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                                                                    Exhibit 10.5

                           Data Critical Corporation
                     19820 North Creek Parkway, Suite 100
                              Bothell, WA  98011


                                 June 21, 2001

Paul Nicholson
12524 Knox
Overland Park, KS

Dear Paul:

     It is my pleasure to offer you the following terms and conditions in
consideration of your continued service as an employee of Data Critical
Corporation (the "Company").  References to "you" and "Executive" mean Paul
Nicholson.

     1.   Position.  Executive's position shall be Vice President, Sales and
Marketing.

     2.   Compensation and Benefits.  Your compensation shall consist of the
following:

          . A monthly salary of $10,537.50 (equating to $126,450 per year),
          subject to customary withholding and adjustment as determined by the
          Compensation Committee of Data Critical's Board of Directors

          . As part of the Company's acquisition of VitalCom, you will be
          entitled to payment of a one time cash bonus in the amount of $50,000
          (subject to customary withholding) upon (and solely upon) the earliest
          to occur of any of the following:  (a) completion of the consolidation
          and move of the Company's corporate operations to Tustin, California,
          (b) a decision by the Company to halt or substantially suspend the
          foregoing consolidation and move, or (c) the termination without cause
          of your employment by the Company prior to the occurrence of either of
          the events described in the foregoing clauses (a) and (b) as a result
          of a Change of Control. The term "Change of Control" shall mean (i) a
          merger, consolidation, amalgamation or other similar transaction with
          an Acquiror whereby the direct or indirect shareholders of the Company
          immediately before such transaction cease to own at least a majority
          of the outstanding capital stock of the Company entitled to vote for
          the directors of such person or entity, or (ii) a sale of all or
          substantially all of the assets of the Company to an Acquiror. An
          "Acquiror" shall mean any person or entity and its Affiliates other
          than the Company that is the successor entity in respect of a Change
          of Control.

          . You will be entitled to an annual performance-based bonus based on
          achievement of personal and Company objectives determined by the
          Company in its sole discretion.

     You will continue to be eligible to participate in our employee benefits
program. The
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Company currently pays all premiums for its employees and their dependents'
medical, dental, vision, prescription drug card coverage and employee assistance
program through group plans. In addition, the Company pays for basic life,
accidental death and dismemberment and long-term disability insurance for its
employees. Pursuant to our current plan, you will continue to be eligible for
these group benefits. All group insurance benefits, including the foregoing, are
subject to change or elimination at any time in the sole discretion of the
Company.

     The Company offers a 401(k) plan to all eligible employees. This is an
employee-contribution-only plan provided as a retirement vehicle and as means of
deferring federal income taxes. You may continue making contributions through
payroll deduction.

     3.   Term of Agreement; At-Will Employment.

          (a)  This letter agreement shall commence on the date a countersigned
     copy of this letter is received by the Company and shall be in effect for a
     period of one year, subject to earlier termination as set forth below (the
     "Original Term").

          (b)  The Company and Executive acknowledge that Executive's employment
     is and shall continue to be at-will, as defined under applicable law, and
     that Executive's employment with the Company may be terminated by either
     party at any time for any or no reason, subject to the terms of this letter
     agreement. If Executive's employment terminates for any reason, Executive
     shall not be entitled to any payments, benefits, damages, award or
     compensation other than as provided in this letter agreement or as
     otherwise required by law. Any payments, benefits, damages, awards, or
     other compensation provided for hereunder upon any termination hereof shall
     be inclusive of (and not additive to) any such amounts required pursuant to
     any applicable law. The rights and duties created by this Section 3 may not
     be modified in any way except by a written agreement executed by or on
     behalf of the Board of Directors of the Company.

     4.   Severance.  In the event that, at any time during the Original Term of
this letter agreement,

          (a)  the Company terminates your employment at any point in time
     without cause, or

          (b)  as a requirement of your continued employment with the Company,
     the Company requires you to permanently relocate and, rather than relocate,
     you elect to voluntarily terminate your employment with the Company,

then in either such case the Company will pay you $11,708 per month (subject to
customary withholding) for a period of six months after such termination in
accordance with the Company's standard payroll procedures. At a minimum, the
Executive will continue to receive the current level of health benefits over the
six-month severance period. For purposes of this letter, "cause" shall mean, the
commission of an act of fraud or dishonesty in the course of your employment
with the Company; conviction of a crime constituting a felony or in respect of
any act of fraud, dishonesty or moral turpitude; failure to perform the duties
assigned to you material to the business conduct of the Company under
circumstances in which you knew or should have reasonably known that such
failure would be detrimental to the Company, unless you remedy such failure not
later than 30 days following delivery to you of a written notice from the
Company describing such failure in reasonable detail.

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     5.   Noncompetition Covenant.  Executive hereby agrees that he shall not,
during the Original Term of this letter of agreement or for a period of six
months after termination of his employment with the Company and/or any of its
affiliates for any reason, whichever shall occur first, do any of the following
without the prior written consent of the Board of Directors of the Company (for
purposes of this Section, the term "Company" shall mean the Company and each of
its subsidiaries):

          (a)  Compete.  Carry on any business or activity (whether directly or
     indirectly, as a partner, stockholder, principal, agent, director,
     affiliate, employee, advisor or consultant) for any company or other
     enterprise carrying on or proposing to carry on any business or having any
     product line related to the business of the Company, including, without
     limitation, wireless devices, products, hardware or software for the
     healthcare industry, remote monitoring of, or transmission of, ECGs or
     other patient medical information, any pacemaker software or hardware
     products or technology, cardiology-related software, physician charting
     products, electronic charge capture or any current or currently planned (at
     the time of Executive's termination) products or businesses by the Company,
     or that are otherwise competitive with the business conducted by or planned
     to be conducted by the Company, nor engage in any other activities that
     conflict with Executive's obligations to the Company (any such company or
     enterprise, being a "Competitor").

          (b)  Solicit Business.  Solicit or influence or attempt to influence
     any client, customer or other person either directly or indirectly, to
     direct his or its purchase of the Company's products and/or services to any
     Competitor.

          (c)  No-Hire.  Solicit or influence or attempt to influence, directly
     or indirectly, any person employed by the Company or any of its affiliates
     to terminate or otherwise cease his employment with the Company or hire any
     such person within six months after such person's leaving the Company's
     employ.

          (d)  Equitable Remedies.  Executive acknowledges and agrees that
     Executive's breach of this letter agreement will cause irreparable injury
     to the Company for which money damages and other remedies at law would be
     inadequate, and as such that the Company and/or its affiliates, in addition
     to any other remedies provided by law, shall be entitled to equitable
     remedies, including, without limitation, specific performance and/or
     temporary or permanent injunctive relief.

          (e)  Scope.  Executive acknowledges and agrees that the Company has
     relied and is relying on the covenants contained herein in their decision
     to enter into this letter agreement and that in light of such reliance the
     covenants contained herein are fair and reasonable.

     6.   Effect on other Agreements.  Executive acknowledges and agrees that
all other agreements executed by Executive with or on behalf of the Company,
including without limitation, any confidentiality agreement and any assignment
of inventions agreement, shall remain in full force and effect without
modification; provided, however that in the event (and solely to the extent) the
terms of this letter agreement and any other such agreement conflict, the terms
of this letter agreement shall be deemed to govern.
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     7.   Miscellaneous Provisions.

          (a)  Amendments and Waivers.  The terms of this letter agreement may
     be amended or waived only with the written consent of the parties.

          (b)  Sole Agreement.  Subject to Section 6 above, this letter
     agreement, including any Exhibits hereto, constitutes the sole agreement of
     the parties and supersedes all oral negotiations and prior writings with
     respect to the subject matter hereof.

          (c)  Notices.  Any notice required or permitted by this letter
     agreement shall be in writing and shall be deemed sufficient upon receipt,
     when delivered personally or by a nationally-recognized delivery service
     (such as Federal Express or UPS), or 48 hours after being deposited in the
     U.S. mail as certified or registered mail with postage prepaid, if such
     notice is addressed to the party to be notified at such party's address as
     set forth below or as subsequently modified by written notice.

          (d)  Choice of Law.  The validity, interpretation, construction and
     performance of this letter agreement shall be governed by the laws of the
     State of Washington, without giving effect to the principles of conflict of
     laws.

          (e)  Severability.  If one or more provisions of this letter agreement
     are held to be unenforceable under applicable law, the parties agree to
     renegotiate such provision in good faith. In the event that the parties
     cannot reach a mutually agreeable and enforceable replacement for such
     provision, then (i) such provision shall be excluded from this letter
     agreement, (ii) the balance of the Agreement shall be interpreted as if
     such provision were so excluded and (iii) the balance of the Agreement
     shall be enforceable in accordance with its terms.

          (f)  Counterparts.  This letter agreement may be executed in
     counterparts, each of which shall be deemed an original, but all of which
     together will constitute one and the same instrument.

          (g)  Arbitration.  Any dispute or claim arising out of or in
     connection with this letter agreement will be finally settled by binding
     arbitration in Seattle, Washington in accordance with the rules of the
     American Arbitration Association by one arbitrator appointed in accordance
     with said rules. Judgment on the award rendered by the arbitrator may be
     entered in any court having jurisdiction thereof. Notwithstanding the
     foregoing, the parties may apply to any court of competent jurisdiction for
     preliminary or interim equitable relief, or to compel arbitration in
     accordance with this paragraph, without breach of this arbitration
     provision.

          (h)  Survival.  The provision of Sections 5, 6 and 7(g) shall survive
     both the termination of this letter agreement and/or the termination of the
     Executive's employment with the Company and/or its affiliates.

          (i)  Advice of Counsel.  EACH PARTY TO THIS LETTER AGREEMENT
     ACKNOWLEDGES THAT, IN EXECUTING THIS LETTER AGREEMENT, SUCH PARTY HAS HAD
     THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS
     READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS LETTER
     AGREEMENT. THIS LETTER AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY
     BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

                           [Signature Page Follows]
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     The parties have executed this letter agreement the date first written
above.


                              DATA CRITICAL CORPORATION:


                              By:        /s/ Michael E. Singer
                                 ---------------------------------------
                              Name:  Michael E. Singer
                              Title: Executive Vice President, Corporate
                                     Development, Chief Financial Officer

                              Address:
                              19820 North Creek Parkway
                              Suite 100
                              Bothell, WA  98011


                              PAUL NICHOLSON


                              Signature:      /s/ Paul Nicholson
                                        --------------------------------
                              Address:

                              12524 Knox
                              Overland Park, KS