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                                                                  Exhibit 10.18

                                     [SEAFIRST BANK LOGO]

BORROWER:  PHYSIO-CONTROL CORPORATION            LENDER:  "LENDER"
           11811 WILLOWS ROAD N.E.                        C/0 CLSC-W
           REDMOND, WA  98052                             800 FIFTH AVE (FAB-13)
                                                          SEATTLE, WA 98104
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THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN PHYSIO-CONTROL 
CORPORATION (REFERRED TO BELOW AS "GRANTOR"); AND "LENDER" (REFERRED TO BELOW 
AS "LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY 
INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER 
SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT TO THE 
COLLATERAL, IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.

DEFINITIONS. The following words shall have the following meanings when used 
in this AGREEMENT. Terms not otherwise defined in this Agreement shall have 
the meanings attributed to such terms in the Uniform Commercial Code. All 
references to dollar amounts shall mean amounts in lawful money of the United 
States of America.

     AGREEMENT. The word "Agreement" means this Commercial Security 
     Agreement, as this Commercial Security Agreement may be amended or 
     modified from time to time, together with all exhibits and schedules 
     attached to this Commercial Security Agreement from time to time.

     GRANTOR. The word "Grantor" means PHYSIO-CONTROL CORPORATION, ITS 
     SUCCESSORS AND ASSIGNS.

     GUARANTOR. The word "Guarantor" means and includes without limitation 
     each and all of the guarantors, sureties, and accommodation parties in 
     connection with the Indebtedness.

     RELATED DOCUMENTS. The words "Related Documents" mean and include 
     without limitation all promissory notes, credit agreements, loan 
     agreements, environmental agreements, guaranties, security agreements, 
     mortgages, deeds of trust, and all other instruments, agreements and 
     documents, whether now or hereafter existing, executed in connection 
     with the Indebtedness.

OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:

     ORGANIZATION. Grantor is a corporation which is duly organized, validly 
     existing, and in good standing under the laws of the State of Delaware.

     AUTHORIZATION. The execution, delivery, and performance of this 
     Agreement by Grantor have been duly authorized by all necessary action 
     by Grantor and do not conflict with, result in a violation of, or 
     constitute a default under (a) any provision of its articles of 
     incorporation or organization, or bylaws, or any agreement or other 
     instrument binding upon Grantor or (b) any law, governmental 
     regulation, court decree, or order to Grantor.

     PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such 
     financing statements and to take whatever other actions are reasonably 
     requested by Lender to perfect and continue Lender's security interest in 
     the Collateral. Upon request of Lender, Grantor will deliver to Lender 
     any and all of the documents evidencing or constituting the Collateral, 
     and Grantor will note Lender's interest upon any and all chattel paper if 
     not delivered to Lender for possession by Lender. Grantor hereby appoints 
     Lender as its irrevocable attorney-in-fact for the purpose of executing 
     any documents necessary to perfect or to continue the security 
     interest granted in this Agreement. Lender may at any time, and without 
     further authorization from Granter, file a carbon, photographic or 
     other reproduction of any financing statement or of this Agreement for 
     use as a financing statement. Grantor will reimburse Lender for all 
     expenses for the perfection and the continuation of the perfection of 
     Lender's security interest in the Collateral. Grantor promptly will 
     notify Lender before any change in Grantor's name including any change 
     to the assumed business names of Grantor. THIS IS A CONTINUING SECURITY 
     AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH ALL OR ANY PART OF 
     THE INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD OF TIME 
     GRANTOR MAY NOT BE INDEBTED TO LENDER.

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                             COMMERCIAL SECURITY AGREEMENT
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     NO VIOLATION. The execution and delivery of this Agreement will not 
     violate any law or agreement governing Grantor or to which Grantor 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, the Collateral is 
     enforceable in accordance with its terms, is genuine, and complies 
     with applicable laws 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.

     LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will 
     deliver to Lender in form satisfactory to Lender a schedule of real 
     properties and Collateral locations relating to Grantor's operations, 
     including without limitation the following: (a) all real property owned 
     or being purchased by Grantor; (b) all real property being rented or 
     leased by Grantor; (c) all storage facilities owned, rented, leased, or
     being used by Grantor; and (d) all other properties where Collateral is 
     or may be located. Except in the ordinary course of its business, 
     Grantor shall not remove the Collateral from its existing locations 
     without the prior written consent of Lender.

     REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the 
     extent the Collateral consists of intangible property such as accounts, 
     the records concerning the Collateral) at Grantor's address shown 
     above, or at such other locations as are acceptable to Lender. Except 
     in the ordinary course of its business, including the sales of 
     inventory, Grantor shall not remove the Collateral from its existing 
     locations without the prior written consent of Lender. 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 Washington, without the prior written consent of Lender.

     TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts 
     collected in the ordinary course of Grantor's business, Grantor shall 
     not sell, offer to sell, or otherwise transfer or dispose of the 
     Collateral. Grantor 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, without the prior written consent of Lender. This 
     includes security interests even if junior in right to the security 
     interests granted under this Agreement. Unless waived by Lender, all 
     proceeds from any disposition of the Collateral (for whatever reason) 
     shall be held in trust for Lender and shall not be commingled with any 
     other funds; provided however, this requirement shall not constitute 
     consent by Lender to any sales or other disposition. Upon receipt, 
     Grantor shall immediately deliver any such proceeds to Lender.

     TITLE. Grantor represents and warrants to Lender that it holds good and 
     marketable title to the Collateral, free and clear of all liens and 
     encumbrances except for the lien of this Agreement. 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 or to which Lender has specifically consented. Grantor shall
     defend Lender's rights in the Collateral against the claims and demands
     of all other persons.

     COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists 
     of inventory, Grantor shall deliver to Lender, as often as Lender shall 
     require, such list, descriptions, and designations of such Collateral as 
     Lender may require to identify the nature, extent, and location of such 
     Collateral. Such information shall be submitted for Grantor and each of 
     its subsidiaries or related companies.

     MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all 
     tangible Collateral in good condition and repair. Grantor will not 
     commit or permit damage to or destruction of the Collateral or any part 
     of the Collateral. Lender and its designated representatives and agents 
     shall have the right at all reasonable times to examine, inspect, and 
     audit the Collateral wherever located. Grantor shall immediately notify 
     Lender of all cases involving the return, rejection, repossession, 
     loss or damage of or to any Collateral involving Collateral exceeding 
     $500,000.00 in the aggregate, of any request for credit or adjustment 
     or of any other dispute arising with respect to the Collateral involving
     Collateral exceeding $500,000.00 in the aggregate, and generally of all
     happenings and events affecting the Collateral or the value or the 
     amount of the Collateral.

     TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes, 
     assessments and liens upon the Collateral, its use or operation, upon 
     this Agreement, upon any promissory note or notes evidencing the 
     Indebtedness, or upon any of the other Related Documents. Grantor may 
     withhold any such payment or may elect to contest any lien if Grantor is 
     in good faith conducting an appropriate proceeding to contest the 
     obligation to pay and so long as Lender's interest in the Collateral is 
     not jeopardized in Lender' sole opinion. If the Collateral is 
     subjected to a lien which is not discharged within (15) days, Grantor 
     shall deposit with Lender cash, a sufficient corporate surety bond or 
     other security satisfactory to Lender in an amount adequate to provide 
     for the discharge of the lien plus any interest, costs, attorneys' fees 
     or other charges that could accrue as a result of foreclosure or sale 
     of the Collateral. In any contest Grantor shall defend itself and Lender 
     and shall satisfy any final adverse judgment before enforcement against 
     the Collateral. Grantor shall name Lender as an additional obligee under 
     any surety bond furnished in the contest proceedings.

     COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly 
     with 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. Grantor may contest 
     in good faith any such law, ordinance or regulation and withhold 
     compliance during any proceeding, including appropriate appeals, so 
     long as Lenders's interest in the Collateral, in Lenders' opinion, is not 
     jeopardized.

     HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral 
     never has been, and never will be so long as this Agreement remains a 
     lien on the Collateral other than in compliance with applicable laws 
     and regulations, used for the generation, manufacture, storage, 
     transportation, treatment, disposal, release or threatened release of 
     any hazardous waste or substance, as those terms are defined in 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 to any of the foregoing. 
     The terms "hazardous waste" and "hazardous substance" shall also 
     include, without limitation, petroleum and petroleum by-products or any 
     fraction thereof and asbestos. The representations and warranties 
     contained herein are based on Grantor's due diligence in investigating 
     the Collateral for hazardous wastes and substances. Grantor hereby (a) 
     releases and waives any future claims against Lender for indemnity or 
     contribution in the event Grantor becomes liable for cleanup or other 
     costs under any such laws, and (b) agrees to indemnify and hold harmless 
     Lender against any and all claims and losses resulting from a breach of 
     this provision of this Agreement. This obligation to indemnify shall 
     survive the payment of the Indebtedness and the satisfaction of this 
     Agreement.

     MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain 
     all risks insurance, including without limitation fire, theft and 
     liability coverage together with such other insurance as Lender may 
     require with respect to the Collateral, in form, amounts, coverages and 
     basis reasonably acceptable to Lender and issued by a company or 
     companies reasonably acceptable to Lender. Grantor, 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 forty five (45) days' prior written notice to Lender 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 Lender will not be impaired in any 
     way by any act, omission or default of Grantor or any other person. In 
     connection with all policies covering assets in which Lender holds or is 
     offered a security interest, Grantor will provide Lender with such loss 
     payable or other endorsements as Lender may require. If Grantor at any 
     time fails to obtain or maintain any insurance as required under this 
     Agreement, Lender may (but shall not be obligated to) obtain such 
     insurance as Lender deems appropriate, including if it so chooses 
     "single interest insurance," which will cover only Lender's interest in the
     Collateral.


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     APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender 
     of any loss or damage to the Collateral exceeding $500,000 in the 
     aggregate. Lender may make proof of loss if Grantor fails to do so 
     within fifteen (15) days of the casualty. All proceeds of any insurance 
     on the Collateral, including accrued proceeds thereon, shall be held by 
     Lender as part of the Collateral. If Lender consents to repair or 
     replacement of the damaged or destroyed Collateral, Lender shall, upon 
     satisfactory proof of expenditure, pay or reimburse Grantor for the 
     proceeds for the reasonable cost of repair or restoration. If Lender 
     does not consent to repair or replacement for the Collateral, Lender shall 
     retain a sufficient amount of the proceeds to pay all of the 
     Indebtedness, and shall pay the balance to Grantor. Any proceeds which 
     have not been disbursed within six (6) months after their receipt and 
     which Grantor has not committed to the repair or restoration of the 
     Collateral shall be used to prepay the Indebtedness.

     INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to 
     Lender reports on each existing policy of insurance showing such 
     information as Lender may reasonably request including the following: 
     (a) the name of the insurer; (b) the risks insured; (c) the amount of 
     the policy; (d) the property insured; (e) the current value on the basis 
     of which insurance has been obtained and the manner of determining that 
     value; and (f) the expiration date of the policy. In addition, Grantor 
     shall upon request by Lender (however not more often than annually) have 
     an independent appraiser satisfactory to Lender determine, as applicable,
     the cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor 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 or the 
Related Documents, provided that Grantor's right to possession and beneficial 
use shall not apply to any Collateral where possession of the Collateral by 
Lender is required by law to perfect Lender's security interest in such 
Collateral. If Lender at any time has possession of any Collateral, whether 
before or after an Event of Default, Lender shall be deemed to have 
exercised reasonable care in the custody and preservation of the Collateral 
if Lender takes such action for the purpose as Grantor shall request or as 
Lender, in Lender's sole discretion, shall deem appropriate under the 
circumstances, but failure to honor any request by Grantor shall not of 
itself be deemed to be a failure to exercise reasonable care. Lender 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.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but 
shall not be obligated to) discharge or pay any amounts required to be 
discharged or paid by Grantor under this Agreement, including without 
limitation all taxes, liens, security interests, encumbrances, and other 
claims, at any time levied or placed on the Collateral. Lender also may (but 
shall not be obligated to) pay all costs for insuring, maintaining and 
preserving the Collateral. All such expenditures incurred or paid by Lender 
for such purposes will then bear interest at the rate charged under the 
Indebtedness from the date incurred or paid by Lender to the date of 
repayment by Grantor. All such expenses shall 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 Indebtedness and be apportioned among and be 
payable with any installment payments to become due during either (i) the 
term of any applicable insurance policy or (ii) the remaining term of the 
Indebtedness or (c) be treated as a balloon payment which will be due and 
payable at the Indebtedness' maturity. This Agreement also will secure 
payment of these amounts. Such right shall be in addition to all other rights 
and remedies to which Lender may be entitled upon the occurrence of an Event 
of Default.

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

     ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness, 
     including any prepayment penalty which Grantor would be required to pay, 
     immediately due and payable.

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

     SELL THE COLLATERAL. Lender shall have full power to sell, lease, 
     transfer, or otherwise deal with the Collateral or proceeds thereof in 
     its own name or that of Grantor. Lender 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, Lender will give Grantor reasonable notice of the time after 
     which any private sale or any other intended disposition of the 
     Collateral is to be made. 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


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     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. To the extent permitted by applicable law, Lender 
     shall have the following rights and remedies regarding the appointment of 
     a receiver: (a) Lender may have a receiver appointed as a matter of 
     right, (b) the receiver may be an employee of Lender and may serve 
     without bond, and (c) all fees of the receiver and his or her attorney 
     shall become 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.

     COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a 
     receiver, may collect the payments, rents, income, and revenues from the 
     Collateral. Lender may at any time in its discretion transfer any 
     Collateral into its own name or that of its nominee and receive the 
     payments, rents, income, and revenue therefrom and hold the same as 
     security for the Indebtedness or apply it to payment of the Indebtedness 
     in such order of preference as Lender may determine. Insofar as the 
     Collateral consists of accounts, general intangibles, insurance 
     policies, instruments, chattel paper, choses in action, or similar 
     property, Lender may demand, collect, receipt for, settle, compromise, 
     adjust, sue for, foreclose, or realize on the Collateral as Lender may 
     determine, whether or not Indebtedness or Collateral is then due. For 
     these purposes, Lender 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, Lender may notify account debtors and obligors on 
     any Collateral to make payments directly to Lender.

     OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the 
     Collateral, Lender may obtain a judgment against Grantor for any 
     deficiency remaining on the Indebtedness due to Lender after 
     application of all amounts received from the exercise of the rights 
     provided in this Agreement. Grantor 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. Lender shall have all the rights and remedies 
     of a secured creditor under the provisions of the Uniform Commercial 
     Code, as may be amended from time to time. In addition, Lender shall 
     have and may exercise any or all other rights and remedies it may have 
     available at law, in equity or otherwise.

     CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether 
     evidenced by this Agreement or the Related Documents or by any other 
     writing, 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 Grantor under this Agreement, 
     after Grantor's failure to perform, shall not affect Lender's right to 
     declare a default and to exercise its remedies. 

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 the is 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.

     APPLICABLE LAW. This Agreement has been delivered to Lender and accepted 
     by Lender in the State of Washington. If there is a lawsuit, Grantor 
     agrees upon Lender's request to submit to the jurisdiction of the courts
     situated in King County, the State of Washington. This Agreement shall 
     be governed by and construed in accordance with the laws of the State of 
     Washington.

     ATTORNEY'S FEES; EXPENSES. Grantor agrees to pay upon demand all of 
     Lender's costs and expense, including reasonable attorneys' fees and 
     Lender's legal expenses, incurred in connection with the enforcement of 
     this Agreement. Lender may pay someone else to help enforce this 
     Agreement, and Grantor shall pay the costs and expense of such 
     enforcement. Costs and expense include Lender's attorneys' fees and 
     legal expense whether or not there is a lawsuit, including attorneys' 
     fees and legal expenses for bankruptcy proceedings (and including efforts 
     to modify or vacate any automatic stay or injunction), appeals, and any 
     anticipated post-judgment collection services. Grantor 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.

     MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under 
     this Agreement shall be joint and several, and all references to Grantor 
     shall mean each and every Grantor. This means that each of the persons 
     signing below is responsible for ALL obligations in this Agreement.

     NOTICES. All notices required to be given under this Agreement shall be 
     given in writing, may be sent by telefacsimile, and shall be effective when
     actually delivered or when deposited with a nationally recognized 
     overnight courier or deposited in the United States mail, first class, 
     postage prepaid, addressed to the party to whom the notice is to be 
     given at the address shown above. Any party may change it 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. To the extent permitted by applicable law, if there 
     is more than one Grantor, notice to any Grantor will constitute notice 
     to all Grantors. For notice purposes, Grantor will keep Lender informed 
     at all times of Grantor's current address(es). Grantor will give Lender 
     prior written notice of any change of either Grantor's legal structure or
     of any change of Grantor's chief executive office, or if Grantor has no 
     place of business, Grantor's residence, and change of records location.

     POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful 
     attorney-in-fact, irrevocably, with full power of substitution to do the 
     following: (a) to demand, collect, receive, receipt for, sue and recover 
     all sums of money or other property which may now or hereafter become 
     due, owing or payable from the Collateral; (b) to execute, sign and 
     endorse any and all claims, instruments, receipts, checks, drafts or 
     warrants issued in payment for the Collateral; (c) to settle or 
     compromise any and all claims arising under the Collateral, and, in the 
     place and stead of Grantor, to execute and deliver its release and 
     settlement for the claim; and (d) to file any claim or claims or to take 
     any action or institute or take part in any proceedings, either in its 
     own name or in the name of Grantor, or otherwise, which in the 
     discretion of Lender may seem to be necessary or advisable. This power 
     is given as security for the Indebtedness, and the authority hereby 
     conferred is and shall be irrevocable and shall remain in full force and 
     effect until renounced by Lender.

     PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted 
     preference claim in Borrower's bankruptcy will become a part of the 
     Indebtedness and, at Lender's option, shall be payable by Borrower as 
     provided above in the "EXPENDITURES BY LENDER" paragraph.

     SEVERABILITY. If a court of competent jurisdication finds any provision of
     this Agreement to be invalid or unenforceable as to any person or 
     circumstance, such finding shall not render that provision invalid or 
     unenforceable as to any other persons or circumstances. If feasible, any 
     such offending provision shall be deemed to be modified to be within the 
     limits of enforceability or validity; however, if the offending 
     provision cannot be so modified, it shall be stricken and all other 
     provisions of this Agreement in all other repsecces shall remain valid 
     and enforceable.

     SUCCESSOR INTERESTS. Subject to the limitations set forth above on 
     transfer of the Collateral, this Agreement shall be binding upon and 
     inure to the benefit of the parties, their successors and assigns.

     WAIVER. 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

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     that provision or any other provision of this Agreement. No prior waiver 
     by Lender, nor any course of dealing between Lender and Grantor, shall 
     constitute a waiver of any of Lender's rights or of 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 of subsequent 
     instances where such consent is required and all cases such consent may 
     be granted or withheld in the sole discretion of Lender.

     WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for 
     the Indebtedness, Borrower irrevocably waivers, disclaims and 
     relinquishes all claims against such other person which Borrower has 
     or would otherwise have by virtue of payment of the Indebtedness or 
     any part thereof, specifically including but not limited to all rights 
     of indemnity, contribution or exoneration.

ADDITIONAL PROVISION. "LENDER" means (a) as to the granting clause of this 
Agreement, Bank of America National Trust and Savings Association, doing 
business as Seafirst Bank ("Seafirst"), as agent for itself and Mellon Bank, 
N.A. ""Mellon"), and means (b) as to all other provisions of this Agreement 
both Bank of America National Trust and Savings Association, doing business 
as Seafirst Bank, and Mellon Bank, N.A., and their respective successors and 
assigns. "INDEBTEDNESS" shall mean all the "Obligations", as such term is 
defined in the Credit Agreement dated as of June 3, 1997 (including all 
amendments thereto and restatements thereof, the "Credit Agreement"), between 
Borrower and Lender, including all renewals, modifications, and extensions 
thereof and all obligations of Grantor under this Agreement. Grantor 
acknowledges and agrees that all rights, powers, and privileges for either 
Seafirst or Mellon, in their respective individual capacities as Banks, 
may be exercised by Seafirst in its capacity as agent for the Banks; and the 
Grantor is neither permitted nor required to inquire as to Seafirst's 
authority to act for the Banks when its it purporting to act in its capacity 
as Agent. This provision does not hinder in any way each Bank's right to 
demand performance in its individual capacity. "COLLATERAL" shall have the 
meaning given to such term in the Credit Agreement. "EVENTS OF DEFAULT" shall 
mean each of the events which constitutes a "Default" under the terms of the 
Credit Agreement.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL 
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS 
DATED JUNE 3, 1997.

GRANTOR:

PHYSIO-CONTROL CORPORATION

By: Richard O. Martin, Chairman & CEO
    ---------------------------------

    J.J. Caffarelli, Exec. V.P./CFO  
    ---------------------------------