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                                                                   EXHIBIT 10.31

                            BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
  Principal         Loan Date       Maturity           Loan No        Call/Coll        Account        Officer      Initials
<S>                 <C>             <C>                <C>            <C>              <C>            <C>          <C>
 $750,000.00        12-21-2001      12-30-2004         89000102          3025          307877           076
</TABLE>

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.
      Any item above "***" has been omitted due to text length limitations.

Borrower:    microHelix, Inc.         Lender:    WEST COAST BANK
             16125 SW 72nd Ave                   Portland Metro Business Banking
             Tigard, OR  97224                   1000 SW Broadway, Suite 1100
                                                 Portland, OR  97205

THIS BUSINESS LOAN AGREEMENT dated December 21, 2001, is made and executed
between microHelix, Inc. ("Borrower") and WEST COAST BANK ("Lender") on the
following terms and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or loans or other
financial accommodations, Including those which may be described on any exhibit
or schedule attached to this Agreement ("Loan"). Borrower understands and agrees
that: (A) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements as set forth in this
Agreement, and (B) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.

TERM. This Agreement shall be effective as of December 21, 2001, and shall
continue in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid in full, Including principal, interest, costs,
expenses, attorneys' fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.

      Loan Documents. Borrower shall provide to Lender the following documents
      for the Loan: (1) the Note; (2) Security Agreements granting to Lender
      security interests in the Collateral; (3) financing statements and all
      other documents perfecting Lender's Security interests; (4) evidence of
      insurance as required below; (5) together with all such Related Documents
      as Lender may require for the Loan; all in form and substance satisfactory
      to Lender and Lender's counsel.

      Borrower's Authorization. Borrower shall have provided in form and
      substance satisfactory to Lender properly certified resolutions, duly
      authorizing the execution and delivery of this Agreement, the Note and the
      Related Documents. In addition, Borrower shall have provided such other
      resolutions, authorizations, documents and instruments as Lender or its
      counsel, may require.

      Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
      charges, and other expenses which are then due and payable as specified in
      this Agreement or any Related Document.

      Representations and Warranties. The representations and warranties set
      forth in this Agreement, in the Related Documents, and in any document or
      certificate delivered to Lender under this Agreement are true and correct.

      No Event of Default. There shall not exist at the time of any Advance a
      condition which would constitute an Event of Default under this Agreement
      or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:

      Organization. Borrower is a corporation for profit which is, and at all
      times shall be, duly organized, validly existing, and in good standing
      under and by virtue of the laws of the State of Oregon. Borrower is duly
      authorized to transact business in all other states in which Borrower is
      doing business, having obtained all necessary filings, governmental
      licenses and approvals for each state in which Borrower is doing business.
      Specifically, Borrower is, and at all times shall be, duly qualified as a
      foreign corporation in all states in which the failure to so qualify would
      have a material adverse effect on its business or financial condition.
      Borrower has the full power and authority to own its properties and to
      transact the business in which it is presently engaged or presently
      proposes to engage. Borrower maintains its principal office at 16125 SW
      72nd Ave, Portland, OR 97224. Unless Borrower has designated otherwise in
      writing, this is the prIncipal office at which Borrower keeps its books
      and records Including its records concerning the Collateral. Borrower will
      notify Lender prior to any change in the location of Borrower's state of
      organization or any change in Borrower's name. Borrower shall do all
      things necessary to preserve and to keep in full force and effect its
      existence, rights and privileges, and shall comply with all regulations,
      rules, ordinances, statues, orders and decrees of any governmental or
      quasi governmental authority or court applicable to Borrower and
      Borrower's business activities.

      Assumed Business Names. Borrower has filed or recorded all documents or
      filings required by law relating to all assumed business names used by
      Borrower. Excluding the name of Borrower, the following is a complete list
      of all assumed business names under which Borrower does business: None.

      Authorization. Borrower's execution, delivery, and performance of this
      Agreement and all the Related Documents have been duly authorized by all
      necessary action by Borrower and do not conflict with, result in a
      violation of, or constitute a


<PAGE>

      default under (1) any provision of Borrower's articles of Incorporation or
      organization, or bylaws, or any agreement or other instrument binding upon
      Borrower or (2) any law, governmental regulation, Court decree, or order
      applicable to Borrower or to Borrower's properties.

      Financial information. Each of Borrower's financial statements supplied to
      Lender truly and completely disclosed Borrower's financial condition as of
      the date of the statement, and there has been no material adverse change
      in Borrower's financial condition subsequent to the date of the most
      recent financial statement supplied to Lender. Borrower has no material
      contingent obligations except as disclosed in such financial statements.

      Legal Effect. This Agreement constitutes, and any instrument or agreement
      Borrower is required to give under this Agreement when delivered will
      constitute legal, valid, and binding obligations of Borrower enforceable
      against Borrower in accordance with their respective terms.

      Properties. Except as contemplated by this Agreement or as previously
      disclosed in Borrowers financial statements or in writing to Lender and as
      accepted by Lender, and except for property tax liens for taxes not
      presently due and payable, Borrower owns and has good title to all of
      Borrower's properties free and clear of all Security Interests, and has
      not executed any security documents or financing statements relating to
      such properties. All of Borrowers properties are titled in Borrower's
      legal name, and Borrower has not used or filed a financing statement under
      any other name for at least the last five (5) years.

      Hazardous Substances. Except as disclosed to and acknowledged by Lender in
      writing, Borrower represents and warrants that; (1) During the period of
      Borrower's ownership of Borrower's Collateral, there has been no use,
      generation, manufacture, storage, treatment, disposal, release or
      threatened release of any Hazardous Substance by any person on, under,
      about or from any of the Collateral. (2) Borrower has no knowledge of, or
      reason to believe that there has been (a) any breach or violation of any
      Environmental Laws; (b) any use, generation, manufacture, storage,
      treatment, disposal, release or threatened release of any Hazardous
      Substance on, under, about or from the Collateral by any prior owners or
      occupants of any of the Collateral; or (c) any actual or threatened
      litigation or claims of any kind by any person relating to such matters.
      (3) Neither Borrower nor any tenant, contractor, agent or other authorized
      user of any of the Collateral shall use, generate, manufacture, storage,
      treat, dispose of or release any Hazardous Substance on, under, about or
      from any of the Collateral; and any such activity shall be conducted in
      compliance with all applicable federal, state, and local laws,
      regulations, and ordinances, Including without limitation all
      Environmental Laws. Borrower authorizes Lender and its agents to enter
      upon the Collateral to make such inspections and tests as Lender may deem
      appropriate to determine compliance of the Collateral with this section of
      the Agreement. Any inspections or tests made by Lender shall be at
      Borrower's expense and for Lender's purposes only and shall not be
      construed to create any responsibility or ability on the part of Lender to
      Borrower or to any other person. The representations and warranties
      contained herein are based on Borrower's due diligence in investigating
      the Collateral for hazardous waste and Hazardous Substances. Borrower
      hereby (1) releases and waives any future claims against Lender for
      indemnity or contribution in the event Borrower becomes liable for cleanup
      or other costs under any such laws, and (2) agrees to indemnity and hold
      harmless Lender against any and all claims, losses, liabilities, damages,
      penalties, and expenses which Lender may directly or indirectly sustain or
      suffer resulting from a breach of this section of the Agreement or as a
      consequence of any use, generation, manufacture, storage, disposal,
      release or threatened release of a hazardous waste or substance on the
      Collateral, or as a result of a violation of any Environmental Laws. The
      provisions of this section of the Agreement. Including the obligation to
      indemnify, shall survive the payment of the indebtedness and the
      termination, expiration or satisfaction of this Agreement and Shall not be
      affected by Lender's acquisition of any interest in any of the Collateral,
      whether by foreclosure or otherwise.

      Litigation and Claims. No litigation, claim, investigation, administrative
      proceeding or similar action (Including those for unpaid taxes) against
      Borrower is pending or threatened, and no other event has occurred which
      may materially adversely affect Borrower's financial condition or
      properties, other than litigation, claims, or other events, if any, that
      have been disclosed to and acknowledged by Lender in writing.

      Taxes. To the best of Borrower's knowledge, all of Borrowers tax returns
      and reports that are or were required to be filed, have been filed, and
      all taxes, assessments and other governmental charges have bean paid in
      full, except those presently being or to be contested by Borrower in good
      faith in the ordinary course of business and for which adequate reserves
      have been provided,

      Lien Priority. Unless otherwise previously disclosed to Lender in writing,
      Borrower has not entered into or granted any Security Agreements. or
      permitted the filing or attachment of any Security Interests on or
      affecting any of the Collateral directly or indirectly securing repayment
      of Borrower's Loan and Note, that would be prior or that may in any way be
      superior to Lender's Security interests and rights in and to such
      Collateral.

      Binding Effect. This Agreement, the Note, all Security Agreements (if
      any), and all Related Documents are binding upon the signers thereof, as
      well as upon their successors, representatives and assigns, and are
      legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

      Notices of Claims and Litigation. Promptly inform Lender in writing of (1)
      all material adverse changes in Borrower's financial condition, and (2)
      all existing and all threatened litigation, claims, investigations,
      administrative proceedings or similar actions affecting Borrower or any
      Guarantor which could materially affect the financial condition of
      Borrower or the financial condition of any Guarantor.

      Financial Records. Maintain its books and records in accordance with GAAP,
      applied on a consistent basis, and permit Lender to examine and audit
      Borrowers books and records at all reasonable times.


<PAGE>

      Financial Statements. Furnish Lender with the following:

            Additional Requirements.

            1) Borrower to provide CPA audited financial statements within 120
            days after each fiscal year end.

            2) Borrower to provide Company prepared consolidated, monthly
            financial statements within 30 days after the end of each month.

            3) Borrower to provide tax returns within 15 days of filing date.

All financial reports required to be provided under this Agreement shall be
prepared to accordance with GAAP, applied on a consistent basis, and certified
by Borrower as being true and correct.

Additional information. Furnish such additional information and statements, as
Lender may request from time to time.

Financial Covenants and Ratios. Comply with the following covenants and ratios:

      Other Requirements.

      1) Borrower must maintain a minimum Tangible Net Worth of $7,000,000.
      "Tangible Net Worth" shall be defined as the financial statement Net Worth
      of the Borrower prepared according to generally accepted accounting
      prInciples less intangible assets, plus indebtedness fully subordinated to
      the debt due to the Bank.

      2) Borrower must maintain a Minimum Quick Ratio of 1.25 to 1.00. "Quick
      Ratio" shall be defined as the financial statement Cash and Cash
      Equivalents plus accounts receivable divided by Current Liabilities.

      3) Borrower must maintain a minimum Liquidity Ratio of 2.00 to 1.00.
      "Liquidity" shall be defined as the financial statement Cash and Cash
      Equivalents plus 75% of eligible accounts receivable less any outstandings
      under the Line, divided by total outstandings under the Loan.

      4) The Liquidity covenant may be replaced with a Debt Service covenant of
      1.50 to 1.00 upon Borrower's ability to meet the Debt Service covenant for
      six consecutive months. "Debt Service" shall be defined as Earnings Before
      Interest, Taxes, Depreciation, and Amortization, (EBITDA), divided by
      total interest expense plus Current Portion of Long Term Debt.

      Except as provided above, all computations made to determine compliance
      with the requirements contained in this paragraph shall be made in
      accordance with generally accepted accounting prInciples, applied on a
      consistent basis, and certified by Borrower as being true and correct.

Insurance. Maintain fire and other risk insurance, public liability insurance,
and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender. Borrower, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, Including stipulations that coverages will not be
cancelled or diminished without at least ten (10) days prior written notice to
Lender. Each insurance policy also shall Include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission
or default of Borrower or any other person. In connection with ail policies
covering assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such Lender's loss payable or other
endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, Including without limitation the following: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured; (5) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however not
more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Borrower.

Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations,
unless specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, Including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, Income, or profits, prior to the dale on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any or Borrower's properties, Income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender. Borrower shall
notify Lender immediately in writing of any default in connection with any
agreement.

Operations. Maintain executive and management personnel with substantially the
same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and
management personnel; conduct its business affairs in a reasonable and prudent
manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all
such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.


<PAGE>

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and operations,
and to the use or occupancy of the Collateral, Including without limitation, the
Americans With Disabilities Act. Borrower may contest in good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
Including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion, Lenders
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lender's interest.

Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and
to melee copies and memoranda of Borrower's books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (Including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.

Compliance Certificates, Unless waived in writing by Lender, provide Lender at
least annually, with a certificate executed by Borrowers chief financial
officer, or other officer or person acceptable to Lender, certifying that the
representations and warranties set forth in this Agreement are true and correct
as of the date of the certificate and further certifying that, as of the date of
the certificate, no Event or Default exists under this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all respects with
any and all Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower's part or on the
part of any third party, on properly owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not
there is damage to the environment and/or other natural resources. Assignments,
financing statements, instruments, documents and other agreements as Lender or
its attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, Including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender 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 any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral, All such
expenditures Incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date Incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the indebtedness and, at Lender's 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.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

      Indebtedness and Liens, (1) Except for trade debt Incurred in the normal
      course of business and indebtedness to Lender contemplated by this
      Agreement, create, Incur or assume indebtedness for borrowed money,
      Including capital leases, (2) sell, transfer, mortgage, assign, pledge,
      lease, grant a security interest in, or encumber any of Borrower's assets
      (except as allowed as Permitted Liens), or (3) sell with recourse any of
      Borrowers accounts, except to Lender.

      Continuity of Operations. (1) Engage in any business activities
      substantially different than those in which Borrower is presently engaged,
      (2) cease operations, liquidate, merge, transfer, acquire or consolidate
      with any other entity, change its name, dissolve or transfer or sell
      Collateral out of the ordinary course of business, or (3) pay any
      dividends on Borrower's stock (other than dividends payable in its stock),
      provided, however that notwithstanding the foregoing, but only so long as
      no Event of Default has occurred and is continuing or would result from
      the payment of dividends, if Borrower is a "Subchapter S Corporation" (as
      defined in the internal Revenue Code of 1986, as amended), Borrower may
      pay cash dividends on its stock to its shareholders from time to time in
      amounts necessary to enable the shareholders to pay Income taxes and make
      estimated Income tax payments to satisfy their liabilities under federal
      and state law which arise solely from their status as Shareholders of a
      Subchapter S Corporation because of their ownership of shares of
      Borrower's stock, or purchase or retire any of Borrower's outstanding
      shares or alter or amend Borrower's capital structure.

      Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money
      or assets, (2) purchase, create or acquire any interest in any other
      enterprise or entity, or (3) Incur any obligation as surety or guarantor
      other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if,
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
Incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or( otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.


<PAGE>

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This Includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not Include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.

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

      Payment Default. Borrower falls to make any payment when due under the
      Loan.

      Other Defaults, Borrower fails to comply with or to perform any other
      term, obligation, covenant or condition contained in this Agreement or in
      any of the Related Documents or to comply with or to perform any term,
      obligation, covenant or condition contained in any other agreement between
      Lender and Borrower.

      False Statements. Any warranty, representation or statement made or
      furnished to Lender by Borrower or on Borrower's behalf under this
      Agreement or the Related Documents is false or misleading in any material
      respect, either now or at the time made or furnished or becomes false or
      misleading at any time thereafter,

      Insolvency. The dissolution or termination of Borrower's existence as a
      going business, the insolvency of Borrower, the appointment of a receiver
      for any part of Borrower's property, any assignment for the benefit of
      creditors, any type of creditor workout, or the commencement of any
      proceeding under any bankruptcy or insolvency laws by or against Borrower.

      Defective Collateralization. This Agreement or any of the Related
      Documents ceases to be in full force and effect (Including failure of any
      collateral document to create a valid and perfected security interest or
      lien) at any time and for any reason.

      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 Borrower or by any
      governmental agency against any collateral securing the Loan, This
      Includes a garnishment of any of Borrower's accounts, Including deposit
      accounts, with Lender. However, this Event of Default shall not apply if
      there is a good faith dispute by Borrower as to the validity or
      reasonableness of the claim which is the basis of the creditor or
      forfeiture proceeding and it Borrower gives Lender written notice of the
      creditor or forfeiture proceeding and deposits with Lender monies or a
      surety bond for the creditor or forfeiture proceeding, in an amount
      determined by Lender, in its safe discretion, as being an adequate reserve
      or bond for the dispute.

      Events Affecting Guarantor. Any of the preceding events occurs with
      respect to any Guarantor of any of the indebtedness or any Guarantor dies
      or becomes Incompetent, or revokes or disputes the validity of, or
      liability under, any Guaranty of the indebtedness. In the event of a
      death, Lender, at its option, may, but shall not be required to, permit
      the Guarantor's estate to assume unconditionally the obligations arising
      under the guaranty in a manner satisfactory to Lender, and, in doing so,
      cure any Event of Default.

      Adverse Change. A material adverse change occurs in Borrower's financial
      condition, or Lender believes the prospect of payment or performance of
      the Loan is impaired.

      Insecurity. Lender in good faith believes itself insecure.

      Right to Cure. If any default, other than a default on indebtedness. Is
      curable and if Borrower or Grantor, as the case may be, has not been given
      a notice of a similar default within the preceding twelve (12) months, it
      may be cured (and no Event of Default will have occurred) if Borrower Or
      Grantor, as the case may be, after receiving written notice from Lender
      demanding cure of such default. (1) cure the default within fifteen (15)
      days; or (2) it the cure requires more than fifteen (15) days, immediately
      initiate steps which Lender dooms in Lender's sole discretion to be
      sufficient to cure the default and thereafter continue and complete all
      reasonable and necessary steps sufficient to produce compliance as soon as
      reasonably practical,

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (Including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender 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 Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

CHOICE OF VENUE. If there is a lawsuit, you (borrower) agree upon our request to
submit to the jurisdiction of the courts of the State of Oregon in Multnomah
County, and that venue is proper in such courts.

SUBORDINATED DEBT. Richard G. Sass to formally subordinate to Bank shareholder
loans between the Borrower and Richard G Sass in the original amounts of
$383,855, $160,000 and $675,000 dated December 15, 1999, February 1, 2000 and
August 1, 2000 respectively. Current balance of $1,000,830 to be subordinated.


<PAGE>

BORROWING FORMULA. Loan: Full amount of credit facility shall be made available
to Borrower at the close of definitive Bank loan documentation.

ADDITIONAL COVENANTS.

1) Borrower's primary banking accounts to be maintained at Bank,

2) Without Bank's prior approval, which shall not be unreasonably withheld,
Borrower shall not:

      a) Enter into any mergers or acquisitions or major debt agreements.

      b) Repurchase stock or pay cash dividends except as required to cover
      personal tax liabilities of shareholders.

      c) Hypothecate assets.

      d) Loan money or guarantee loans of others.

3) Borrower shall notify Bank in writing of any legal action commenced against
it that may result in damages over $50,000. Borrower shall provide Bank with
such notice immediately upon Borrower's receipt of notice of such legal action.

4) Borrower shall provide Bank proof of insurance on all tangible corporate
assets and a Lender's Loss Payable Clause with Bank listed as loss payee. 5) All
reasonable expenses of Bank for legal fees, documentation fees, UCC searches and
filing fees, and all other costs involved with documenting shall be borne by the
Borrower whether or not the Credit Facilities close.

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

      Amendments. This Agreement, together with any Related Documents,
      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. Borrower and Lender 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;
      foreclosing 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 4 of
      the 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 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. Borrower agrees to pay upon demand all of
      Lender's costs and expenses, Including Lender's attorneys' fees and
      Lender's legal expenses, Incurred in connection with the enforcement of
      this Agreement. Lender may hire or pay someone else to help enforce this
      Agreement, and Borrower shall pay the costs and expenses of such
      enforcement. Costs and expenses Include Lender's 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. Borrower also shall pay all court costs
      and such additional fees as may be directed by the court.

      Caption Headings. Caption headings in this Agreement are for convenience
      purposes only and are not to be used to interpret or define the provisions
      of this Agreement.

      Consent to Loan Participation. Borrower agrees and consents to Lender's
      sale or transfer, whether now or later, of one or more participation
      interests in the Loan to one or more purchasers, whether related or
      unrelated to Lender. Lender may provide, without any limitation
      whatsoever, to any one or more purchasers, or potential purchasers, any
      information or knowledge Lender may have about Borrower or about any other
      matter relating to the Loan. and Borrower hereby waives any rights' to
      privacy Borrower may have with respect to such matters. Borrower
      additionally waives any and all notices of sale of participation
      interests, as well as all notices of any repurchase of such participation
      interests. Borrower also agrees that the purchasers of any such
      participation interests will be considered as the absolute owners of such
      interests in the Loan and will have all the rights granted under the
      participation agreement or agreements governing the sale of such
      participation interests. Borrower further waives all rights of offset or
      counterclaim that it may have now or later against under or against any
      purchaser of such a participation interest and unconditionally agrees that
      either Lender or such purchaser may enforce Borrowers obligation under the
      Loan irrespective of the failure or insolvency of any holder of any
      interest in the Loan. Borrower further agrees that the purchaser of any
      such participation interests may enforce its interests irrespective of any
      personal Claims or defenses that Borrower may have against Lender.

      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 Lender in the State of Oregon.

      No Waiver by Lender. Lender shall not be deemed to have waived any rights
      under this Agreement unless such waiver is given in writing and signed by
      Lender. No delay or omission on the part of Lender in exercising any right
      shall operate as a waiver of such right or any other right. A waiver by
      Lender of a provision of this Agreement shall not prejudice or constitute
      a waiver of Lender's right otherwise to demand strict compliance with that
      provision or any other provision of this Agreement. No prior waiver by
      Lender, nor any course of dealing between Lender and Borrower, or between
      Lender


<PAGE>
      and any Grantor, shall constitute a waiver of any of Lender's rights or of
      any of Borrower's or any Grantor's obligations as to any future
      transactions. Whenever the consent of Lender is required under this
      Agreement, the granting of such consent by Lender 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 Lender.

      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 parties. specifying that the purpose of the notice is to
      change the party's address. For notice purposes, Borrower agrees to keep
      Lender informed at all times of Borrower's current address. Unless
      otherwise provided or required by law, if there is more than one Borrower,
      any notice given by Lender to any Borrower is deemed to be notice given to
      all Borrowers.

      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 circumstance. 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.

      Subsidiaries and Affiliates of Borrower. To the extent the context of any
      provisions of this Agreement makes it appropriate, Including without
      limitation any representation, warranty or covenant, the word "Borrower"
      as used in this Agreement shall Include all of Borrower's subsidiaries and
      affiliates. Notwithstanding the foregoing however, under no circumstances
      shall this Agreement be construed to require Lender to make any Loan or
      other financial accommodation to any of Borrower's subsidiaries or
      affiliates.

      Successors and Assigns. All covenants and agreements contained by or on
      behalf of Borrower shall bind Borrower's successors and assigns and shall
      inure to the benefit of Lender and its successors and assigns. Borrower
      shall not, however, have the right to assign Borrowers rights under this
      Agreement or any interest therein, without the prior written consent of
      Lender.

      Survival of Representations and Warranties. Borrower understands and
      agrees that in making the Loan, Lender is relying on all representations,
      warranties, and covenants made by Borrower in this Agreement or in any
      certificate or other instrument delivered by borrower to Lender under this
      Agreement or the Related Documents. Borrower further agrees that
      regardless of any investigation made by Lender, all such representations,
      warranties and covenants will survive the making of the Loan and delivery
      to Lender of the Related Documents, shall be continuing in nature, and
      shall remain in full force and effect until such time as Borrower's
      indebtedness shall be paid in full, or until this Agreement shall be
      terminated in the manner provided above, whichever is the last to occur.

      Time is of the Essence. Time is of the essence in the performance of this
      Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall Include
the plural, and the plural shall Include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:

      Advance. The Word "Advance" means a disbursement of Loan funds made, or to
      be made, to Borrower or on Borrower's behalf on a line of credit or
      multiple advance basis under the terms and conditions of this Agreement.

      Borrower. The word "Borrower" means microHelix, Inc., and all other
      persons and entities signing the Note in whatever capacity.

      Collateral. The word "Collateral" means all property and assets granted as
      collateral security for a Loan, whether real or personal property, whether
      granted directly or indirectly, whether granted now or in the future, and
      whether granted in the form of a security interest, mortgage, collateral
      mortgage, deed of trust, assignment, pledge, crop pledge, chattel
      mortgage, collateral chattel mortgage, chattel trust, factor's lien,
      equipment trust, conditional sale, trust receipt, lien, charge, lien or
      title retention contract, lease or consignment intended as a security
      device, or any other security or lien interest whatsoever, whether created
      by law, contract, or otherwise.

      Environmental Laws. The Words "Environmental Laws" mean any and all state,
      federal and local statutes, regulations and ordinances relating to the
      protection of human health or the environment, Including without
      limitation the Comprehensive Environmental Response, Compensation, and
      Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
      ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
      L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
      U.S.C. Section 1801, et. seq., the Resource Conservation and Recovery Act,
      42 U.S.C. Section 6901, et. seq., or other applicable state or federal
      laws, rules, or regulations adopted pursuant thereto or intended to
      protect human health or the environment.

      Event of Default. The words "Event of Default" mean any of the events of
      default set forth in this Agreement in the default section of this
      Agreement.

      GAAP. The word "GAAP" means generally accepted accounting principles


<PAGE>

      Grantor. The word "Grantor" means each and all of the persons or entities
      granting a Security interest in any Collateral for the Loan, Including
      without limitation all Borrowers granting such a Security Interest,

      Guarantor. The word "Guarantor" means any guarantor, surety, or
      accommodation party of any or all of the Loan.

      Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
      Including without limitation a guaranty of all or part of the Note.

      Hazardous Substances. The Words "Hazardous Substances" mean materials
      that, because of their quantity, concentration or physical, chemical or
      infectious characteristics, may cause or pose a present or potential
      hazard to human health or the environment when improperly used, treated,
      stored, disposed of, generated, manufactured, transported or otherwise
      handled, The words "Hazardous Substances" are used in their very broadest
      sense and Include without limitation any and all hazardous or toxic
      substances, materials or waste as defined by or listed under the
      Environmental Laws. The term "Hazardous Substances" also Includes, without
      limitation, petroleum and petroleum by-products or any fraction thereof
      and asbestos.

      Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
      the Note or Related Documents, Including all principal and interest
      together with all other indebtedness and costs and expenses for which
      Borrower is responsible under this Agreement or under any of the Related
      Documents.

      Lender. The word "Lender" means WEST COAST BANK, its successors and
      assigns.

      Loan. The word "Loan" means any and all loans and financial accommodations
      from Lender to Borrower whether now or hereafter existing, and however
      evidenced, Including without limitation those loans and financial
      accommodations described herein or described an any exhibit or schedule
      attached to this Agreement from time to time.

      Note. The word "Note" means the Note executed by microHelix, Inc. In the
      principal amount of $750,000.00 dated December 21, 2001, together with all
      renewals of, extensions of, modifications of, refinancings of,
      consolidations of, and substitutions for the note or credit agreement.

      Permitted Liens, The words "Permitted Liens" mean (1) liens and security
      interests securing indebtedness owed by Borrower to Lender; (2) liens for
      taxes, assessments, or similar charges either not yet due or being
      contested in good faith; (3) liens of materialmen, mechanics,
      warehousemen, or carriers, or other like liens arising in the ordinary
      course of business and securing obligations which are not yet delinquent;
      (4) purchase money liens or purchase money security interests upon or in
      any properly acquired or held by Borrower in the ordinary course of
      business to secure indebtedness outstanding on the date of this Agreement
      or permitted to be Incurred under the paragraph of this Agreement titled
      "Indebtedness and Liens"; (5) liens and security interests which, as of
      the date of this Agreement, have been disclosed to and approved by the
      Lender in writing; and (6) those liens and security interests which in the
      aggregate constitute an immaterial and insignificant monetary amount with
      respect to the net value of Borrower's assets.

      Related Documents. The words "Related Documents" mean all promissory
      notes, credit agreements, loan agreements, environmental agreements,
      guaranties, security agreements, mortgages, deeds of trust, security
      deeds, collateral mortgages, and all other instruments, agreements and
      documents, whether now or hereafter existing, executed in connection with
      the Loan.

      Security Agreement. The words "Security Agreement" mean and Include
      without limitation any agreements, promises, covenants, arrangements,
      understandings or other agreements, whether created by law, contract, or
      otherwise, evidencing, governing, representing, or creating a Security
      Interest.

      Security Interest. The words "Security Interest" mean, without limitation,
      any and all types of collateral security, present and future, whether in
      the form of a lien, charge, encumbrance, mortgage, deed of trust, security
      deed, assignment, pledge, crop pledge, chattel mortgage, collateral
      chattel mortgage, chattel trust, factor's lien, equipment trust,
      conditional sale, trust receipt, lien or title retention contract, lease
      or consignment intended as a security device, or any other security or
      lien interest whatsoever whether created by law, contract, or otherwise.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED DECEMBER 21, 2001.

BORROWER.

MICROHELIX, INC.


<TABLE>
<S>                                                    <C>
By:         /s/                                        By:         /s/
   ----------------------------------------------         ---------------------------------------------
   Richard G. Sass, President of microHelix, Inc.         Jane K. Conner, Treasurer of microHelix, Inc.
</TABLE>

LENDER:


WEST COAST BANK


By:         /s/
   -----------------------------
        Authorized Signer