at which 
shares of Common Stock shall be delivered to Holder upon conversion of this 
Note.

   "DEFAULT" means any event which is, or after notice or passage of time 
would be, an Event of Default.

   "DEFAULT RATE" means a rate per annum equal to 15%.

   "EVENT OF DEFAULT" has the meaning specified in Article III, Section A.

   "INDEBTEDNESS" of any Person means all indebtedness of such Person, 
whether outstanding on the date of this Note or hereafter created, incurred, 
assumed or guaranteed, (i) for the principal of, premium on and interest on 
all debts of the Person whether outstanding on the date of this Note or 
thereafter created for money borrowed by such Person (including capitalized 
lease obligations), money borrowed by others (including capitalized lease 
obligations) and guaranteed, directly or indirectly, by such Person, or 
purchase money indebtedness, or indebtedness secured by property at the time 
of the acquisition of such property by such Person, for the payment of which 
the Person is directly or contingently liable; (ii) for all accrued 
obligations of the Person in respect of any contract, agreement or instrument 
imposing an obligation upon the Person to pay over funds; (iii) for all trade 
debt of the Person; and (iv) for all deferrals, renewals, extensions and 
refundings of, and amendments, modifications and supplements to, any of the 
indebtedness referred to in (i), (ii) or (iii) above.

   "MATURITY DATE," when used with respect to the Note means the earlier of 
(i) the funding of an Outside Financing or (ii) August 9, 1999 (or such 
earlier date upon which the Note becomes due and payable).

   "NOTE" means this 10% Convertible Promissory Note in the original principal
amount of $3,500,000.

                                       44

<PAGE>

   "OUTSIDE FINANCING" shall be defined as (i) any transaction where the 
Company sells or transfers its equity or debt securities for cash whether in 
public or private offerings and (ii) any financing from a bank or other 
entity acting as a financial institution made to the Company or any 
Subsidiary; provided, however, that neither purchase money debt incurred to 
finance equipment in the ordinary course of business (or any refinancing 
thereof) nor the Small Business Administration loan in the amount of up to 
$833,000 from Community National Bank, a national banking corporation, to the 
Company dated as of December 31, 1997, shall be considered an Outside 
Financing.

   "PERSON" means any individual, corporation, limited liability company, 
partnership, joint venture, association, joint-stock company or other entity, 
trust, estate, unincorporated organization or government or any agency or 
political subdivision thereof.

   "REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights 
Agreement dated as of the date hereof by and between the Company and Holder.

   "SEC"  means the United States Securities and Exchange Commission or any 
other federal agency at the time administering the Securities Act.

   "SUBSIDIARY" means a corporation or other entity in which more than 50% of 
the outstanding voting stock or equity interests is owned or controlled, 
directly or indirectly, by the Company or any combination of the Company and 
one or more other Subsidiaries.  For the purposes of this definition, "VOTING 
STOCK" means stock or other interests which ordinarily has voting power for 
the election of directors, and equity interests means the right to receive 
the profits of the entity, when disbursed, or the assets of the entity upon 
liquidation or dissolution.

   "TRANSACTION DOCUMENTS" means the Note, the Agreement for Purchase and 
Sale, the Security Agreement, the Intercreditor and Subordination Agreement, 
the Registration Rights Agreement and the Warrants.

   "WARRANTS" means those certain warrants to purchase an aggregate of 
1,225,000 shares of Common Stock issued by the Company to Holder.

                               ARTICLE II

                       COMMITMENT AND ADVANCES

   A.   ADVANCES. Subject to the terms and conditions and relying on the 
representations and warranties set forth herein and in the other Transaction 
Documents, Holder agrees to make advances (collectively, the "Advances") to 
the Company, at any time and from time to time on and after the date of this 
Note to, but excluding, the Maturity Date, up to a principal amount not to 
exceed $3,500,000.  All Advances shall mature and be due and payable in full 
on the Maturity Date.  Once repaid, Advances may not be reborrowed. Each 
Advance shall be made in accordance with the procedures set forth in Article 
II, Section B.

                                       45

<PAGE>

   B.   BORROWING PROCEDURES OF ADVANCES.  In order to effect an Advance, the 
Company shall submit a Request for Advance in writing or by telecopy (or 
telephone notice promptly confirmed in writing or by telecopy) to Holder not 
later than 10:00 a.m., Houston, Texas time, on the borrowing date specified 
in the Request for Advance for such proposed Advance; provided, however, that 
Holder shall deliver $700,000 to the Company on the Closing Date (as defined 
in the Agreement for Purchase and Sale), less any expenses payable or 
reimbursable by the Company pursuant to the Agreement for Purchase and Sale, 
without submission of a Request for Advance.  The Requests for Advances shall 
refer to this Note and specify (x) in sufficient detail, the corporate use of 
the proceeds of such proposed Advance, (y) the Business Day upon which the 
proceeds of such proposed Advance are to be made available to the Company, 
and (z) the principal amount of such proposed Advance.  The obligation of 
Holder to make any Advance pursuant to a Request for Advance is subject to 
the satisfaction of Holder that (i) the proceeds will be used for a proper 
purpose and (ii) on the date such Advance is to be made, no Default or Event 
of Default then exists (both before and after giving effect to the making of 
such proposed Advance).

   C.  INTEREST ON ADVANCES AND PAYMENT DATES.

     1.   Subject to the provisions of Article II, Section D, the Advances 
   shall bear interest at 10% per annum.

     2.   Interest on each Advance shall be payable by the Company (i) in 
   respect of each Advance accruing interest at 10%, on the Maturity Date, (ii)
   in respect of each Advance accruing interest at the Default Rate, on demand, 
   and (iii) in respect of all Advances, on any prepayment (on the amount 
   prepaid), at maturity (whether by acceleration or otherwise) and, after 
   maturity, on demand.

   D.  INTEREST ON OVERDUE AMOUNTS.  If the Company fails to pay the 
principal of or interest on any Advance or any other amount when due 
hereunder, the Company shall on demand from time to time pay interest, to the 
extent permitted by law, on such defaulted amount from the date of such Event 
of Default up to (but not including) the date of actual payment (after as 
well as before judgment) at a rate per annum equal to the Default Rate.

   E.  VOLUNTARY PREPAYMENT OF ADVANCES. The Company shall have the right at 
any time and from time to time to prepay the Advances, in whole or in part, 
without penalty or premium, upon at least five (5) Business Day's prior 
written notice given to Holder pursuant to Article VII, Section F.

   F.  MANDATORY REPAYMENT OF ADVANCES.

       1.   The Company shall repay all outstanding Advances on the Maturity 
   Date.

       2.   The Company shall prepay this Note in full on or before the 
   close of business (Houston, Texas time) on the second Business Day 
   following the occurrence of an Outside Financing, such prepayment to be 
   in an amount equal to the net proceeds received by the Company or any 
   Subsidiary from such Outside Financing, but not to exceed the then 
   outstanding principal and accrued and unpaid interest on this Note. All 

                                       46

<PAGE>

   payments made under this Note shall be applied first to accrued interest,
   and the balance, if any, to principal; provided, however, that interest shall
   accrue on any remaining principal balance and shall be payable at the rate 
   provided above.

   G.   MANNER OF PAYMENT.  Both principal and interest are payable by delivery 
of checks to Holder at its address as set forth in this Note or wire transfers
pursuant to instructions from Holder.  If the date upon which the payment of
principal and interest is required to be made pursuant to this Note occurs other
than on a Business Day, then such payment of principal and interest shall be
made on the next occurring Business Day following said payment date and shall
include interest through said next occurring Business Day.

   H.  USE OF PROCEEDS.

       1.   The proceeds of all Advances shall be used to fund 
   obligations that arise in connection with the Company's dispute 
   resolutions with Shenzen WABO Group Company Limited and to provide 
   working capital required by the Company to expand its operations and for 
   the general corporate purposes set forth on Schedule 2.19 to the 
   Agreement for Purchase and Sale.
   
       2.   No portion of the proceeds of any Advance under this Note 
   shall be used by the Company in any manner that might cause the 
   borrowing or the application of such proceeds to violate Regulation G, 
   Regulation U, Regulation T, or Regulation X or any other regulation of 
   the Federal Reserve Board or to violate the Securities Exchange Act of 
   1934, as amended, in each case as in effect on the date or dates of such 
   borrowing and such use of proceeds.

                              ARTICLE III

                   EVENTS OF DEFAULT AND REMEDIES

   A.    EVENTS OF DEFAULT.  An "Event of Default" occurs if:

         1.   the Company defaults in the payment or a mandatory 
   prepayment of the principal or interest on the Note when such principal 
   or interest becomes due and payable; or

         2.   the Company defaults in the performance of any covenant 
   made by the Company in the Note, the Agreement for Purchase and Sale or 
   any of the other Transaction Documents, and such default remains uncured 
   for a period of 30 days after notice from the Holder, provided that a 
   default in the performance of any covenant in Sections 8(a), 8(c), 8(d), 
   8(e), 8(f), 8(h), 8(i), 8(j), 8(k), 8(l), 8(m) or 8(n) of the Security 
   Agreement or Article VI, Section A of this Note shall be an Event of 
   Default immediately upon occurrence; or

         3.   any representation or warranty made by the Company in the 
   Note, the Agreement for Purchase and Sale or any of the other 
   Transaction Documents or in any certificate furnished by the Company in 
   connection with the consummation of the 

                                       47

<PAGE>

   transactions contemplated hereby or thereby, is untrue in any material 
   respect as of the date of making thereof; or

         4.   the Company or any Subsidiary defaults in the payment when 
   due (whether by lapse of time, by declaration, by call for redemption or 
   otherwise) of the principal of or interest on any Indebtedness of the 
   Company (other than the Indebtedness evidenced by the Note or good-faith 
   disputes with trade creditors) having an aggregate principal amount in 
   excess of $100,000 and such default remains uncured for a period of 30 
   days; or

         5.    a court of competent jurisdiction enters a final and 
   non-appealable judgment or judgments against the Company or any 
   Subsidiary or any property or assets of the Company or any Subsidiary 
   for the payment of money aggregating $100,000 or more in excess of 
   applicable insurance coverage; or

         6.    a court of competent jurisdiction enters (i) a decree or 
   order for relief in respect of the Company or any Subsidiary in an 
   involuntary case or proceeding under any applicable federal or state 
   bankruptcy, insolvency, reorganization or other similar law or (ii) a 
   decree or order adjudging the Company or any Subsidiary a bankrupt or 
   insolvent, or approving as properly filed a petition seeking 
   reorganization, arrangement, adjustment or composition of or in respect 
   of the Company or any Subsidiary under any applicable federal or state 
   law, or appointing a custodian, receiver, liquidator, assignee, trustee, 
   sequestrator or other similar official of the Company or any Subsidiary 
   or of any substantial part of the property of the Company or any 
   Subsidiary or ordering the winding up or liquidation of the affairs of 
   the Company or any Subsidiary; or

         7.    the Company or any Subsidiary: (i) commences a voluntary 
   case or proceeding under any applicable federal or state bankruptcy, 
   insolvency, reorganization or other similar law or any other case or 
   proceeding to be adjudicated a bankrupt or insolvent; (ii) files a 
   petition, answer or consent seeking reorganization or similar relief 
   under any applicable federal or state law; (iii) makes an assignment for 
   the benefit of creditors; or (iv) admits in writing its inability to pay 
   its debts generally as they become due; or
   
         8.     any person or group (within the meaning of Section 13(d) 
   of the Securities Exchange Act of 1934, as amended) becomes the 
   beneficial owner of 25% or more of the total voting power of the Company 
   and was not the beneficial owner of 25% or more of the total voting 
   power of the Company as of the date of this Note;

         9.     the Company or any Subsidiary (i) merges or consolidates 
   with or into any other Person, unless the Company or such Subsidiary is 
   the surviving or acquiring party; or (ii) the Company or any Subsidiary 
   dissolves or liquidates; or (iii) the Company or any Subsidiary sells 
   all or any substantial portion of its assets.

   B. ACCELERATION OF MATURITY.  This Note and all accrued interest shall (i) 
automatically become immediately due and payable if an Event of Default 
described in Article III, Sections (A)(6) through (A)(9) occurs, and (ii) 
become immediately due and payable at the option of the Holder in its sole 
discretion if any other Event of Default occurs.

                                       48

<PAGE>


                            ARTICLE IV

                        CONVERSION OF NOTE

   Subject to and upon compliance with the provisions of this Article, at the 
option of Holder, all or any part of this Note may be converted at any time, 
at the principal amount hereof together with accrued and unpaid interest 
thereon, into fully paid and nonassessable shares (calculated as to each 
conversion to the nearest 1/100 of a share) of Common Stock.  The Conversion 
Price shall initially be $4.00 per share.  Notwithstanding anything else to 
the contrary set forth herein, the Holder shall have the right to convert 
this Note pursuant to the terms set forth herein at any time, including the 
30 Business Days following (i) the Maturity Date or (ii) any prepayment 
pursuant to Article II, Section E hereof.  If Holder elects to convert this 
Note after a prepayment has been made pursuant to Article II, Section E, then 
Holder shall return all or such portion of the funds paid to Holder as to 
which Holder has elected to convert, together with interest at the rate of 
10% per annum.

                                ARTICLE V

                     ADJUSTMENT OF CONVERSION PRICE

   A.   ANTI-DILUTION PROVISIONS. The Conversion Price shall be subject to 
adjustment from time to time as hereinafter provided. Upon each adjustment of 
the Conversion Price, the holder of this Note shall thereafter be entitled to 
purchase, at the Conversion Price resulting from such adjustment, the number 
of shares of Common Stock obtained by multiplying the Conversion Price in 
effect immediately prior to such adjustment by the number of shares 
purchasable pursuant hereto immediately prior to such adjustment and dividing 
the product thereof by the Conversion Price resulting from such adjustment.

   B.   ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF COMMON STOCK.

      1.   a.   If and whenever after the date hereof the Company shall 
      issue or sell any Common Stock for no consideration or for a 
      consideration per share less than the Conversion Price then, 
      forthwith, upon such issuance or sale, the Conversion Price shall 
      be reduced (but not increased, except as otherwise specifically 
      provided in this Article V, Section B), to the lower price per 
      share (calculated to the nearest one-ten thousandth of a cent, but 
      in any event not less than $.001 per share).

           b.   Notwithstanding the provisions of this Article V, 
      Section B, no adjustment shall be made in the Conversion Price in 
      the event that the Company issues, in one or more transactions, (i) 
      Common Stock upon exercise of any options issued to officers, 
      directors or employees of the Company pursuant to a stock option 
      plan or an employment, severance or consulting agreement as now or 
      hereafter in effect, in each case approved by the Board of 
      Directors (provided that the aggregate number of shares of Common 
      Stock which may be issuable, including options issued prior to the 
      date hereof, under all such employee plans and agreements shall at 
      no time exceed 725,000; (ii) Common Stock upon exercise of this 
      Note or any warrant 

                                       49

<PAGE>


      issued pursuant to the terms of the Agreement for Purchase and 
      Sale; (iii) Common Stock upon exercise of any stock purchase 
      warrant or option (other than the options referred to in clause (i) 
      above) or other convertible security outstanding on the date hereof 
      (other than any shares of Common Stock issuable on conversion of 
      any promissory note held by any Shareholder of the Company; 
      PROVIDED, HOWEVER, that no adjustment shall be made in the 
      Conversion Price in the event that the Company issues Common Stock 
      on conversion of the convertible promissory note made by the 
      Company in favor of Steven King, the Chairman of the Board of the 
      Company, in the principal amount of $200,000, in connection with 
      the Bridge Loan Agreement dated as of August 8, 1993, as amended 
      and restated March 15, 1996 and April 9, 1997, and as amended 
      February 9, 1998, and as it exists as of the date hereof); or (iv) 
      Common Stock to Shenzen WABO Group Company Limited pursuant to the 
      Settlement Agreement between the Company and Shenzen WABO Group 
      Company Limited.  In addition, for purposes of calculating any 
      adjustment of the Conversion Price as provided in this Article V, 
      Section B, all of the shares of Common Stock issuable pursuant to 
      any of the foregoing shall be assumed to be outstanding prior to 
      the event causing such adjustment to be made.






                                       50

<PAGE>


      
      2.   For purposes of this Article V, Section B, the following shall 
      be applicable:
      
         a.   ISSUANCE OF RIGHTS OR OPTIONS. In case at any time after the 
      date hereof the Company shall in any manner grant (whether directly 
      or by assumption in a merger or otherwise) any rights to subscribe 
      for or to purchase, or any options for the purchase of, Common 
      Stock or any stock or securities convertible into or exchangeable 
      for Common Stock (such convertible or exchangeable stock or 
      securities being herein called "Convertible Securities") (other 
      than warrants, options or convertible securities issued as 
      consideration for or assumed in conjunction with an acquisition or 
      to officers, directors, or employees of the acquired entity in 
      conjunction therewith), whether or not such rights or options or 
      the right to convert or exchange any such Convertible Securities 
      are immediately exercisable, and the price per share for which 
      shares of Common Stock are issuable upon the exercise of such 
      rights or options or upon conversion or exchange of such 
      Convertible Securities (determined by dividing (i) the total 
      amount, if any, received or receivable by the Company as 
      consideration for the granting of such rights or options, plus the 
      minimum aggregate amount of additional consideration, if any, 
      payable to the Company upon the exercise of such rights or options, 
      or plus, in the case of such rights or options that relate to 
      Convertible Securities, the minimum aggregate amount of additional 
      consideration, if any, payable upon the issue or sale of such 
      Convertible Securities and upon the conversion or exchange thereof, 
      by (ii) the total maximum number of shares of Common Stock issuable 
      upon the exercise of such rights or options or upon the conversion 
      or exchange of all such Convertible Securities issuable upon the 
      exercise of such rights or options) shall be less than the 
      Conversion Price in effect as of the date of granting such rights 
      or options, then the total maximum number of shares of Common Stock 
      issuable upon the exercise of such rights or options or upon 
      conversion or exchange of all such Convertible Securities issuable 
      upon the exercise of such rights or options shall be deemed to be 
      outstanding as of the date of the granting of such rights or 
      options and to have been issued for such price per share, with the 
      effect on the Conversion Price specified in Article V, Section 
      B(1)(a) hereof.  Except as provided in Article V, Section B(2) 
      hereof, no further adjustment of the Conversion Price shall be made 
      upon the actual issuance of such Common Stock or of such 
      Convertible Securities upon exercise of such rights or options or 
      upon the actual issuance of such Common Stock upon conversion or 
      exchange of such Convertible Securities.
      
         b.   CHANGE IN OPTION PRICE OR CONVERSION RATE. Upon the happening 
      of any of the following events, namely, if the purchase price 
      provided for in any right or option referred to in Article V, 
      Section B(2) above, the additional consideration, if any, payable 
      upon the conversion or exchange of any Convertible Securities 
      referred to in Article V, Section B(2)(a) hereof, or the rate at 
      which any Convertible Securities referred to in Article V, Section 
      B(2)(a) hereof, are convertible into or exchangeable for Common 
      Stock shall change (other than under or by reason of provisions 
      designed to protect against dilution), the Conversion Price then in 
      effect hereunder shall forthwith be readjusted (increased or 
      decreased, as the case may be) to the Conversion Price that would 
      have been in effect at such time had such rights, 

                                       51

<PAGE>

      options or Convertible Securities still outstanding provided for 
      such changed purchase price, additional consideration or conversion 
      rate, as the case may be, at the time initially granted, issued or 
      sold. On the expiration of any such option or right referred to in 
      Article V, Section B(2)(a) hereof, or on the termination of any 
      such right to convert or exchange any such Convertible Securities 
      referred to in Article V, Section B(2)(a) hereof, the Conversion 
      Price then in effect hereunder shall forthwith be readjusted 
      (increased or decreased, as the case may be) to the Conversion 
      Price that would have been in effect at the time of such expiration 
      or termination had such right, option or Convertible Securities, to 
      the extent outstanding immediately prior to such expiration or 
      termination, never been granted, issued or sold, and the Common 
      Stock issuable thereunder shall no longer be deemed to be 
      outstanding. If the purchase price provided for in Article V, 
      Section B(2)(a) hereof or the rate at which any Convertible 
      Securities referred to in Article V, Section B(2)(a) hereof are 
      convertible into or exchangeable for Common Stock shall be reduced 
      at any time under or by reason of provisions with respect thereto 
      designed to protect against dilution, then in case of the delivery 
      of Common Stock upon the exercise of any such right or option or 
      upon conversion or exchange of any such Convertible Securities, the 
      Conversion Price then in effect hereunder shall, if not already 
      adjusted, forthwith be adjusted to such amount as would have 
      obtained had such right, option or Convertible Securities never 
      been issued as to such Common Stock and had adjustments been made 
      upon the issuance of the Common Stock delivered as aforesaid, but 
      only if as a result of such adjustment the Conversion Price then in 
      effect hereunder is thereby reduced.
            
         c.   CONSIDERATION FOR STOCK. In case at any time Common Stock or 
      Convertible Securities or any rights or options to purchase any 
      such Common Stock or Convertible Securities shall be issued or sold 
      for cash, the consideration therefor shall be deemed to be the 
      amount received by the Company therefor. In case at any time any 
      Common Stock, Convertible Securities or any rights or options to 
      purchase any such Common Stock or Convertible Securities shall be 
      issued or sold for consideration other than cash, the amount of the 
      consideration other than cash received by the Company shall be 
      deemed to be the fair value of such consideration, as determined 
      reasonably and in good faith by the Board of Directors of the 
      Company. In case at any time any Common Stock, Convertible 
      Securities or any rights or options to purchase any Common Stock or 
      Convertible Securities shall be issued in connection with any 
      merger or consolidation in which the Company is the surviving 
      corporation, the amount of consideration received therefor shall be 
      deemed to be the fair value, as determined reasonably and in good 
      faith by the Board of Directors of the Company, of such portion of 
      the assets and business of the nonsurviving corporation as such 
      Board of Directors may determine to be attributable to such Common 
      Stock, Convertible Securities, rights or options as the case may 
      be. In case at any time any rights or options to purchase any 
      shares of Common Stock or Convertible Securities shall be issued in 
      connection with the issuance and sale of other securities of the 
      Company, together consisting of one integral transaction in which 
      no consideration is allocated to such rights or options by the 
      parties, such rights or options shall be deemed to have been issued 
      without consideration.

                                       52

<PAGE>

         d.   RECORD DATE. In the case the Company shall take a record of 
      the holders of its Common Stock for the purpose of entitling them 
      (i) to receive a dividend or other distribution payable in Common 
      Stock or Convertible Securities, or (ii) to subscribe for or 
      purchase Common Stock or Convertible Securities, then such record 
      date shall be deemed to be the date of the issuance or sale of the 
      Common Stock or Convertible Securities deemed to have been issued 
      or sold as a result of the declaration of such dividend or the 
      making of such other distribution or the date of the granting of 
      such right of subscription or purchase, as the ease may be.

         e.   TREASURY SHARES. The number of shares of Common Stock 
      outstanding at any given time shall not include shares owned 
      directly by the Company in treasury, and the disposition of any 
      such shares shall be considered an issuance or sale of Common Stock 
      for the purpose of this Article V, Section B.

   C.   STOCK DIVIDENDS. In case the Company shall declare a dividend or make 
any other distribution upon any shares of the Company, payable in Common 
Stock or Convertible Securities, any Common Stock or Convertible Securities, 
as the case may be, issuable in payment of such dividend or distribution 
shall be deemed to have been issued or sold without consideration.

   D.   STOCK SPLITS AND REVERSE SPLITS. In the event that the Company shall 
at any time subdivide its outstanding shares of Common Stock into a greater 
number of shares, the Conversion Price in effect immediately prior to such 
subdivision shall be proportionately reduced and the number of Shares into 
which this Note may be converted immediately prior to such subdivision shall 
be proportionately increased, and conversely, in the event that the 
outstanding shares of Common Stock shall at any time be combined into a 
smaller number of shares, the Conversion Price in effect immediately prior to 
such combination shall be proportionately increased and the number of Shares 
into which this Note may be converted immediately prior to such combination 
shall be proportionately reduced. Except as provided in this Article V, 
Section D no adjustment in the Conversion Price and no change in the number 
of Shares shall be made under this Article V as a result of or by reason of 
any such subdivision or combination.

   E.   REORGANIZATIONS AND ASSET SALES. If any capital reorganization or 
reclassification of the capital stock of the Company, or any consolidation, 
merger or share exchange of the Company with another Person, or the sale, 
transfer or other disposition of all or substantially all of its assets to 
another Person shall be effected in such a way that holders of Common Stock 
shall be entitled to receive capital stock, securities or assets with respect 
to or in exchange for their shares, then the following provisions shall apply:


        1.  As a condition of such reorganization, reclassification, 
     consolidation, merger, share exchange, sale, transfer or other 
     disposition (except as otherwise provided below in Article V, 
     Section E(3), lawful and adequate provisions shall be made whereby 
     the holder of this Note shall thereafter have the right to purchase 
     and receive upon the terms and conditions specified in this Note 
     and in lieu of the shares immediately theretofore receivable upon 
     the exercise of the rights represented hereby, such shares of 
     capital stock, securities or assets as may be issued or payable 
     with respect to or in exchange for a number of outstanding 

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<PAGE>

     shares of such Common Stock equal to the number of shares immediately
     theretofore so receivable had such reorganization, 
     reclassification, consolidation, merger, share exchange or sale not 
     taken place, and in any such case appropriate provision reasonably 
     satisfactory to such holder shall be made with respect to the 
     rights and interests of such holder to the end that the provisions 
     hereof (including, without limitation, provisions for adjustments 
     of the Conversion Price and of the number of shares receivable upon 
     the exercise) shall thereafter be applicable, as nearly as 
     possible, in relation to any shares of capital stock, securities or 
     assets thereafter deliverable upon the exercise of this Note.

        2.   In the event of a merger, share exchange or consolidation of the 
     Company with or into another Person as a result of which a number of shares
     of common stock or its equivalent of the successor Person greater or lesser
     than the number of shares of Common Stock outstanding immediately prior to 
     such merger, share exchange or consolidation are issuable to holders of 
     Common Stock, then the Conversion Price in effect immediately prior to such
     merger, share exchange or consolidation shall be adjusted in the same 
     manner as though there were a subdivision or combination of the outstanding
     shares of Common Stock.

        3.   The Company shall not effect any such consolidation, 
     merger, share exchange, sale, transfer or other disposition unless 
     prior to or simultaneously with the consummation thereof the successor 
     Person (if other than the Company) resulting from such consolidation, 
     share exchange or merger or the Person purchasing or otherwise 
     acquiring such assets shall have assumed by written instrument 
     executed and mailed or delivered to the Holder hereof at the last 
     address of such Holder appearing on the books of the Company the 
     obligation to deliver to such Holder such shares of capital stock, 
     securities or assets as, in accordance with the foregoing provisions, 
     such Holder may be entitled to receive, and all other liabilities and 
     obligations of the Company hereunder. Upon written request by the 
     Holder hereof, such successor Person will issue a new Note revised to 
     reflect the modifications in this Note effected pursuant to this 
     Article V, Section E.

        4.   If a purchase, tender or exchange offer is made to 
     and accepted by the holders of 50% or more of the outstanding 
     shares of Common Stock, the Company shall not effect any 
     consolidation, merger, share exchange or sale, transfer or other 
     disposition of all or substantially all of the Company's assets with 
     the Person having made such offer or with any affiliate of such 
     Person, unless prior to the consummation of such consolidation, 
     merger, share exchange, sale, transfer or other disposition the holder 
     hereof shall have been given a reasonable opportunity to then elect to 
     receive upon the conversion of this Note either the capital stock, 
     securities or assets then issuable with respect to the Common Stock or 
     the capital stock, securities or assets, or the equivalent, issued to 
     previous holders of the Common Stock in accordance with such offer.

     F.   ADJUSTMENT FOR ASSET DISTRIBUTION. If the Company declares a 
dividend or other distribution payable to all holders of shares of 
Common Stock in evidences of Indebtedness of the Company or other 
assets of the Company (including, cash (other than regular cash 
dividends declared by the Board of Directors), capital stock (other 
than Common Stock, Convertible Securities or options or rights 
thereto) or other property), the Conversion Price in effect 
immediately prior to such declaration of such dividend or other 
distribution shall be reduced by an amount equal to the amount of such 
dividend or distribution payable per share of Common Stock, in the 
case of a cash 

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<PAGE>

dividend or distribution, or by the fair value of such dividend or 
distribution per share of Common Stock (as reasonably determined in 
good faith by the Board of Directors of the Company), in the case of 
any other dividend or distribution. Such reduction shall be made 
whenever any such dividend or distribution is made and shall be 
effective as of the date as of which a record is taken for purpose of 
such dividend or distribution or, if a record is not taken, the date 
as of which holders of record of Common Stock entitled to such 
dividend or distribution are determined.

   G.   DE MINIMIS ADJUSTMENTS. No adjustment in the number of shares 
of Common Stock purchasable hereunder shall be required unless such 
adjustment would require an increase or decrease of at least one share 
of Common Stock purchasable upon conversion of the Note and no 
adjustment in the Conversion Price shall be required unless such 
adjustment would require an increase or decrease of at least $.01 in 
the Conversion Price; provided, however, that any adjustments which by 
reason of this Article V, Section G are not required to be made shall 
be carried forward and taken into account in any subsequent 
adjustment. All calculations shall be made to the nearest full share 
or nearest one hundredth of a dollar, as applicable.

   H.   NOTICE OF ADJUSTMENT. Whenever the Conversion Price or the 
number of Shares issuable upon the conversion of the Note shall be 
adjusted as herein provided, or the rights of the holder hereof shall 
change by reason of other events specified herein, the Company shall 
compute the adjusted Conversion Price and the adjusted number of 
Shares in accordance with the provisions hereof and shall prepare an 
Officer's Certificate setting forth the adjusted Conversion Price and 
the adjusted number of Shares issuable upon the conversion of this 
Note or specifying the other shares of stock, securities or assets 
receivable as a result of such change in rights, and showing in 
reasonable detail the facts and calculations upon which such 
adjustments or other changes are based. The Company shall cause to be 
mailed to the Holder hereof copies of such Officer's Certificate 
together with a notice stating that the Conversion Price and the 
number of Shares purchasable upon conversion of this Note have been 
adjusted and setting forth the adjusted Conversion Price and the 
adjusted number of Shares purchasable upon conversion of this Note.

   I.   NOTIFICATIONS TO HOLDERS. In case at any time the Company 
proposes:

         (i)  to declare any dividend upon its Common Stock payable in 
     capital stock or make any special dividend or other distribution 
     (other than cash dividends) to the holders of its Common Stock;

        (ii)  to offer for subscription pro rata to all of the holders 
     of its Common Stock any additional shares of capital stock of any 
     class or other rights;

       (iii)  to effect any capital reorganization, or reclassification 
     of the capital stock of the Company, or consolidation, merger or share 
     exchange of the Company with another Person, or sale, transfer or 
     other disposition of all or substantially all of its assets; or

        (iv)  to effect a voluntary or involuntary dissolution, liquidation 
     or winding up of the Company,

                                       55

<PAGE>

then, in any one or more of such cases, the Company shall give the 
holder hereof (a) at least 10 days (but not more than 90 days) prior 
written notice of the date on which the books of the Company shall 
close or a record shall be taken for such dividend, distribution or 
subscription rights or for determining rights to vote in respect of 
any such issuance, reorganization, reclassification, consolidation, 
merger, share exchange, sale, transfer, disposition, dissolution, 
liquidation or winding up, and (b) in the case of any such issuance, 
reorganization, reclassification, consolidation, merger, share 
exchange, sale, transfer, disposition, dissolution, liquidation or 
winding up, at least 10 days (but not more than 90 days) prior written 
notice of the date when the same shall take place. Such notice in 
accordance with the foregoing clause (a) shall also specify, in the 
case of any such dividend, distribution or subscription rights, the 
date on which the holders of Common Stock shall be entitled thereto, 
and such notice in accordance with the foregoing clause (b) shall also 
specify the date on which the holders of Common Stock shall be 
entitled to exchange their Common Stock, as the case may be, for 
securities or other property deliverable upon such reorganization, 
reclassification, consolidation, merger, share exchange, sale, 
transfer, disposition, dissolution, liquidation or winding up, as the 
case may be.

   J.   COMPANY TO PREVENT DILUTION. 

        1.   If any event or condition occurs as to which other 
     provisions of this Article are not strictly applicable or if strictly 
     applicable would not fairly protect the exercise or purchase rights of 
     this Note evidenced hereby in accordance with the essential intent and 
     principles of such provisions, or that might materially and adversely 
     affect the exercise or purchase rights of the holder hereof under any 
     provisions of this Note, then the Company shall make such adjustments 
     in the application of such provisions, in accordance with such 
     essential intent and principles, so as to protect such exercise and 
     purchase rights as aforesaid, and any adjustments necessary with 
     respect to the Conversion Price and the number of shares purchasable 
     hereunder so as to preserve the rights of the holder hereunder. In no 
     event shall any such adjustment have the effect of increasing the 
     Conversion Price as otherwise determined pursuant to this Article 
     except in the event of a combination of shares of the type 
     contemplated in Article V, Section D hereof, and then in no event to 
     an amount greater than the Conversion Price as adjusted pursuant to 
     Article V, Section D hereof.
     
        2.   In furtherance of the anti-dilution protections afforded 
     Holder pursuant to this Article V, in the event of any dilutive event 
     described in this Article V as a result of the settlement of any of 
     the Company's existing or future litigation matters (including, but 
     not limited to, RADMAN ET AL V. PHOTRAN CORPORATION, DAVID E. 
     STEVENSON V. PHOTRAN CORPORATION and MIK PHYSICS INCORPORATED V. 
     PHOTRAN CORPORATION), not only will Holder be afforded an adjustment 
     to the Conversion Price as set forth in this Article V, but Holder 
     shall also be entitled to the number of shares issuable upon 
     conversion of this Note increased by the greater of (i) the ratio 
     which the Conversion Price immediately before such issuance bears to 
     the adjusted Conversion Price immediately after such issuance and (ii) 
     the number of shares that would be equal to the same percentage 
     ownership by the Holder of the Company after giving effect to the 
     dilutive event as existed before the occurrence of the dilutive event.

                                       56

<PAGE>

                                   ARTICLE VI

                                   COVENANTS

   The Company covenants and agrees that, so long as this Note is 
outstanding:

    A.   PAYMENT OF PRINCIPAL AND ACCRUED INTEREST.  The Company will 
duly and punctually pay or cause to be paid the principal sum of this 
Note, together with interest accrued thereon from the date hereof to 
the date of payment, in accordance with the terms hereof.

    B.   CORPORATE EXISTENCE.  The Company will do or cause to be done 
all things necessary to preserve and keep in full force and effect its 
corporate existence, rights (charter and statutory) and franchises; 
provided, however, that the Company shall not be required to preserve 
any such right or franchise if it shall reasonably determine that the 
preservation thereof is no longer desirable in the conduct of its 
business.

    C.   TAXES; CLAIMS; ETC.  The Company will, and will cause each 
Subsidiary to, promptly pay and discharge all lawful taxes, 
assessments, and governmental charges or levies imposed upon it or 
upon its income or profits, or upon any of its properties, real, 
personal, or mixed, before the same shall become in default, as well 
as all lawful claims for labor, materials, and supplies or otherwise 
which, if unpaid, might become a lien or charge upon such properties 
or any part thereof, and which lien or charge will have a material 
adverse effect on the business of the Company; provided, however, that 
neither the Company nor any Subsidiary shall be required to pay or 
cause to be paid any such tax, assessment, charge, levy, or claim 
prior to institution of foreclosure proceedings if the validity 
thereof shall concurrently be contested in good faith by appropriate 
proceedings and if the Company shall have established reserves deemed 
by the Company adequate with respect to such tax, assessment, charge, 
levy, or claim.

   D.   MAINTENANCE OF EXISTENCE AND PROPERTIES.  The Company will, 
and will cause each Subsidiary to, keep its material properties in 
good repair, working order, and condition, ordinary wear and tear 
excepted, so that the business carried on may be properly conducted at 
all times in accordance with prudent business management.

    E.   NOTICE OF DEFAULTS.  The Company will promptly notify the 
Holder in writing of the occurrence of (i) any Event of Default under 
this Note, and (ii) any event of default (or if any event of default 
would result upon any payment with respect to this Note) with respect 
to any Indebtedness as such event of default is defined therein or in 
the instrument under which it is outstanding, permitting holders to 
accelerate the maturity of such Indebtedness.

    F.   MERGERS AND ACQUISITIONS.  Without the consent of the Holder, 
neither the Company nor any Subsidiary will dissolve, liquidate, 
consolidate or merge with or sell or transfer all or a substantial 
portion of its assets to any Person.

     G.    COMPLIANCE WITH LAWS.  The Company will promptly comply 
with all laws, ordinances and governmental rules and regulations to 
which it is subject.

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<PAGE>

                                ARTICLE VII

                               MISCELLANEOUS

   A.   COLLECTION FEES.  If this Note is placed in the hands of an 
attorney for collection, and if it is collected through any legal 
proceedings at law or in equity or in bankruptcy, receivership or 
other court proceedings, the Company hereby undertakes to pay all 
costs and expenses of collection including, but not limited to, court 
costs and the reasonable attorney's fees of Holder.

   B.   CONSENT TO AMENDMENTS.  This Note 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, if and only if the Company 
shall obtain the written consent to such amendment, action or omission 
to act from the holders of a majority of the aggregate principal 
amount of the Note.

   C.   BENEFITS OF NOTE.  Nothing in this Note, express or implied, 
shall give to any Person, other than the Company, Holder, and their 
successors any benefit or any legal or equitable right, remedy or 
claim under or in respect of this Note.

   D.   SUCCESSORS AND ASSIGNS.  All covenants and agreements in this 
Note contained by or on behalf of the Company and the Holder shall 
bind and inure to the benefit of the respective successors and assigns 
of the Company and Holder.

   E.   RESTRICTIONS ON TRANSFER.  This Note may not be sold or 
transferred in the absence of registration or an exemption therefrom 
under all applicable securities laws.  Notwithstanding the foregoing 
provisions of this Section E, Holder may grant a security interest in 
this Note to its lender or lenders and as between Holder and its lender 
or lenders, this Note is transferable in the same manner and with the 
same effect as in the case of a negotiable instrument payable to a 
specified Person.  Any lender to which Holder grants a security interest 
in this Note shall be entitled to exercise all remedies to which it is 
entitled by contract or by law, including, without limitation, 
transferring this Note into its own name or into the name of any 
purchaser at any sale undertaken in connection with enforcement by such 
lender of its remedies.  Prior to any transfer (other than the grant of 
a security interest) as provided herein, the transferor shall provide 
written notice to the Company.  The Company, however, may treat Holder 
as the owner hereof for all purposes until this Note shall have been 
surrendered for transfer as hereinafter provided.  Upon surrender of 
this Note duly executed by Holder or its agent or attorney, the Company 
shall execute and deliver a new Note in the name of the assignee or 
assignees and in the denominations specified in such instrument of 
assignment, and this Note shall promptly be canceled.

   F.   NOTICE; ADDRESS OF PARTIES.  Except as otherwise provided, all 
communications to the Company or Holder provided for herein or with 
reference to this Note shall be deemed to have been sufficiently given 
or served for all purposes on the third Business Day after being sent 
as certified or registered mail, postage and charges prepaid, to the 
following addresses: if to the Company: Photran Corporation, 21875 
Grenada Avenue, Lakeville, Minnesota 55044, Attn: Paul Fink, or at any 
other address designated by the Company in writing to Holder; if to 
Holder:  St. James Capital Partners, L.P., c/o St. James Capital 
Corp., 1980 Post Oak Boulevard, Suite 2030, Houston, Texas 

                                       58

<PAGE>

77056, Attn: John L. Thompson, or at any other address designated by Holder 
to the Company in writing.

   G.   SEPARABILITY CLAUSE.  In case any provision in this Note shall 
be invalid, illegal or unenforceable in any jurisdiction, the 
validity, legality and enforceability of the remaining provisions in 
such jurisdiction shall not in any way be affected or impaired 
thereby; provided, however, such construction does not destroy the 
essence of the bargain provided for hereunder.

   H.   GOVERNING LAW.  This Note shall be governed by, and construed 
in accordance with, the internal laws of the State of Minnesota 
(without regard to principles of choice of law).


   I.   USURY.  It is the intention of the parties hereto to conform 
strictly to the applicable laws of the State of Minnesota and the United 
States of America, and judicial or administrative interpretations or 
determinations thereof regarding the contracting for, charging and 
receiving of interest for the use, forbearance, and detention of money 
(referred to as "Applicable Law").  The Holder shall have no right to 
claim, to charge or to receive any interest in excess of the maximum 
non-usurious interest rate permitted by applicable law from time to time 
in effect as such law may be interpreted, amended, revised, supplemented 
or enacted (the "Maximum Rate"), if any, permitted to be charged on that 
portion of the amount representing principal which is outstanding and 
unpaid from time to time by Applicable Law.  Determination of the rate 
of interest for the purpose of determining whether this Note is usurious 
under Applicable Law shall be made by amortizing, prorating, allocating 
and spreading in equal parts during the period of the actual time of 
this Note, all interest or other sums deemed to be interest (referred to 
in this Section as "Interest") at any time contracted for, charged or 
received from the Company in connection with this Note.  Any Interest 
contracted for, charged or received in excess of the Maximum Rate 
allowed by Applicable Law shall be deemed a result of a mathematical 
error and a mistake.  If this Note is paid in part prior to the end of 
the full stated term of this Note and the Interest received for the 
actual period of existence of this Note exceeds the Maximum Rate allowed 
by Applicable Law, Holder shall credit the amount of the excess against 
any amount owing under this Note or, if this Note has been paid in full, 
or in the event that it has been accelerated prior to maturity, Holder 
shall refund to the Company the amount of such excess, and shall not be 
subject to any of the penalties provided by Applicable Law for 
contracting for, charging or receiving Interest in excess of the Maximum 
Rate allowed by Applicable Law.  Any such excess which is unpaid shall 
be canceled.

   J.   TERMINATION.  This Note shall automatically terminate upon (i) 
payment in full by the Company (whether by prepayment or payment on 
the Maturity Date), (ii) conversion of this Note by the holder hereof 
in full or (iii) any combination of prepayment, payment and 
conversion, in each case such that no principal or interest under this 
Note remains outstanding.

                                       59

<PAGE>


   IN WITNESS WHEREOF, the Company has caused this instrument to be 
duly executed on the date first above written.

                                  PHOTRAN CORPORATION

                                  By:     /s/ Paul T. Fink
                                     ------------------------------
                                     Name:      Paul T. Fink
                                     Title:     Chief Executive Officer















                                       60


<PAGE>




                         REQUEST FOR ADVANCE



St. James Capital Partners, L.P.
1980 Post Oak Boulevard, Suite 2030
Houston, Texas 77056
Attn: John L. Thompson



                              ______________ ___, 199_

   In accordance with Article II, Section B of that certain 10% 
Convertible Promissory Note executed by Photran Corporation, a 
Minnesota corporation (the "Company"), in favor of St. James Capital 
Partners, L.P., dated as of February 9, 1998, in the original 
principal amount of $3,500,000 (the "Note"), the Company hereby 
requests an Advance (as defined in the Note) as follows:

   The principal amount of such Advance shall be $__________________.  
The proceeds of such Advance shall be made available to the Company on 
________________, 199_, and such proceeds shall be used for 
________________________________________________________, which is a 
proper use of proceeds under the Note.

   No Default or Event of Default under the Note exists as of the date 
hereof.


                                        PHOTRAN CORPORATION


                                        By:  
                                          ------------------------------
                                        Name:     
                                             ---------------------------
                                        Title:    
                                              --------------------------




                                       61