EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (THE "Agreement") is made as of June 26, 2001, by
and between CRITICARE SYSTEMS, INC., a Delaware corporation (the "Company"), and
EMIL  H.  SOIKA  ("Employee").

                                    RECITALS

     A.   Employee  is  currently  employed  by the Company as its President and
          CEO.

     B.   The  Company desires to make certain agreements with Employee in order
          to  induce  Employee  to  remain  in  such  employ and in exchange for
          Employee's  covenants  herein.

     C.   The  parties desire to evidence their agreement as to the terms of the
          Company's  employment  of  Employee.

                                    AGREEMENT

In  consideration  of  the  foregoing  recitals  and  mutual covenants contained
herein,  the  parties  hereby  agree  as  follows:

     1.   Employment. The Company hereby continues its employment of Employee as
          the  Company's  President  and  CEO,  and Employee hereby accepts such
          employment.  Subject  to  the  provisions  of  this  agreement.

     2.   Duties  and  authority.  Employee  shall  be employed as the Company's
          President  and  CEO.  Employee shall have such duties and authority as
          are customary for the President and CEO of a publicly-held corporation
          with  similar  authority  as the Company's Board of Directors may from
          time  to time reasonably assign Employee consistent with the foregoing
          and  the other provisions of this Agreement. Employee agrees to devote
          his  entire  business  time,  energy  and  skills  to such employment.

     3.   Compensation and Benefits. Employee shall be entitled to the following
          compensation  and  benefits  for  services  rendered  to  the Company:

          (a)  Compensation.  Employee  shall  receive  an annual base salary of
               $180,000  payable in equal installments twice a month. Employee's
               base  salary  shall  be reviewed annually within 30 days prior to
               the  end  of  each  fiscal  year.

          (b)  Bonus  Plan.  Employee  shall  be  eligible  to  receive  a bonus
               annually,  based  on  Employee's  and  the  Company's  financial
               performance,  in  the  discretion  of  the  Board  of  Directors.


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          (c)  Expense  Reimbursements. The Company shall reimburse Employee for
               actual  out-of-pocket-costs  incurred  for  reasonable  business
               expenses,  other  than  automobile expenses (which are covered in
               Section  3(d)  in  accordance with the policies and procedures of
               the  Company  in  effect  from  time  to  time).

          (d)  Automobile Allowance. Employee shall receive a Company car or car
               allowance subject to Company policies in effect from time to time
               with  respect  to  reimbursement  for  personal  use.

          (e)  Vacations.  Employee  shall  be entitled to paid vacations of not
               more  than  four  weeks each calendar year, which may be taken in
               Employee's  discretion;  provided,  however,  that  such vacation
               shall not unreasonably interfere with the Company's needs at such
               time.  Unused  vacation  time  for  a  calendar year shall not be
               carried  over  from  one  year  to  the  next.

          (f)  Health  Insurance.  Employee  shall  be entitled to family health
               insurance  coverage  under  the  Company's  group  plan  on  a
               premium-sharing  basis  then  in  effect.

          (g)  Disability  Insurance.  Employee shall be entitled to participate
               in the Company's group life insurance and disability insurance in
               effect  from  time  to  time.

          (h)  Severance  Pay.

               (i)  This  agreement may be terminated by the Company at any time
                    for  Cause (hereinafter defined), and in such event Employee
                    shall  not  be entitled to receive any further compensation.
                    For  purposes of this Agreement, the term "Cause" shall mean
                    acts  of  fraud, repeated material misconduct or intentional
                    dishonesty  by  Employee  in  the  course  of  Employee's
                    employment  with the Company, or the commission of a felony.

               (ii) In the event that Employee voluntarily terminates Employee's
                    employment by the Company, Employee shall not be entitled to
                    receive any further compensation; provided, however, that if
                    such voluntary termination occurs at any time after a change
                    of  control  (as  hereinafter  defined),  Employee  shall be
                    entitled  to  receive  severance  benefits  for  a period of
                    thirty  months  after the date of termination, consisting of
                    the  following:

                    A.   Employee's  base  salary,

                    B.   The  amount  which  the  Company  pays for group health
                         insurance  benefits  with  respect to such Employee and
                         his  family  and the continuation of Employee's Company
                         provided  life  insurance  or  equivalent  coverage,

                    C.   Transfer ownership of the company car free and clear to
                         the  Employee  at  the  end of the lease period and the
                         company  paying  the  residual.

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<PAGE>

                    D.   The  payment  of  Employee's  real  estate  broker's
                         commissions  (not  to  exceed  6%  of  the sales price)
                         arising from the sale of Employee's Wisconsin residence
                         and  of  Employee's professional packing and moving van
                         expenses  associated  with  Employee's  moving from his
                         Wisconsin  residence  to  any  location  within  the
                         continental  United  States  of  America.

               (iii) Notwithstanding anything to the contrary herein, Employee's
                    employment  hereunder  may  be  terminated  by  the  Company
                    without Cause at any time either prior to or after a "Change
                    in  Control"  (as  hereinafter  defined),  however,  in such
                    event,  Company  shall  pay  Employee for a period of thirty
                    months  after  the date of termination as severance benefits
                    consisting  of  the  following:

                    A.   Employee's  base  salary,

                    B.   The  amount  which  the  Company  pays for group health
                         insurance  benefits  with  respect to such Employee and
                         his  family  and the continuation of Employee's Company
                         provided  life  insurance  or  equivalent  coverage,

                    C.   Transfer ownership of the company car free and clear to
                         the  Employee  at  the  end of the lease period and the
                         company  paying  the  residual.

                    D.   The  payment  of  Employee's  real  estate  broker's
                         commissions  (not  to  exceed  6%  of  the sales price)
                         arising from the sale of Employee's Wisconsin residence
                         and  of  Employee's professional packing and moving van
                         expenses  associated  with  Employee's  moving from his
                         Wisconsin  residence  to  any  location  within  the
                         continental  United  States  of  America.

A termination without cause shall be deemed to have occurred if Company, without
Employee's  consent,  materially  reduces  Employee's  responsibilities, reduces
Employee's salary or requires Employee to relocate or transfer to a site further
than  thirty  miles  from  Employee's  current  place  of  employment.

     The  term  "Change in Control" shall mean a sale, assignment or exchange of
more than 51% of the voting stock outstanding immediately after such sale or the
sale,  assignment or exchange of substantially all of the assets of the company.
The  date  of  the  Change  of  Control shall mean the date upon which a sale is
closed, or in a series of transactions, the date upon which beneficial ownership
of  the  voting  stock  or  assets  is  transferred.

     All  amounts  payable  to  Employee  under  this Section 3 shall be paid in
normal  payroll  installments  on  normal  payroll  dates  less  all-applicable
withholding.  Except  as  otherwise  provided  in  this  Section  3,  as  of the
effective  dare  of  termination, all obligations of the Company to pay Employee
compensation shall terminate and the Company shall have no further obligation to
Employee  after  date  of  termination.


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<PAGE>
     4.   Options.

          (i)  Employee  shall  be entitled to receive stock options exercisable
               for  four  hundred thousand shares of common stock of the company
               according  to  a  vesting  schedule consistent with the companies
               stock  option  program.

          (ii) In the event employee is terminated without Cause or in the event
               of  a Change in Control of the Company as those terms are defined
               in  the  Agreement,  stock  options held by Employee shall become
               immediately  exercisable  without  regard  to  vesting  and/or
               applicable benchmarks unless the agreement governing the exercise
               of such options contains provisions expressly to the contrary. In
               the event of a sale or an exchange of assets or stock anticipated
               to  constitute  a  Change  of Control, the Company agrees that it
               shall make provisions for the conversion or exchange of shares to
               be  received  upon  the  exercise  of  such  options  for  the
               consideration  to  be  received  by  stockholders  of the Company
               generally;  provided,  however,  that Employee may be required to
               provide  to  the  Company  an  irrevocable  notice  of exercise a
               reasonable  period  of  time  prior to the actual closing date to
               facilitate  such  exchange.

     5.   Confidentiality.  Employee  covenants  that he shall at all times keep
          confidential  the  Company's  financial statements and other financial
          information,  except  to  the  extent  (a)  disclosure  of  financial
          information  (but  not  financial  statements)  is  incidental  to the
          performance  of his duties for the Company, (b) disclosure is required
          by  applicable law, or (c) the Company's Board of Directors authorizes
          disclosure.

     6.   Restrictive  Covenant.

          (a)  As  used  in  this  Section  6,  the following definitions apply:

          "Products"  mean  vital  signs  medical monitoring equipment primarily
          marketed  for  use  in hospital and alternate care medical facilities.

          "Protected  territory"  means  the  United  States  of  America.

               (i)  Important and essential assets of the Company's business are
                    the  identity of the Company's customers for its Products in
                    the Protected Territory and the identity of relationships in
                    its  distributor  network  for its Products in the Protected
                    Territory  and their goodwill toward the Company relating to
                    the  marketing and distribution of the Company's Products in
                    the  Protected  Territory,  and

               (ii) The  company through Employee has expended substantial time,
                    money and effort in acquiring its customers and distribution
                    network for its Products in the Protected Territory, and the
                    business and goodwill which the Company enjoys are dependent
                    to  a  high  degree  upon  their personal relationships with
                    Employee;


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               (iii)  Selling  and  servicing  the  Company's  Products  in  the
                    Protected  Territory  Requires  special skills and Knowledge
                    which  are  valuable  assets  of  the  Company.

          (b)  Employee  expressly agrees that during the term of this Agreement
               and for a period of twelve months after Employee's termination of
               employment:

               (i)  The  Employee  will  not  disclose  information  deemed
                    proprietary  to the company, not in the public domain, which
                    includes, but not limited to, product development, marketing
                    programs,  sales  data,  sales  organizations  and financial
                    information.

               (ii) Employee  will  not solicit Employees of the Company for the
                    purpose  of  encouraging  such persons to leave or terminate
                    their  relationship  with  the  company.

          (c)  Employee further expressly agrees that at no time during the term
               of  this agreement will he engage in or have a financial interest
               in  any  business  which  is  offering,  selling,  supplying,
               manufacturing,  or  servicing Products which are competitive with
               any  Products  offered,  sold  or  supplied by the Company to any
               person,  firm,  partnership,  corporation,  or  other  entity.

          (d)  Employee further agrees that the remedy at law for any breach for
               any of the provisions of this section will be inadequate and that
               the  Company,  its  successors  or  assigns  shall be entitled to
               injunctive  relief  in  addition  to any other rights or remedies
               which  the  Company  may  have  for  any  such  breach.

     7.   Arbitration.  Any  controversy or claims arising out of or relating to
          this Agreement shall be submitted to binding arbitration in accordance
          with  the  Commercial  Arbitration  Rules  of the American Arbitration
          Association in Waukesha County, Wisconsin, and judgment upon the award
          rendered  by  the  arbitrator  may  be  entered  in  any  court having
          jurisdiction  thereof.  If the parties cannot agree on the choice of a
          single  arbitrator  within  15  days  after  receipt  of  a  notice of
          arbitration,  then  the  parties  shall contact the chairperson of the
          Alternative Dispute Resolution section of the Wisconsin Bar, who shall
          select an independent arbitrator, and the arbitration shall be decided
          by  such  an  arbitrator.  right  to  file  with  a court of competent
          jurisdiction  an  application  for temporary or preliminary injunctive
          relief  or  a  temporary  protective  order  on  the  grounds that the
          arbitration  award  to  which  the  applicant  may  be entitled may be
          rendered  effective  in  the  absence  of such relief. The arbitration
          award  shall  be  in  writing, and shall specify the factual and legal
          bases for the award. The losing party shall pay all costs and expenses
          of  the  arbitrator.

     8.   Notices. Any notice, request, approval, consent, demand, permission or
          other  communication  required or permitted by this Agreement shall be
          effective  only  if it is in a writing signed by the Party giving same
          and  shall be deemed to have been sent, given and received only either
          a (a) when personally received by the intended recipient, or (b) three
          days  after  depositing  in  the  United  States  Mail,  registered or
          certified  mail,  return  receipt  requested, with first-class postage
          prepaid,  addressed  as  follows:

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                    If  the  Employee:

                    Emil  H.  Soika
                    2040  Limerick  Lane
                    Brookfield,  WI  53045

                    If  to  the  Company:

                    Criticare  Systems,  Inc.
                    20925  Crossroads  Circle
                    Waukesha,  WI  53186
                    Attn:  President

          Or  to  such  other  address  as  the  intended  recipient  may  have
          theretofore  specified  by  notice  given to the sender as provided in
          this  section.

     9.   Assignability.  This  agreement  requires  the  personal  services  of
          Employee,  and  Employee's  rights or obligations hereunder may not be
          assigned  or  delegated  except as set forth in this agreement. In the
          event  of  a  sale  of  the  stock of the Company, or consolidation or
          merger  of  the Company with or into another company or entity, or the
          sale  of  all  or any substantial part of the assets of the Company to
          another corporation, entity or individual, the Company may assign this
          Agreement  to  any  successor  in  interest  and upon such assignment,
          Company  shall have no further liability and the successor in interest
          shall  be  subject  to  all obligations and be entitled to enforce all
          rights  of the Company under this Agreement. Subject to the foregoing,
          this  Agreement shall bind and inure to the benefit of the parties and
          their  respective  successors  and  assigns.

     10.  Other Agreements. This Agreement contains the entire agreement between
          the  Company  and  Employee with respect to the subject matter hereof,
          and  merges  and  supersedes  all  prior agreements, understandings or
          negotiations  whatsoever  with  respect  to the subject matter hereof.

     11.  Amendments  and  Waivers. No amendment to this Agreement or any waiver
          of any of its provisions shall be effective unless expressly stated in
          a writing signed by both parties. No delay or omission in the exercise
          of any right, power or remedy under or for this Agreement shall impair
          such right, power or remedy or be construed as a waiver of any breach.
          Any waiver of a breach of any provision of this Agreement shall not be
          treated  as a waiver of any other provision of breach of any provision
          of this Agreement or of any subsequent breach of the same or any other
          provision  of  this  Agreement.

     12.  Severability.  If  any  provision  of  this  Agreement  shall  be held
          illegal, invalid or otherwise unenforceable under controlling law, the
          remaining  provisions  of this Agreement shall not be affected thereby
          but  shall  continue  in  effect.


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<PAGE>
     13.  Governing  Law.  This Agreement shall be governed by and construed and
          enforced  in  accordance  with  the  laws  of  the State of Wisconsin.

                                   CRITICARE  SYSTEMS,  INC.

                                   By:  /s/  Higgins  G.  Bailey
                                        ------------------------
                                        Its  Chairman,  Compensation  Committee,
                                             Board  of  Directors

                                   EMPLOYEE

                                   /s/  Emil  H.  Soika
                                   --------------------
                                   Emil  H.  Soika


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