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                                                                   EXHIBIT 10.18

                               SECURITY AGREEMENT

Terms used (but not defined) herein and defined in the California Uniform
Commercial Code ("UCC") have the meanings ascribed to them in the UCC.

      1. GRANT OF SECURITY INTEREST. For valuable consideration, the undersigned
MICRUS CORPORATION ("Debtor") hereby grants and transfers to WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Bank") a security interest in all of the property of
Debtor described as follows (collectively, the "Collateral"):

      (a) all accounts, deposit accounts, contract rights, chattel paper,
(whether electronic or tangible) instruments, promissory notes, documents,
general intangibles, payment intangibles, software, letter of credit rights,
health-care insurance receivables and other rights to payment of every kind now
existing or at any time hereafter arising;

      (b) all inventory, goods held for sale or lease or to be furnished under
contracts for service, or goods so leased or furnished, raw materials, component
parts, work in process and other materials used or consumed in Debtor's
business, now or at any time hereafter owned or acquired by Debtor, wherever
located, and all products thereof, whether in the possession of Debtor, any
warehousemen, any bailee or any other person, or in process of delivery, and
whether located at Debtor's places of business or elsewhere;

      (c) all warehouse receipts, bills of sale, bills of lading and other
documents of every kind (whether or not negotiable) in which Debtor now has or
at any time hereafter acquires any interest, and all additions and accessions
thereto, whether in the possession or custody of Debtor, any bailee or any other
person for any purpose;

      (d) all money and property heretofore, now or hereafter delivered to or
deposited with Bank or otherwise coming into the possession, custody or control
of Bank (or any agent or bailee of Bank) in any manner or for any purpose
whatsoever during the existence of this Agreement and whether held in a general
or special account or deposit for safekeeping or otherwise;

      (e) all right, title and interest of Debtor under licenses, guaranties,
warranties, management agreements, marketing or sales agreements, escrow
contracts, indemnity agreements, insurance policies, service or maintenance
agreements, supporting obligations and other similar contracts of every kind in
which Debtor now has or at any time hereafter shall have an interest;

      (f) all goods, tools, machinery, furnishings, furniture and other
equipment and fixtures of every kind now existing or hereafter acquired, and all
improvements, replacements, accessions and additions thereto and embedded
software included therein, whether located on any property owned or leased by
Debtor or elsewhere, including without limitation, any of the foregoing now or
at any time hereafter located at or installed on the land or in the improvements
at any of the real property owned or leased by Debtor, and all such goods after
they have been severed and removed from any of said real property; and

      (g) all motor vehicles, trailers, mobile homes, manufactured homes, boats,
other rolling stock and related equipment of every kind now existing or
hereafter acquired and all

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additions and accessories thereto, whether located on any property owned or
leased by Debtor or elsewhere;

together with whatever is receivable or received when any of the foregoing or
the proceeds thereof are sold, leased, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including
without limitation, all rights to payment, including returned premiums, with
respect to any insurance relating to any of the foregoing, and all rights to
payment with respect to any claim or cause of action affecting or relating to
any of the foregoing (collectively, "Proceeds").

      Notwithstanding the foregoing, all rights, priorities and privileges of
Borrower related to intellectual property, whether arising under United States,
multinational, or foreign laws, or otherwise, including patents, copyrights,
inventions, know-how, trademarks, trade secrets and any applications and
licenses of the foregoing, domain names and websites (collectively "Intellectual
Property") and any proceeds and products of any Intellectual Property, including
insurance and indemnity payments and claims for damages shall be deemed not to
constitute Collateral, provided, however, that proceeds of Intellectual
Property, to the extent that such proceeds comprise amounts payable to Debtor by
buyers or lessees of Borrower's inventory (whether characterized as the purchase
price, rental payments, license fees, royalties or otherwise) shall be deemed to
constitute Collateral.

      2. OBLIGATIONS SECURED. The obligations secured hereby are the payment and
performance of: (a) all present and future indebtedness of Debtor to Bank; (b)
all obligations of Debtor and rights of Bank under this Agreement; and (c) all
present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
indebtedness may be or hereafter becomes unenforceable.

      3. TERMINATION. This Agreement will terminate upon the performance of all
obligations of Debtor to Bank, including without limitation, the payment of all
indebtedness of Debtor to Bank, and the termination of all commitments of Bank
to extend credit to Debtor, existing at the time Bank receives written notice
from Debtor or the termination or this Agreement.

      4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.

      5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to Bank
that (a) Debtor's legal name is exactly as set forth on the first page of this
Agreement, and all of Debtor's organizational documents or agreements delivered
to Bank are complete and accurate in every respect; (b) Debtor is the owner and
has possession or control of the Collateral and Proceeds; (c) Debtor has the
exclusive right to grant a security interest in the Collateral and Proceeds; (d)
all Collateral and Proceeds are genuine, free from liens, adverse claims,
setoffs, default, prepayment, defenses and conditions precedent of any kind or
character, except the lien created hereby or as otherwise agreed to by Bank, or
as heretofore

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disclosed by Debtor to Bank, in writing; (e) all statements contained herein are
true and complete in all material respects; (f) no financing statement covering
any of the Collateral or Proceeds, and naming any secured party other than Bank,
Is on file in any public office; (g) to the best of Debtor's knowledge, where
Collateral consists of rights to payment, all persons appearing to be obligated
on the Collateral and Proceeds have authority and capacity to contract and are
bound as they appear to be, all property subject to chattel paper has been
properly registered and filed in compliance with law and to perfect the interest
of Debtor in such property, and all such Collateral and Proceeds comply with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable Federal Reserve Regulation Z and any State
consumer credit laws and (h) where the Collateral consists of equipment, Debtor
is not in the business of selling goods of the kind included within such
Collateral, and Debtor acknowledges that no sale or other disposition of any
such Collateral, including without limitation, any such Collateral which Debtor
may deem to be surplus, has been consented to or acquiesced in by Bank, except
as specifically set forth in writing by Bank.


      6. COVENANTS OF DEBTOR.

      (a) Debtor agrees in general: (i) to pay indebtedness secured hereby when
due; (ii) to indemnify Bank against all losses, claims, demands, liabilities and
expenses of every kind caused by property subject hereto (other than Bank's
gross negligence or willful misconduct); (iii) to pay all costs and expenses,
including reasonable attorneys' fees, incurred by Bank in the perfection and
preservation of the Collateral or Bank's interest therein and/or the
realization, enforcement and exercise of Bank's rights, powers and remedies
hereunder; (iv) to permit Bank to exercise its powers; (v) to execute and
deliver such documents as Bank deems necessary to create, perfect and continue
the security interests contemplated hereby; (vi) not to change its name, and as
applicable, its chief executive office, its principal residence or the
jurisdiction in. which it is organized and/or registered without giving Bank
prior written notice thereof; (vii) not to change the places where Debtor keeps
any Collateral or Debtor's records concerning the Collateral and Proceeds
without giving Bank prior written notice of the address to which Debtor is
moving same; and (viii) to cooperate with Bank in perfecting all security
Interests granted herein and in obtaining such agreements from third parties as
Bank deems necessary, proper or convenient in connection with the preservation,
perfection or enforcement of any of its rights hereunder.

      (b) Debtor agrees with regard to the Collateral and Proceeds, unless Bank
agrees otherwise in writing: (i) that Bank is authorized to file financing
statements in the name of Debtor to perfect Bank's security interest in
Collateral and Proceeds; (ii) where applicable, to insure the Collateral with
Bank named as loss payee, in form, substance and amounts, under agreements,
against risks and liabilities, and with insurance companies satisfactory to
Bank; (iii) where applicable, to operate the Collateral in accordance with all
applicable statutes, rules and regulations relating to the use and control
thereof, and not to use any Collateral for any unlawful purpose or in any way
that would void any insurance required to be carried in connection therewith;
(iv) not to remove the Collateral from Debtor's premises, except (A) for
deliveries to customers in the ordinary course of Debtor's business and (B)
Collateral which consists of mobile goods as defined in the California Uniform
Commercial Code, in which case Debtor agrees not to remove or permit the removal
of such Collateral from its state of domicile for a period in excess of thirty
(30) calendar days; (v) to pay when due all license fees, registration fees and
other charges in connection with any Collateral; (vi) not to permit any lien on
the Collateral or Proceeds, including without limitation, liens arising from
repairs to or storage of the Collateral, except in favor of Bank; (vii) not to
sell, hypothecate or dispose of, nor permit the transfer by operation of law of,
any of the Collateral or Proceeds or any interest therein,

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except sales of inventory to buyers in the ordinary course of Debtor's business
or as otherwise permitted in the Credit Agreement; (viii) to permit Bank to
inspect the Collateral at any time; (ix) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Collateral and Proceeds, and to permit Bank to inspect the same and make copies
thereof at any reasonable time; (x) if requested by Bank during the existence of
an Event of Default, to receive and use reasonable diligence to collect
Collateral consisting of accounts and other rights to payment and Proceeds, in
trust and as the property of Bank, and to immediately endorse as appropriate and
deliver such Collateral and Proceeds to Bank dally in the exact form in which
they are received together with a collection report in form satisfactory to
Bank;(xi) not to commingle Collateral or Proceeds, or collections thereunder,
with other property; (xii) to give only normal allowances and credits and to
advise Bank thereof immediately in writing if they affect any rights to payment
or Proceeds in any material respect; (xiii) from time to time, when requested by
Bank, to prepare and deliver a schedule of all Collateral and Proceeds subject
to this Agreement and to assign in writing and deliver to Bank all accounts,
contracts, leases and other chattel paper, instruments, documents and other
evidences thereof; (xiv) In the event Bank elects to receive payments of rights
to payment or Proceeds hereunder, to pay all expenses incurred by Bank in
connection therewith, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing, recording,
record keeping and expenses incidental thereto; and (xv) to provide any service
and do any other acts which may be necessary to maintain, preserve and protect
all Collateral and, as appropriate and applicable, to keep all Collateral In
good and saleable condition, to deal with the Collateral in accordance with the
standards and practices adhered to generally by users and manufacturers of like
property, and to keep all Collateral and Proceeds free and clear of all
defenses, rights of offset and counterclaims.

      7. POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, when an Event of
Default exists (unless otherwise set forth herein): (a) to perform any
obligation of Debtor hereunder in Debtor's name or otherwise; (b) to give notice
to account debtors or others of Bank's rights in the Collateral and Proceeds, to
enforce or forebear from enforcing the same and make extension and modification
agreements with respect thereto; (c) to release persons liable on Collateral or
Proceeds and to give receipts and acquittances and compromise disputes in
connection therewith; (d) to release or substitute security; (e) to resort to
security in any order; (f) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing statements,
continuation statements, termination statements, statements of assignment,
applications for registration or like papers to perfect, preserve or release
Bank's interest in the Collateral and Proceeds; (g) to receive, open and read
mail addressed to Debtor; (h) to take cash, instruments for the payment of money
and other property to which Bank is entitled; (i) at any time, to verify facts
concerning the Collateral and Proceeds by inquiry of obligors thereon, or
otherwise, in its own name or a fictitious name; (j) to endorse, collect,
deliver and receive payment under instruments for the payment of money
constituting or relating to Proceeds; (k) to prepare, adjust, execute, deliver
and receive payment under insurance claims, and to collect and receive payment
of and endorse any instalment in payment of loss or returned premiums or any
other insurance refund or return, and to apply such amounts received by Bank, at
Bank's sole option, toward repayment of the Indebtedness or, where appropriate,
replacement of the Collateral; (l) to exercise all rights, powers and remedies
which Debtor would have, but for this Agreement, with respect to all Collateral
and Proceeds subject hereto; (m) to enter onto Debtor's premises in Inspecting
the Collateral; (n) to make withdrawals from and to close deposit accounts or
other accounts with any financial institution, wherever located, into which
Proceeds may have been deposited, and to apply funds

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so withdrawn to payment of the Indebtedness; (o) to preserve or release the
interest evidenced by chattel paper to which Bank is entitled hereunder and to
endorse and deliver any evidence of title incidental thereto; and (p) to do all
acts and things and execute all documents in the name of Debtor or otherwise,
deemed by Bank as necessary, proper and convenient in connection with, at any
time, the preservation or perfection, or, when an Event of Default exists,
enforcement of its rights hereunder.

      8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of this Agreement, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.

      9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement (a) any Event of Default
under the Credit Agreement dated as the date hereof, as amended, renewed or
restated from time to time; and (b) Bank, in good faith, believes any or all of
the Collateral and/or Proceeds to be in danger of misuse, dissipation,
commingling, loss, theft, damage or destruction, or otherwise in jeopardy or
unsatisfactory in character or value.

      10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall have
the right to declare immediately due and payable all or any Indebtedness secured
hereby and to terminate any commitments to make loans or otherwise extend credit
to Debtor, Bank shall have all other rights, powers, privileges and remedies
granted to a secured party upon default under the California Uniform Commercial
Code or otherwise provided by law, including without limitation, the right (a)
to contact all persons obligated to Debtor on any Collateral or Proceeds and to
instruct such persons to deliver all Collateral and/or Proceeds directly to
Bank, and (b) to sell, lease, license or otherwise dispose of any or all
Collateral. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power, privilege or remedy hereunder shall affect or operate as a waiver of such
right, power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right,
power, privilege or remedy. Any waiver, permit consent or approval of any kind
by Bank of any default hereunder, or any such waiver of any provisions or
conditions hereof, must be in writing and shall be effective only to the extent
set forth in writing. It is agreed that public or private sales or other
dispositions, for cash or on credit, to a wholesaler or retailer or investor, or
user of property of the types subject to this Agreement, or public auctions, are
all commercially reasonable since differences in the prices generally realized
in the different kinds of dispositions are ordinarily offset by the differences
in the costs and credit risks of such dispositions. While an Event of Default
exists: (a) Debtor will deliver to Bank from time to time, as requested by Bank,
current lists of all Collateral and Proceeds; (b) Debtor will not dispose of any
Collateral or Proceeds except on terms approved by Bank; (c) at Bank's request,
Debtor will assemble and deliver all Collateral and Proceeds, and books and
records pertaining thereto, to Bank at a reasonably convenient place designated
by Bank; and (d) Bank may, without notice to Debtor, enter onto Debtor's
premises and take possession of the Collateral. With respect to any sale or
other disposition by Bank of any Collateral subject to this Agreement, Debtor
hereby expressly grants to Bank the right to sell such Collateral using any or
all of Debtor's trademarks, trade names, trade name rights and/or

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proprietary labels or marks. Debtor further agrees that Bank shall have no
obligation to process or prepare any Collateral for sale or other disposition.

      11. DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF INDEBTEDNESS. In
disposing of Collateral hereunder. Bank may disclaim all warranties of title,
possession, quiet enjoyment and the like. Any proceeds of any disposition of any
Collateral or Proceeds, or any part thereof, may be applied by Bank to the
payment of expenses incurred by Bank in connection with the foregoing, Including
reasonable attorneys' fees, and the balance of such proceeds may be applied by
Bank toward the payment of the indebtedness in such order of application as Bank
may from time to time elect. Upon the transfer of all or any part of the
Indebtedness, Bank may transfer all or any part of the Collateral or Proceeds
and shall be fully discharged thereafter from all liability and responsibility
with respect to any of the foregoing so transferred, and the transferee shall be
vested with all rights and powers of Bank hereunder with respect to any of the
foregoing so transferred; but with respect to any Collateral or Proceeds not so
transferred, Bank shall retain all rights, powers, privileges and remedies
herein given.

      12. STATUTE OF LIMITATIONS. Until all indebtedness shall have been paid in
full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale or other disposition and all other rights, powers,
privileges and remedies granted to Bank hereunder shall continue to exist and
may be exercised by Bank at any time and from time to time irrespective of the
fact that the Indebtedness or any part thereof may have become barred by any
statute of limitations, or that the personal liability of Debtor may have
ceased, unless such liability shall have ceased due to the payment in full of
all Indebtedness secured hereunder.

      13. MISCELLANEOUS. When there is more than one Debtor named herein: (a)
the word "Debtor" shall mean all or any one or more of them as the context
requires; (b) the obligations of each Debtor hereunder are joint and several;
and (c) until all Indebtedness shall have been paid in full, no Debtor shall
have any right of subrogation or contribution, and each Debtor hereby waives any
benefit of or right to participate in any of the Collateral or Proceeds or any
other security now or hereafter held by Bank. Debtor hereby waives any right to
require Bank to (i) proceed against Debtor or any other person, (ii) proceed
against or exhaust any security from Debtor or any other person, (iii) perform
any obligation of Debtor with respect to any Collateral or Proceeds, and (d)
make any presentment or demand, or give any notice of nonpayment or
nonperformance, protest, notice of protest or notice of dishonor hereunder or in
connection with any Collateral or Proceeds. Debtor further waives any right to
direct the application of payments or security for any Indebtedness of Debtor or
Indebtedness of customers of Debtor.

      14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or principal residence, If applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

      15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and

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expenses, including reasonable attorneys' fees (to include outside counsel fees
and all allocated costs of Bank's in-house counsel), expended or incurred by
Bank in exercising any right, power, privilege or remedy conferred by this
Agreement or in the enforcement thereof, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and Including any of
the foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to Debtor or in any way affecting any of
the Collateral or Bank's ability to exercise any of its rights or remedies with
respect thereto. All of the foregoing shall be paid by Debtor with interest from
the date of demand until paid in full at a rate per annum equal to the greater
of ten percent (10%) or Bank's Prime Rate in effect from time to time.

      . 16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

      17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this
Agreement as Debtor hereby expressly agrees that recourse may be had against his
or her separate property for all his or her Indebtedness to Bank secured by the
Collateral and Proceeds under this Agreement

      18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall
be held to be prohibited by or Invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without Invalidating the remainder of such provision or any remaining provisions
of this Agreement

      19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

      Debtor warrants that Debtor is an organization registered under the laws
of the State of Delaware.

      Debtor warrants that Its chief executive office (or principal residence,
if applicable) is located at the following address: 610 PALOMAR AVENUE,
SUNNYVALE, CA 94085.

      Debtor warrants that the Collatoral (except goods in transit) Is located
or domiciled at the following additional addresses: Domestic Hospitals
                                                    ----------------------------

      IN WITNESS WHEREOF, this Agreement has been duly executed as of October
15, 2004

MCRUS CORPORATION

By: /s/ Robert A. Stern
    -------------------

Title: CHIEF FINANCIAL OFFICER

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