<PAGE>

                                                                   EXHIBIT 10.29



                     AMENDED AND RESTATED SECURITY AGREEMENT

DEBTOR:  MICROHELIX, INC.             RGS:    RICHARD G. SASS
         16125 SW 72ND AVENUE                 02000 SW PALATINE HILL ROAD
         TIGARD, OR  97224                    PORTLAND, OR 97219

THIS SECURITY AGREEMENT ("Agreement") dated February 8, 2002, is made and
executed between microHelix, Inc. ("Debtor") and RICHARD G. SASS ("RGS") and
amends and restates, but does not novate, the security agreements contained in
the notes dated December 15, 1999, February 1, 2000, and August 1, 2000, which
are also amended and restated contemporaneously herewith.

GRANT OF SECURITY INTEREST. For valuable consideration, Debtor grants to RGS a
security interest in the Collateral (defined below) to secure the following
indebtedness:

(1)    Amended and Restated Promissory Note dated February 8, 2002, in the
       amount of $160,000.00;

(2)    Amended and Restated Promissory Note dated February 8, 2002, in the
       amount of $456,115.00; and

(3)    Amended and Restated Promissory Note dated February 8, 2002, in the
       amount of $383,885.00

(collectively, the "Notes" and also called the "Indebtedness") and agrees that
RGS shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which RGS may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which Debtor
is hereby giving to RGS a security interest for the payment of the Indebtedness
and performance of all other obligations under the Notes and this Agreement:

         Inventory, Chattel Paper, Accounts, Equipment, Instruments, and General
Intangibles as defined in the Oregon Uniform Commercial Code.

In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

       (A)    All accessions, attachments, accessories, tools, parts, supplies,
              replacements and additions to any of the collateral described
              herein, whether added now or later.

       (B)    All products and produce of any of the property described in this
              Collateral section.

       (C)    All accounts, general intangibles, instruments, rents, monies,
              payments, and all other rights, arising out of a sale, lease, or
              other disposition of any of the property described in this
              Collateral section.

       (D)    All proceeds (including insurance proceeds) from the sale,
              destruction, loss, or other disposition of any of the property
              described in this Collateral section, and sums due from a third
              party who has damaged or destroyed the Collateral or from that
              party's insurer, whether due to judgment, settlement or other
              process.

       (E)    All records and data relating to any of the property described in
              this Collateral section, whether in the form of a writing,
              photograph, microfilm, microfiche, or electronic media, together
              with all of Debtor's right, title, and interest in and to all
              computer software


Page 1 - SECURITY AGREEMENT
<PAGE>

              required to utilize, create, maintain, and process any such
              records or data on electronic media.

DEBTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Debtor represents and promises to RGS that:

         PERFECTION OF SECURITY INTEREST. Debtor agrees to execute financing
         statements and to take whatever other actions are requested by RGS to
         perfect and continue RGS' security interest in the Collateral. Subject
         to the Permitted Encumbrance (defined below under Transactions
         Involving Collateral), upon request of RGS, Debtor will deliver to RGS
         any and all of the documents evidencing or constituting the Collateral,
         and Debtor will note RGS' interest upon any and all chattel paper if
         not delivered to RGS for possession by RGS.

         NOTICES TO RGS. Debtor will promptly notify RGS in writing at RGS'
         address shown above (or such other addresses as RGS may designate from
         time to time) prior to any (1) change in Debtor's name; (2) change in
         Debtor's principal office address; (3) change in Debtor's state of
         organization; or (4) change in any other aspect of Debtor that directly
         or indirectly relates to any agreements between Debtor and RGS. No
         change in Grantor's name or state of organization will take effect
         until after RGS has received notice.

         NO VIOLATION. The execution and delivery of this Agreement will not
         violate any law or agreement governing Debtor or to which Debtor is a
         party, and its certificate or articles of incorporation and bylaws do
         not prohibit any term or condition of this Agreement.

         ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
         accounts, chattel paper, or general intangibles, as defined by the
         Uniform Commercial Code, the Collateral is enforceable in accordance
         with its terms, is genuine, and fully complies with all applicable laws
         and regulations concerning form, content and manner of preparation and
         execution, and all persons appearing to be obligated on the Collateral
         have authority and capacity to contract and are in fact obligated as
         they appear to be on the Collateral. At the time any Account becomes
         subject to a security interest in favor of RGS, the Account shall be a
         good and valid account representing an undisputed, bona fide
         indebtedness incurred by the account debtor, for merchandise held
         subject to delivery instructions or previously shipped or delivered
         pursuant to a contract of sale, or for services previously performed by
         Debtor with or for the account debtor.

         LOCATION OF THE COLLATERAL. Except in the ordinary course of Debtor's
         business, Debtor agrees to keep the Collateral (or to the extent the
         Collateral consists of intangible property such as accounts or general
         intangibles, the records concerning the Collateral) at Debtor's address
         shown above or at such other locations as are acceptable to RGS.

         REMOVAL OF THE COLLATERAL. Except in the ordinary course of Debtor's
         business, including the sales of inventory, Debtor shall not remove the
         Collateral from its existing location without RGS' prior written
         consent. To the extent that the Collateral consists of vehicles, or
         other titled property, Grantor shall not take or permit any action
         which would require application for certificates of title for the
         vehicles outside the State of Oregon, without RGS' prior written
         consent. Grantor shall, whenever requested, advise RGS of the exact
         location of the Collateral.

         TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
         accounts collected in the ordinary course of Debtor's business, or as
         otherwise provided for in this Agreement, Debtor shall not sell, offer
         to sell, or otherwise transfer or dispose of the Collateral. Debtor
         shall not pledge, mortgage, encumber or otherwise permit the Collateral
         to be subject to any lien, security interest, encumbrance, or charge,
         other than the security interest provided for in this Agreement and the
         security interest granted to West Coast Bank on December 21, 2002
         ("Permitted Encumbrance"), without the prior written consent of RGS.
         This includes security interests even if junior in right to the
         security interests granted under this Agreement. Unless waived by RGS,
         all proceeds from any disposition of the Collateral (for whatever
         reason) shall be held in trust for GS and shall not be


Page 2 - SECURITY AGREEMENT
<PAGE>

         commingled with any other funds; provided however, this requirement
         shall not constitute consent by RGS to any sale or other disposition.
         Upon receipt, Grantor shall immediately deliver any such proceeds to
         RGS.

         TITLE. Debtor represents and warrants to RGS that Debtor holds good and
         marketable title to the Collateral, free and clear of all liens and
         encumbrances except for the lien of this Agreement and the Permitted
         Encumbrance. No financing statement covering any of the Collateral is
         on file in any public office other than those which reflect the
         security interest created by this Agreement and the Permitted
         Encumbrance or to which RGS has specifically consented. Debtor shall
         defend RGS' rights in the Collateral against the claims and demands of
         all other persons.

         REPAIRS AND MAINTENANCE. Debtor agrees to keep and maintain, and to
         cause others to keep and maintain, the Collateral in good order, repair
         and condition at all times while this Agreement remains in effect.
         Debtor further agrees to pay when due all claims for work done on, or
         services rendered or material furnished in connection with the
         Collateral so that no lien or encumbrance may ever attach to or be
         filed against the Collateral.

         INSPECTION OF COLLATERAL. RGS and his designated representatives and
         agents shall have the right at all reasonable times to examine and
         inspect the Collateral wherever located.

         TAXES, ASSESSMENTS AND LIENS. Debtor will pay when due all taxes,
         assessments and liens upon the Collateral, its use or operation, upon
         this Agreement, or upon any promissory note or notes evidencing the
         Indebtedness. Debtor may withhold any such payment or may elect to
         contest any lien if Debtor is in good faith conducting an appropriate
         proceeding to contest the obligation to pay and so long as RGS'
         interest in the Collateral is not jeopardized in RGS' sole opinion.

         COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Debtor shall comply promptly
         with all laws, ordinances, rules and regulations of all governmental
         authorities, now or hereafter in effect, applicable to the ownership,
         production, disposition, or use of the Collateral. Debtor may contest
         in good faith any such law, ordinance or regulation and withhold
         compliance during any proceeding, including appropriate appeals, so
         long as RGS' interest in the Collateral, in RGS' opinion, is not
         jeopardized.

         MAINTENANCE OF CASUALTY INSURANCE. Debtor shall procure and maintain
         all risks insurance, including without limitation fire, theft and
         liability coverage together with such other insurance as RGS may
         require with respect to the Collateral, in form, amounts, coverages and
         basis reasonably acceptable to RGS and issued by a company or companies
         reasonably acceptable to RGS and the holder of the Permitted
         Encumbrance. Debtor, upon request of RGS, will deliver to RGS from time
         to time copies of the policies or certificates of insurance in form
         satisfactory to RGS, including stipulations that coverages will not be
         cancelled or diminished without at least ten (10) days' prior written
         notice to RGS and not including any disclaimer of the insurer's
         liability for failure to give such a notice. Each insurance policy also
         shall include an endorsement providing that coverage in favor of RGS
         will not be impaired in any way by any act, omission or default of
         Debtor or any other person. In connection with all policies covering
         assets in which RGS holds or is offered a security interest, Debtor
         will provide RGS with such loss payable or other endorsements as RGS
         may require. If Debtor at any time fails to obtain or maintain any
         insurance as required under this Agreement, RGS may (but shall not be
         obligated to) obtain such insurance as RGS deems appropriate, including
         if RGS so chooses "single interest insurance," which will cover only
         RGS' interest in the Collateral.

         APPLICATION OF INSURANCE PROCEEDS. Debtor shall promptly notify RGS of
         any loss or damage to the Collateral. Subject to the Permitted
         Encumbrance, RGS may make proof of loss if Debtor fails to do so within
         fifteen (15) days of the casualty. Subject to the Permitted
         Encumbrance, all proceeds of any insurance on the Collateral, including
         accrued proceeds thereon, shall be held by RGS as part of the
         Collateral. If RGS consents to repair or replacement of the damaged or
         destroyed Collateral, RGS shall, upon satisfactory proof of
         expenditure, pay or reimburse Debtor


Page 3 - SECURITY AGREEMENT
<PAGE>

         from the proceeds for the reasonable cost of repair or restoration. If
         RGS does not consent to repair or replacement of the Collateral, RGS
         shall retain a sufficient amount of the proceeds to pay all of the
         Indebtedness, and shall pay the balance to Debtor. Subject to the
         Permitted Encumbrance, any proceeds which have not been disbursed
         within six (6) months after their receipt and which Debtor has not
         committed to the repair or restoration of the Collateral shall be used
         to prepay the Indebtedness.

DEBTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts and above in the paragraph
titled "Transactions Involving Collateral," Debtor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement, provided that
Debtor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by RGS is required by law to
perfect RGS' security interest in such Collateral. Until otherwise notified by
RGS, Debtor may collect any of the Collateral consisting of accounts. At any
time and even though no Event of Default exists, RGS may exercise his rights to
collect the accounts and to notify account debtors to make payments directly to
RGS for application to the Indebtedness. If RGS at any time has possession of
any Collateral, whether before or after an Event of Default, RGS shall be deemed
to have exercised reasonable care in the custody and preservation of the
Collateral if RGS takes such action for that purpose as Debtor shall request or
as RGS, shall deem appropriate under the circumstances, but failure to honor any
request by Debtor shall not of itself be deemed to be a failure to exercise
reasonable care. RGS shall not be required to take any steps necessary to
preserve any rights in the Collateral against prior parties, nor to protect,
preserve or maintain any security interest given to secure the Indebtedness.

RGS' EXPENDITURES. If any action or proceeding is commenced that would
materially affect RGS' interest in the Collateral or if Debtor fails to comply
with any provision of this Agreement, including but not limited to Debtor's
failure to discharge or pay when due any amounts Debtor is required to discharge
or pay under this Agreement, RGS on Debtor's behalf may (but shall not be
obligated to) take any action that RGS deems appropriate, including but not
limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Collateral
and paying all costs for insuring, maintaining and preserving the Collateral.
All such expenditures incurred or paid by RGS for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
RGS to the date of repayment by Debtor. All such expenses will become a part of
the Indebtedness and, at RGS' option, will (A) be payable on demand; (B) be
added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement will also secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which RGS may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

         PAYMENT DEFAULT. Debtor fails to make any payment when due under the
         Indebtedness or this Agreement.

         OTHER DEFAULTS. Debtor fails to comply with or to perform any other
         term, obligation, covenant or condition contained in this Agreement or
         the Notes.

         CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Debtor or by any
         governmental agency against any Collateral securing the Indebtedness.
         However, this Event of Default shall not apply if there is a good faith
         dispute by Debtor as to the validity or reasonableness of the claim
         which is the basis of the creditor or forfeiture proceeding and if
         Debtor gives RGS written notice of the creditor or forfeiture
         proceeding and deposits with RGS monies or a surety bond for the
         creditor or forfeiture proceeding, in an amount determined by RGS, in
         his sole discretion, as being an adequate reserve or bond for the
         dispute.


Page 4 - SECURITY AGREEMENT
<PAGE>

         CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Debtor or by any
         governmental agency against any collateral securing the Loan. This
         includes a garnishment of any of Debtor's accounts, including deposit
         accounts, with RGS. However, this Event of Default shall not apply if
         there is a good faith dispute by Debtor as to the validity or
         reasonableness of the claim which is the basis of the creditor or
         forfeiture proceeding and if Debtor gives RGS written notice of the
         creditor or forfeiture proceeding and deposits with RGS monies or a
         surety bond for the creditor or forfeiture proceeding, in an amount
         determined by RGS, in his sole discretion, as being an adequate reserve
         or bond for the dispute.

         CURE PROVISIONS. If any default, other than a default in payment, is
         curable and if Debtor has not been given a notice of a breach of the
         same provision of this Agreement within the preceding twelve (12)
         months, it may be cured (and no event of default will have occurred) if
         Debtor, after receiving written notice from RGS demanding cure of such
         default: (1) cures the default within fifteen (15) days; or (2) if the
         cure requires more than fifteen (15) days, immediately initiates steps
         which RGS deems in his sole discretion to be sufficient to cure the
         default and thereafter continues and completes all reasonable and
         necessary steps sufficient to produce compliance as soon as reasonably
         practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, RGS shall have all the rights of a secured
party under the Oregon Uniform Commercial Code. In addition and without
limitation but subject to the rights of the Permitted Encumbrance holder, if
any, RGS may exercise any one or more of the following rights and remedies:

         ACCELERATE INDEBTEDNESS. RGS may declare the entire Indebtedness
         immediately due and payable, without notice of any kind to Debtor.

         ASSEMBLE COLLATERAL. RGS may require Debtor to deliver to RGS all or
         any portion of the Collateral and any and all certificates of title and
         other documents relating to the Collateral. RGS may require Debtor to
         assemble the Collateral and make it available to RGS at a place to be
         designated by RGS. RGS also shall have full power to enter upon the
         property of Debtor to take possession of and remove the Collateral. If
         the Collateral contains other goods not covered by this Agreement at
         the time of repossession, Debtor agrees RGS may take such other goods,
         provided that RGS makes reasonable efforts to return them to Debtor
         after repossession.

         SELL THE COLLATERAL. RGS shall have full power to sell, lease,
         transfer, or otherwise deal with the Collateral or proceeds thereof in
         RGS' own name or that of Debtor. RGS may sell the Collateral at public
         auction or private sale. Unless the Collateral threatens to decline
         speedily in value or is of a type customarily sold on a recognized
         market, RGS will give Debtor, and other persons as required by law,
         reasonable notice of the time and place of any public sale, or the time
         after which any private sale or any other disposition of the Collateral
         is to be made. However, no notice need be provided to any person who,
         after Default occurs, enters into and authenticates an agreement
         waiving that person's right to notification of sale. The requirements
         of reasonable notice shall be met if such notice is given at least ten
         (10) days before the time of the sale or disposition. All expenses
         relating to the disposition of the Collateral, including without
         limitation the expenses of retaking, holding, insuring, preparing for
         sale and selling the Collateral, shall become a part of the
         Indebtedness secured by this Agreement and shall be payable on demand,
         with interest at the Note rate from date of expenditure until repaid.

         APPOINT RECEIVER. RGS shall have the right to have a receiver appointed
         to take possession of all or any part of the Collateral, with the power
         to protect and preserve the Collateral, to operate the Collateral
         preceding foreclosure or sale, and to collect the proceeds from the
         Collateral and apply the proceeds, over and above the cost of the
         receivership, against the Indebtedness. The receiver may serve without
         bond if permitted by law. RGS' right to the appointment of a receiver
         shall exist whether or not the apparent value of the Collateral exceeds
         the Indebtedness by a substantial amount.


Page 5 - SECURITY AGREEMENT
<PAGE>

         COLLECT REVENUES, APPLY ACCOUNTS. RGS, either himself or through a
         receiver, may collect the payments, rents, income, and revenues from
         the Collateral. RGS may at any time in RGS' discretion transfer any
         Collateral into RGS' own name or that of RGS' nominee and receive the
         payments, rents, income, and revenues therefrom and hold the same as
         security for the Indebtedness or apply it to payment of the
         Indebtedness in such order of preference as RGS may determine. Insofar
         as the Collateral consists of accounts, general intangibles, insurance
         policies, instruments, chattel paper, choses in action, or similar
         property, RGS may demand, collect, receipt for, settle, compromise,
         adjust, sue for, foreclose, or realize on the Collateral as RGS may
         determine, whether or not Indebtedness or Collateral is then due. For
         these purposes, RGS may, on behalf of and in the name of Grantor,
         receive, open and dispose of mail addressed to Grantor; change any
         address to which mail and payments are to be sent; and endorse notes,
         checks, drafts, money orders, documents of title, instruments and items
         pertaining to payment, shipment, or storage of any Collateral. To
         facilitate collection, RGS may notify account debtors and obligors on
         any Collateral to make payments directly to RGS.

         OBTAIN DEFICIENCY. If RGS chooses to sell any or all of the Collateral,
         RGS may obtain a judgment against Debtor for any deficiency remaining
         on the Indebtedness due to RGS after application of all amounts
         received from the exercise of the rights provided in this Agreement.
         Debtor shall be liable for a deficiency even if the transaction
         described in this subsection is a sale of accounts or chattel paper.

         OTHER RIGHTS AND REMEDIES. RGS shall have all the rights and remedies
         of a secured creditor under the provisions of the Oregon Uniform
         Commercial Code, as may be amended from time to time. In addition, RGS
         shall have and may exercise any or all other rights and remedies he may
         have available at law, in equity, or otherwise.

         ELECTION OF REMEDIES. Except as may be prohibited by applicable law,
         all of RGS' rights and remedies, whether evidenced by this Agreement,
         the Notes, or by any other writing, shall be cumulative and may be
         exercised singularly or concurrently. Election by RGS to pursue any
         remedy shall not exclude pursuit of any other remedy, and an election
         to make expenditures or to take action to perform an obligation of
         Debtor under this Agreement, after Debtor's failure to perform, shall
         not affect RGS' right to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

         AMENDMENTS. This Agreement constitutes the entire understanding and
         agreement of the parties as to the matters set forth in this Agreement.
         No alteration of or amendment to this Agreement shall be effective
         unless given in writing and signed by the party or parties sought to be
         charged or bound by the alteration or amendment.

         ARBITRATION. Debtor and RGS agree that all disputes, claims and
         controversies between them whether individual, joint, or class in
         nature, arising from this Agreement or otherwise, including without
         limitation contract and tort disputes, shall be arbitrated pursuant to
         the Rules of the American Arbitration Association in effect at the time
         the claim is filed, upon request of either party. No act to take or
         dispose of any Collateral shall constitute a waiver of this arbitration
         agreement or be prohibited by this arbitration agreement. This
         includes, without limitation, obtaining injunctive relief or a
         temporary restraining order; foreclosure by notice and sale under any
         deed of trust or mortgage; obtaining a writ of attachment or imposition
         of a receiver; or exercising any rights relating to personal property,
         including taking or disposing of such property with or without judicial
         process pursuant to Article 9 of the Oregon Uniform Commercial Code.
         Any disputes, claims, or controversies concerning the lawfulness or
         reasonableness of any act, or exercise of any right, concerning any
         Collateral, including any claim to rescind, reform, or otherwise modify
         any agreement relating to the Collateral, shall also be arbitrated,
         provided however that no arbitrator shall have the right or the power
         to enjoin or restrain any act of any


Page 6 - SECURITY AGREEMENT
<PAGE>

         party. Judgment upon any award rendered by any arbitrator may be
         entered in any court having jurisdiction. Nothing in this Agreement
         shall preclude any party from seeking equitable relief from a court of
         competent jurisdiction. The statute of limitations, estoppel, waiver,
         laches, and similar doctrines which would otherwise be applicable in an
         action brought by a party shall be applicable in any arbitration
         proceeding, and the commencement of an arbitration proceeding shall be
         deemed the commencement of an action for these purposes. The Federal
         Arbitration Act shall apply to the construction, interpretation, and
         enforcement of this arbitration provision.

         ATTORNEYS' FEES; EXPENSES. Debtor agrees to pay upon demand all of RGS'
         costs and expenses, including RGS' attorneys' fees and RGS' legal
         expenses, incurred in connection with the enforcement of this
         Agreement. RGS may hire or pay someone else to help enforce this
         Agreement, and Debtor shall pay the costs and expenses of such
         enforcement. Costs and expenses include RGS' attorneys' fees and legal
         expenses whether or not there is a lawsuit, including attorneys' fees
         and legal expenses for bankruptcy proceedings (including efforts to
         modify or vacate any automatic stay or injunction), appeals, and any
         anticipated post-judgment collection services. Debtor also shall pay
         all court costs and such additional fees as may be directed by the
         court.

         GOVERNING LAW. This Agreement will be governed by, construed and
         enforced in accordance with federal law and the laws of the State of
         Oregon. This Agreement has been accepted by RGS in the State of Oregon.

         PREFERENCE PAYMENTS. Any monies RGS pays because of an asserted
         preference claim in Debtor's bankruptcy will become a part of the
         Indebtedness and, at RGS' option, shall be payable by Debtor as
         provided in this Agreement.

         NO WAIVER BY RGS. RGS shall not be deemed to have waived any rights
         under this Agreement unless such waiver is given in writing and signed
         by RGS. No delay or omission on the part of RGS in exercising any right
         shall operate as a waiver of such right or any other right. A waiver by
         RGS of a provision of this Agreement shall not prejudice or constitute
         a waiver of RGS' right otherwise to demand strict compliance with that
         provision or any other provision of this Agreement. No prior waiver by
         RGS, nor any course of dealing between RGS and Debtor, shall constitute
         a waiver of any of RGS' rights or of any of Debtor's obligations as to
         any future transactions. Whenever the consent of RGS is required under
         this Agreement, the granting of such consent by RGS in any instance
         shall not constitute continuing consent to subsequent instances where
         such consent is required and in all cases such consent may be granted
         or withheld in the sole discretion of RGS.

         NOTICES. Any notice required to be given under this Agreement shall be
         given in writing, and shall be effective when actually delivered, when
         actually received by telefacsimile (unless otherwise required by law),
         when deposited with a nationally recognized overnight courier, or, if
         mailed, when deposited in the United States mail, as first class,
         certified or registered mail postage prepaid, directed to the addresses
         shown near the beginning of this Agreement. Any party may change its
         address for notices under this Agreement by giving formal written
         notice to the other party, specifying that the purpose of the notice is
         to change the party's address. For notice purposes, Debtor agrees to
         keep RGS informed at all times of Debtor's current address. Unless
         otherwise provided or required by law, if there is more than one
         Debtor, any notice given by RGS to any Debtor is deemed to be notice
         given to all Debtors.

         POWER OF ATTORNEY. Grantor hereby appoints RGS as Grantor's irrevocable
         attorney-in-fact for the purpose of executing any documents necessary
         to perfect, amend, or to continue the security interest granted in this
         Agreement or to demand termination of filings of other secured parties.
         RGS may at any time, and without further authorization from Grantor,
         file a carbon, photographic or other reproduction of any financing
         statement or of this Agreement for use as a financing statement.
         Grantor will reimburse RGS for all expenses for the perfection and the
         continuation of the perfection of RGS' security interest in the
         Collateral.


Page 7 - SECURITY AGREEMENT
<PAGE>

         SEVERABILITY. If a court of competent jurisdiction finds any provision
         of this Agreement to be illegal, invalid, or unenforceable as to any
         circumstance, that finding shall not make the offending provision
         illegal, invalid, or unenforceable as to any other circumstances. If
         feasible, the offending provision shall be considered modified so that
         it becomes legal, valid and enforceable. If the offending provision
         cannot be so modified, it shall be considered deleted from this
         Agreement. Unless otherwise required by law, the illegality,
         invalidity, or unenforceability of any provision of this Agreement
         shall not affect the legality, validity or enforceability of any other
         provision of this Agreement.

         SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
         Agreement on transfer of Debtor's interest, this Agreement shall be
         binding upon and inure to the benefit of the parties, their successors
         and assigns. If ownership of the Collateral becomes vested in a person
         other than Debtor, RGS, without notice to Debtor, may deal with
         Debtor's successors with reference to this Agreement and the
         Indebtedness by way of forbearance or extension without releasing
         Debtor from the obligations of this Agreement or liability under the
         Indebtedness.

         SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
         warranties, and agreements made by Debtor in this Agreement shall
         survive the execution and delivery of this Agreement, shall be
         continuing in nature, and shall remain in full force and effect until
         such time as Debtor's Indebtedness shall be paid in full.

         TIME IS OF THE ESSENCE. Time is of the essence in the performance of
         this Agreement.

DEBTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS SECURITY AGREEMENT AND
AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 8, 2002.

Debtor                                         RGS

MicroHelix, Inc.,                              Richard G. Sass
an Oregon corporation


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

Tax Identification Number:  91-1758621





Page 8 - SECURITY AGREEMENT