**EXHIBIT
      10.13**





**EMPLOYMENT**
              **AGREEMENT**





THIS
      EMPLOYMENT AGREEMENT (the "Agreement") is made as of 5/12/00 ,
      2000,
      by and between CRITICARE SYSTEMS, INC., a Delaware corporation (the "Company"),
      and Deborah A. Zane ("Employee").





**RECITALS**





A. Employee
      is currently employed by the Company as its Director of Marketing.





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 Director
      of
      Marketing, 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 Director of Marketing. Employee
      shall have such duties and authority as are customary for the Director of
      Marketing of a publicly-held corporation with similar authority and as the
      Company's President may from time to time reasonably assign Employee consistent
      with the foregoing and the other provisions of this Agreement. Employee agrees
      to devote Employee's entire business time, energy and skills to such employment.
      However, it is understood that Employee shall not be required to devote more
      than the usual and customary hours per calendar week to such employment as
      are
      generally expected of similarly situated employees of publicly-held companies.
      At all times, Employee shall be subject to the direction of the Company's
      President.





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 payable in equal installments
      not
      less frequently than monthly. Employee's base salary shall be reviewed annually
      within 30 days prior to the end of each fiscal year (but such annual base salary
      shall not be reduced to less than the prior year's annual base salary without
      Employee's written consent).








(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
      and/or President.





(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 three 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 (as 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 Employee
      has completed three (3) months of employment by the
      Company after the occurrence of a Change in Control (as hereinafter defined),
      Employee shall be entitled to receive severance benefits for a period of twelve
      (12) months after the date of termination or until Employee secures new
      employment, whichever is shorter, consisting of the following:





A.
            Employee's
                base salary, and





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





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C.
            Continuation
                of use of the company car or an equivalent car
                allowance.





(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 12 months after the date of termination
      as
      severance benefits consisting of the following:





A.
            Employee's
                base salary, and





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





C.
            Continuationof
                use of the company car or an equivalent car
                allowance.





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 30 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 in 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 date of termination,
      all obligations of the Company to pay Employee compensation shall terminate
      and
      the Company shall have no further obligation to Employee after the date of
      termination.





Upon
      termination of employment for any reason, Employee will deliver to the Company
      all data, records and information, including without limitation, all documents,
      correspondence, files, notebooks, reports, computer programs, software, manuals,
      customer information, samples and all other materials and copies thereof
      relating to the Company's business which Employee may possess or which are
      under
      Employee's control.





4. Options .
      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 exchange of assets or stock anticipated
      to
      constitute a Change in 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.





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5. Confidentiality .
      Employee covenants that Employee 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 Employee's duties for the Company, (b)
      disclosure is required by applicable law, or (c) the Company's Board of
      Directors authorizes disclosure.





6. Other
      Company Employees .
      For a
      period of one year from the date Employee's employment by the Company
      terminates, Employee shall not (a) solicit another Company employee to leave
      the
      Company's employ and work for the Employee or another person or entity, or
      (b)
      participate in the hiring of another Company employee by another person or
      entity away from the Company.





7. Restrictive
      Covenant.





(a) As
      used
      in this Section 7, 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 and all countries outside of
      the
      United States of America.





(b) The Employee expressly acknowledges that:





(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 distribution 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;





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





(c) Employee expressly agrees that during the term of this Agreement and for the period
      of 12
      months after Employee's voluntary termination of employment or for the period
      of
      12 months after the Company's termination of Employee's employment with or
      without Cause (the running of said 12 month periods being tolled during any
      breach of the provisions of this section):





4


(i) The
      Employee will not, either directly or indirectly, for Employee or on behalf
      of
      or in conjunction with any other person, firm, partnership, corporation,
      association or other entity, contact in the Protected Territory any customer
      of
      the Company to whom the Company has sold any of its Products within the 18
      months immediately preceding Employee's termination or to whom the Company
      or any member
      of its distribution network has made a proposal in the Protected Territory
      for
      the sale of the Company's Products within the six months preceding Employee's
      termination or to whom Employee or Company's distribution network called upon
      in
      the Protected Territory during the periods described above for the primary
      purpose of soliciting such customer in the Protected Territory with respect
      to
      purchasing or obtaining services with respect to Products for use in the
      Protected Territory which compete with Products manufactured and sold by the
      Company, and





(ii) Employee
      will not directly or indirectly solicit or communicate with members of the
      Company's distribution network in the Protected Territory at the time Employee's
      employment is terminated or who were members of such distribution network in
      the
      Protected Territory within 12 months immediately preceding such termination
      date
      (y) for the purpose of encouraging such persons to leave or terminate their
      relationship with the Company, or (z) for the primary purpose of encouraging
      such members to represent any other person, firm, partnership, corporation,
      association or other entity with respect to the sale, lease or servicing of
      Products in the Protected Territory which compete with Products manufactured
      and
      sold by the Company.





(d) Employee
      further expressly agrees that at no time during the term of this Agreement
      will
      Employee 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.





(e) 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.





8. 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 independent arbitrator. Each of the
      parties reserves the 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 ineffective 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.





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9. 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) 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:





If
      the
      Employee:





Deborah
      A. Zane


1660
      North Prospect Avenue, Apt. 1906


Milwaukee,
      WI 53202





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.





10. 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 hereunder 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.





11. 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.





12. 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 this Agreement or of any
      subsequent breach of the same or any other provision of this
      Agreement.





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13. 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.





14. 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/
      Emil H.
      Soika


Its PRES/CEO








**EMPLOYEE:**








/s/
      Deborah A.
      Zane


Deborah
      A. Zane





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