Document:

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                                                                     Exhibit 4.1

                           Data Critical Corporation

                         Registration Rights Agreement

                                     Dated
                                     as of

                                August 31, 2000

                         Registration Rights Agreement

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
August 31, 2000, by and among Data Critical Corporation, a Delaware corporation
(the "Company"), and Michael Bergelson, Richard W. Schurig, Richard Puzo, Wayne
Casebolt, Eric Reidman and Anthony Marchesini (each a "Stockholder" and,
collectively, the "Stockholders").

                                   RECITALS

     A.   Concurrently herewith the Company and the Stockholders are entering
into (i) a certain Limited Partnership Interest and Stock Purchase Agreement of
even date herewith (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Purchase Agreement") pursuant to
which, inter alia, the Stockholders have agreed to exchange their shares of
common stock of Paceart G.P., Inc. to Purchaser in consideration of cash and
shares of the common stock ($.001 par value) of the Company (the "Common
Stock"), and (ii) a certain Escrow Agreement of even date herewith (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "Escrow Agreement"), pursuant to which, inter alia, the Stockholders have
agreed to place a certain number of shares of Common Stock owned by them into
escrow for the benefit of the Company and the Purchaser.

     B.   In connection with the transactions contemplated by the Purchase
Agreement, the Company will issue to each Stockholder options (the "Options") to
purchase additional shares of Common Stock.
<PAGE>

     C.   The execution of this Agreement by the parties is a condition to the
obligation of the Stockholders to consummate the transactions contemplated by
the Purchase Agreement.

                                   AGREEMENT

1.   Definitions

     For purposes of this Agreement, the following terms have the following
meanings:

          (a)  "Form S-3" means such form under the Act as in effect on the date
hereof or any registration form under the Act subsequently adopted by the
Securities and Exchange Commission (the "SEC") that similarly permits inclusion
or incorporation of substantial information by reference to other documents
filed by the Company with the SEC;

          (b)  "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or order of effectiveness of such registration
statement or document;

          (c)  "Registrable Securities" means (i) the Common Stock received by
the Stockholders pursuant to the Purchase Agreement or the Escrow Agreement,
(ii) any Common Stock issued to a Stockholder upon exercise of such
Stockholder's Options, and (iii) any Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Common Stock or Options, excluding in all cases,
however, any Registrable Securities (x) sold, conveyed, or otherwise transferred
or disposed of by a Stockholder thereof to any person or entity and (y) any
Common Stock which a Stockholder is entitled to sell into the public market,
together with all other Registrable Securities of the Company beneficially owned
by such Stockholder (and all Registrable Securities as to which such Stockholder
shares beneficial ownership) that is at the time of registration, transferable
by such Stockholder in a single brokerage transaction under the provisions and
within the volume limitations of Rule 144(e)(1) promulgated under the Act or any
successor to such Rule; and

          (d)  "Registrable Securities then outstanding" means the number of
shares of Common Stock outstanding which are, and the number of shares of Common
Stock issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities.
<PAGE>

          (f)  "SEC" means the Securities and Exchange Commission.

2.   Company Registration

     If (but without any obligation to do so) the Company proposes to register
(including for this purpose a registration effected by the Company for any
shareholder other than the Stockholders) any of its stock or other securities
under the Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form that does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities), the Company shall, at each such time, promptly give the
Stockholders notice of such registration. Upon the written request of a
Stockholder, the Company shall, subject to the provisions of Section 7, use
commercially reasonable efforts to cause to be registered under the Act all of
the Registrable Securities that such Stockholder has requested to be registered
as soon as practicable. In the event that the Company decides for any reason not
to complete the registration of shares of Common Stock other than Registrable
Securities, the Company shall have no obligation under this Section 2 to
continue with the registration of Registrable Securities. Any request pursuant
to this Section 2 to register Registrable Securities as part of an underwritten
public offering of Common Stock shall specify that such Registrable Securities
are to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration.

3.   Form S-3 Registration.

     (a)  If the Company shall receive at any time at least eighteen (18) months
after the effective date of this Agreement, a written request from any
Stockholder or Stockholders of not less than fifty percent (50%) of the
Registrable Securities then outstanding, to effect a registration on Form S-3,
then the Company shall, subject to the limitations set forth below, use
commercially reasonable efforts to effect as soon as practicable the
registration under the Act of all Registrable Securities that such Stockholder
or Stockholders request be so registered.

     (b)  Notwithstanding the foregoing, the Company shall not be obligated to
effect any such registration pursuant to this Section 3 if: (i) Form S-3 is not
available for such offering by such Stockholder(s); (ii) the Stockholder(s),
together with the holder of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (before deduction
of any underwriters' discounts or commissions) of less than $2,500,000; (iii)
the Company shall furnish to such Stockholder(s) a
<PAGE>

certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 registration
to be filed or effected at such time, in which event the Company shall have the
right to defer the filing of the Form S-3 registration statement for two (2)
periods of not more than ninety (90) days each after receipt of the request of a
Stockholder under this Section 3; (iv) if the Company has, within the twelve
(12)-month period preceding the date of such request, already effected a
registration on Form S-3 for any Stockholder(s) pursuant to this Section 3; or
(v) the Company within the twelve (12)-month period preceding the date of such
request has effected a registration of securities in which any Stockholder was
entitled to participate to the fullest extent they desired pursuant to Section
2.

4.   Obligations of the Company

     Whenever required under this Agreement to effect the registration of any
Registrable Securities of a Stockholder, the Company shall, as expeditiously as
reasonably possible:

          (a)  Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and, upon the
request of the Stockholder, keep such registration statement effective for up to
one hundred twenty (120) days. The Company shall not be required to file, cause
to become effective or maintain the effectiveness of any registration statement
that contemplates a distribution of securities on a delayed or continuing basis
pursuant to Rule 415 under the Act.

          (b)  Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.

          (c)  Furnish to the Stockholder such copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as they may reasonably request to facilitate the
disposition of all securities covered by such registration statement for up to
one hundred twenty (120) days.

          (d)  List the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities is
listed or qualify the Registrable Securities being registered for inclusion on
NASDAQ if the
<PAGE>

Company does not have a class of equity securities listed on a national
securities exchange.

          (e)  In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. The Stockholder shall
also enter into and perform its obligations under such an agreement.

          (f)  Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, such obligation to continue for one hundred twenty (120) days.

5.   Furnish Information

     It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Agreement that each selling Stockholder furnish to
the Company such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of such securities as shall be
required to effect the registration of their Registrable Securities and shall
execute such documents in connection with such registration as the Company may
request. The Company shall have no obligation with respect to any registration
requested pursuant to Section 3 of this Agreement if, as a result of the
application of the preceding sentence, the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 3(b)(ii).

6.   Expenses of Registration

     In connection with any registration pursuant to this Agreement (other than
pursuant to Section 3 above), the Company shall be responsible for the payment
of all reasonable expenses of the registration, with the exception of (a)
underwriting discounts and commissions, which shall be paid by the Company, the
Stockholder and any other selling holder of the Company's securities in
proportion to the aggregate value of the securities offered for sale by each of
them, and (b) the fees and expenses of any law firm or firms acting primarily as
counsel to a Stockholder or Stockholders and any other selling holders of the
Company's securities, which expenses and fees of
<PAGE>

such counsel, if any, shall be the obligation of such Stockholder(s), all of
which shall be paid by the selling Stockholder(s). The expenses to be paid by
the Company shall include, without limitation, all registration, filing and
qualification fees, printing and accounting fees and the fees and disbursements
of counsel for the Company.

7.   Underwriting Requirements

     (a)  The Company shall not be required under Section 2 to include any
securities of any Stockholder in an underwritten offering of the Company's
securities unless each selling Stockholder accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it. Each
Stockholder acknowledges that it is aware that various other holders (the "Other
Holders") of the Company's securities have registration rights similar or prior
to the Stockholders' rights ("Piggyback Rights") pursuant to Section 2 of this
Agreement that may be effectuated by the exercise by a Stockholder of its rights
pursuant to this Agreement. If the underwriters advise the Company that
marketing factors require a limitation on the number of shares, including
Registrable Securities, to be included in such offering, then the Company shall
so advise the Stockholders and all other holders of securities of the Company
that may be included therewith in such registration and that would otherwise
have been underwritten pursuant to Section 2, and the number of shares,
including Registrable Securities, that may be included in the registration shall
be apportioned first to the Company, then to and among the Other Holders to the
extent necessary to satisfy such Other Holders' priority Piggyback Rights under
such other agreements, and then pro rata among the Stockholders and any
remaining Other Holders having non-priority Piggyback Rights according to the
total amount of Registrable Securities requested to be sold in such registration
by each such Stockholder and such Other Holders.

     (b)  The number of Registrable Securities of a Stockholder that may be
excluded from an offering under Section 7(a) may include all of such
Stockholders' Registrable Securities; provided, however, that in the event such
                                      --------  -------
limitation excludes more than 70% of such Stockholder's Registrable Securities
then outstanding, then the registration of such Registrable Securities may be
withdrawn at the request of the Stockholders of a majority of the Registrable
Securities to be registered.

     (c)  Nothing in this Agreement shall restrict the power or authority of the
Company to enter into, or shall imply any right on the part of any Stockholder
to consent to the Company's entry into, any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder (a) to include such securities on a priority basis
in any registration filed hereunder or (b) to make a demand registration which
could result in such registration statement being declared effective prior to
the expiration of eighteen (18)
<PAGE>

months after the effective date of this Agreement or within one hundred twenty
(120) days of the effective date of any registration effected hereunder.

8.   Delay of Registration.

     No Stockholder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration of the Company as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.

9.   Indemnification

     In the event any Registrable Securities are included in a registration
statement under this Agreement:

          (a)  To the extent permitted by law, the Company will indemnify and
hold harmless each Stockholder and each person, if any, who controls such
Stockholder within the meaning of the Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), against any actual expenses (including legal
fees and costs), losses, claims, damages (including settlement amounts) or
liabilities (joint or several) (collectively, "Losses") to which it may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such Losses arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (i) any statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any amendments
or supplements thereto, which is untrue in light of the circumstances under
which they were made, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law. The Company
will reimburse (as incurred) the Stockholder or any such controlling person for
any Losses reasonably incurred by them in connection with investigating or
defending any Violations; provided, however, that the indemnity agreement
                          --------  -------
contained in this Section 9(a) shall not apply to amounts paid in settlement of
any claims for Violations if such settlement is made without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any Losses that arise out of or are based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by,
or on behalf of, the Stockholder or such controlling person.
<PAGE>

          (b) To the extent permitted by law, each Stockholder will indemnify
and hold harmless the Company and its officers, directors, agents and employees,
each underwriter and each other selling holder selling securities in such
registration statement, and any person who controls any of the foregoing within
the meaning of the Act or the 1934 Act, against any Losses to which the Company
or such officer, director, agent, employee, or underwriter or other selling
holder or controlling person may become subject under the Act, the 1934 Act or
other federal or state law, insofar as such Losses arise out of or are based
upon any Violation that occurs in reliance upon and in conformity with written
information furnished by, or on behalf of, each Stockholder expressly for use in
connection with such registration; and each such Stockholder will reimburse (as
incurred) any Losses reasonably incurred by the Company or its officers,
directors, agents, employees, or underwriters or other selling holder or
controlling persons in connection with investigating or defending any
Violations; provided, however, that (i) the indemnity agreement contained in
            --------  -------
this Section 9(b) shall not apply to amounts paid in settlement of any claims
for Violations if such settlement is made without the consent of such
Stockholder, which consent shall not be unreasonably withheld and (ii) the
obligations of such Stockholder shall be limited to an amount equal to the net
proceeds (after payment of expenses and commissions) to such Stockholder of
Registrable Securities sold as contemplated herein.

          (c) Promptly after receipt of notice of the commencement of any action
(including any governmental action), an indemnified party will, if a claim is to
be made against any indemnifying party under this Section 9, deliver to the
indemnifying party a written notice of the commencement, and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
                             --------  -------
have the right to retain its own counsel (limited to one additional counsel),
with the fees and reasonable expenses to be paid by the indemnifying party, if
and to the extent, in the reasonable opinion of counsel for the indemnifying
party, representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in the proceeding.  The failure to deliver written notice to the
indemnifying party within a reasonable period of time after notice of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 9 to the extent such
failure is prejudicial to its ability to defend such action, but the omission to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.
<PAGE>

          (d) If the indemnification provided for in this Section 9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any Losses, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the Violations
that resulted in such Losses as well as any other relevant equitable
considerations; provided, that, in no event shall any contribution by any
                --------
Stockholder under this Section 9(d) exceed the gross proceeds (before payment of
expenses and commissions) to such Stockholder, except in the case of willful
fraud by such Stockholder. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the Violation resulting in such Losses relates to information supplied
by the indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such Violation.

          (e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.

          (f) The obligations of the Company and each Stockholder under this
Section 9 shall survive the completion of any offering of Registrable Securities
and the termination of Registration Rights pursuant to Section 12.

10.  Reports Under the Act

     With a view to making available to the Stockholders the benefits of SEC
Rule 144 promulgated under the Act and any other rule or regulation of the SEC
that may at any time permit a Stockholder to sell securities of the Company to
the public without registration or pursuant to a registration on Form S-3, the
Company agrees to use commercially reasonable efforts to:

          (a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days from
the effective date of the first registration statement filed by the Company for
the offering of its securities to the general public;

          (b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and

          (c) Furnish to any Stockholder, so long as such Stockholder owns any
Registrable Securities, promptly upon request (i) a written statement by the
<PAGE>

Company that it has complied with the reporting requirements of the 1934 Act (at
any time after ninety (90) days from the date on which it becomes subject to
such reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing such Stockholder of any rule or regulation of the SEC that permits the
selling of any such securities without registration.

11.  Assignment of Registration Rights

     The rights to cause the Company to register Registrable Securities pursuant
to this Agreement shall not be assigned by any Stockholder. Any assignment made
in violation of this Section 11 shall be null and void ab initio.

12.  Termination of Registration Rights

     The registration rights granted under Sections 3 and 4 of this Agreement
shall terminate as to each Stockholder on the earlier of (i) the fourth
anniversary of the date of this Agreement, (ii) such time as such Stockholder
shall be able to sell all of its Registrable Securities into the public market
within a three month period in accordance with Rule 144(f) promulgated under the
Act or any successor to such Rule, and (iii) a change of control of the Company.
For purposes of this Section 12, "change of control of the Company" means a
transaction in which the Company shall sell, convey, or otherwise dispose of all
or substantially all of its property or business or merge with or into or
consolidate with any other corporation (other than a wholly-owned subsidiary
corporation) or effect any other transaction or series of related transactions
in which more than 50% of the voting power of the Company is disposed of and the
Company is not the survivor, other than a merger effected solely for the purpose
of changing the domicile of the Company.

13.  Market Standoff Agreement; Lock-Up

     (a)  Standoff Period; Agreement. In connection with each and any public
          --------------------------
offering of the Company's securities and upon request of the Company or the
underwriters managing such offering of the Company's securities, each
Stockholder agrees not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any securities of the Company,
however or whenever acquired (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting
<PAGE>

the foregoing as may be requested by the underwriters at the time of the
Company's initial public offering.

     (b)  Lock-Up Agreement. Each of Wayne Casebolt, Richard Schurig, Richard
          -----------------
Puzo and Eric Reidman agrees that prior to six months after the effective date
of this Agreement, and each of Michael Bergelson and Anthony Marchesini agrees
that prior to twelve months after the effective date of this Agreement, he shall
not sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any securities of the Company, including but not limited to
Common Stock, however or whenever acquired, without the prior written consent of
the Company; provided, that in the event Mssr. Bergelson's or Marchesini's
employment with the Company and its subsidiaries and affiliates is terminated
(other than voluntarily by the employee or involuntarily for cause) prior to the
expiration of such twelve month period, such lock-up period in respect of such
employee shall terminate on the date of such termination. In order to enforce
the foregoing covenants, the Company may place restrictive legends on the
securities of such Stockholder reflecting the restriction set forth in this
Section 13(b).

     (c)  Stop-Transfer Instructions. In order to enforce the foregoing
          --------------------------
covenants, the Company may impose stop-transfer instructions with respect to the
securities of each Stockholder (and the securities of every other person subject
to the restrictions in Section 13(a) or (b)).

     (d)  Transferees Bound. Each Stockholder agrees that it will not transfer
          -----------------
securities of the Company unless each transferee agrees in writing to be bound
by all of the provisions of this Section 13.

14.  Miscellaneous

     14.1 Notices

     Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) upon confirmation of receipt by fax by the party to be
notified; (c) one business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed as set forth in (d); or (d) five
(5) days after deposit with the United States Post Office, postage prepaid,
registered or certified with return receipt requested and addressed to the party
to be notified at the address indicated for such party on the signature page, or
at such other address as such party may designate by ten (10) days' advance
written notice to the other parties given in the foregoing manner.
<PAGE>

     14.2 Amendments and Waivers

     Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the Stockholder(s) of more than fifty percent (50%) of Registrable Securities
then outstanding.

     14.3 Governing Law; Jurisdiction; Venue

     This Agreement shall be governed by and construed under the laws of the
state of Washington without regard to principles of conflict of laws. The
parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in the County of King, the State of Washington in
connection with any action relating to this Agreement.

     14.4 Successors and Assigns

     The terms and conditions of this Agreement shall inure to the benefit of
and be binding on the respective successors and assigns of the parties as
provided herein.

     14.5 Severability

     If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

     14.6 Entire Agreement; Counterparts

     This Agreement constitutes the entire agreement between the parties about
its subject and supersedes all prior agreements. This Agreement may be executed
in one or more separate counterparts, each of which shall be an original and all
of which when taken together shall constitute one and the same agreement.

                           [Signature page follows.]
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                  THE COMPANY:

                                                  DATA CRITICAL CORPORATION

                                                  By: /s/ Michael E. Singer
                                                      --------------------------
                                                      Its:   CFO
                                                      --------------------------
<PAGE>

                                                  STOCKHOLDERS:

                                                  DR. MICHAEL N. BERGELSON
                                                  /s/ Michael N. Bergelson
                                                  ------------------------------

                                                  WAYNE CASEBOLT
                                                  /s/ Wayne Casebolt
                                                  ------------------------------

                                                  RICHARD W. SCHURIG
                                                  /s/ Richard W. Schurig
                                                  ------------------------------

                                                  RICHARD PUZO
                                                  /s/ Richard Puzo
                                                  ------------------------------

                                                  ANTHONY MARCHESINI
                                                  /s/ Anthony Marchesini
                                                  ------------------------------

                                                  ERIC REIDMAN
                                                  /s/ Eric Reidman
                                                  ------------------------------<PAGE>

                                                                    EXHIBIT 10.1

                           DATA CRITICAL CORPORATION

                             EMPLOYMENT AGREEMENT
                             --------------------

          This Employment Agreement (the "Agreement") is dated as of August 31,
                                          ---------
2000 (the "Effective Date") by and between Dr. Michael N. Bergelson
           --------------
("Employee")and Data Critical Corporation, a Delaware corporation (together with
  --------
any successor corporation, the "Company").
                                -------

          1.   Term of Agreement. This Agreement shall commence on the Effective
               -----------------
Date and shall have a term of three (3) years, subject to earlier termination as
set forth below  (the "Original Term").
                       -------------

          2.   Duties.
               ------

               (a)  Position.  Employee shall be employed as an officer of the
                    --------
Company, and as such shall have executive management responsibilities for the
division or subsidiary of the Company in which the operations of Paceart
Associates, L.P. ("Paceart") have been transferred, and shall perform such other
duties as shall be required by his supervisor.  The location at which Employee
shall be employed shall be the same as that for the main operations of Paceart,
which the Company covenants will, for a period of at least [2 years] be
maintained within a [60] mile radius (as the crow flies) of New York, New York.

               (b)  Obligations to the Company.  Employee agrees to the best of
                    --------------------------
his ability and experience that he will at all times loyally and conscientiously
perform all of the duties and obligations required of and from Employee pursuant
to the express and implicit terms hereof, and to the reasonable satisfaction of
the Company and his supervisor.  During the term of Employee's employment
relationship with the Company, Employee further agrees that he will devote all
of his business time and attention to the business of the Company, the Company
will be entitled to all of the benefits and profits arising from or incident to
all such work services and advice.  Employee will not render commercial or
professional services of any nature to any person or organization, whether or
not for compensation, without the prior written consent of the Company's Board
of Directors (the "Board"), and Employee will not directly or indirectly engage
or participate in any business that is competitive in any manner with the
business of the Company.  Nothing in this Agreement will prevent Employee from
accepting speaking or presentation engagements in exchange for honoraria or from
serving on boards of charitable organizations (provided in each case that such
opportunities do not interfere with Employee's duties hereunder), or from owning
no more than 1% of the outstanding equity securities of a corporation whose
stock is listed on a national stock exchange or the Nasdaq National Market.
Employee will comply with and be bound by the Company's operating policies,
procedures and practices from time to time in effect during the term of
Employee's employment.

          3.   At-Will Employment.  The Company and Employee acknowledge that
               ------------------
Employee's employment is and shall continue to be at-will, as defined under
applicable law, and that Employee's employment with the Company may be
terminated by either party at any time for any or no reason.  If Employee's
employment terminates for any reason, Employee shall not
<PAGE>

be entitled to any payments, benefits, damages, award or compensation other than
as provided in this 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 the Board.

          4.   Compensation.  For the duties and services to be performed by
               ------------
Employee hereunder, the Company shall pay Employee, and Employee agrees to
accept, the salary, stock options, bonuses and other benefits described below in
this Section 4.

               (a)  Salary.  Employee shall receive a monthly salary of
                    ------
$13,333.33, which is equivalent to $160,000.00 on an annualized basis (subject
to customary withholding). Employee's monthly salary will be payable in [two]
equal payments per month pursuant to the Company's normal payroll practices. The
Employee's base salary shall be reviewed at the end of the year 2001 and
annually thereafter by Employee's supervisors, and any increase will be
effective as of the date determined appropriate by the Board, its Compensation
Committee or the Chief Executive Officer of the Company.

               (b)  Stock Options and Other Incentive Programs.  Employee shall
                    ------------------------------------------
be eligible to participate in any stock option or other incentive programs
available to officers or employees of the Company.

          In connection with the commencement of Employee's employment, the
Board of Directors shall grant to Employee options ("Initial Options") to
purchase 100,000 shares of the common stock of Data Critical Corporation
("Parent").  The Initial Options shall have an exercise price equal to the
closing price of the Parent's stock on the trading day immediately preceding the
Effective Date.  A fraction equal to 1/36th of the Initial Options shall vest on
the last day of each month commencing after the month of the Effective Date.
Vesting will, of course, depend on Employee's continued employment with the
Company.  The option will be an incentive stock option to the maximum extent
allowed by the Internal Revenue Code of 1986, as amended, and will be subject to
the terms of the Company's 1999 Stock Option Plan and the Stock Option Agreement
between Employee and the Company (collectively, the "Option Documents").
Subject to the discretion of the Company's Board of Directors, the Employee may
be eligible to receive additional grants of stock options or purchase rights
from time to time in the future, on such terms and subject to such conditions as
the Board shall determine as of the date of any such grant.

          Notwithstanding the above and subject to the provisions of Section 10
below, in the event of a Change of Control (as defined below), 50% of the
unvested portion of the Initial Options  shall become immediately exercisable on
the effective date of such event.  For purposes of this Agreement, "Change of
                                                                    ---------
Control" shall mean the occurrence of any of the following events:  (i) an
-------
acquisition of the Company by another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company) (a
"Merger"), in either case, the result of which is that the Company's
 ------
stockholders of

                                      -2-
<PAGE>

record immediately prior to such Merger will, immediately after such Merger,
hold less than 50% of the voting power of the surviving or acquiring entity, or
(ii) a sale of all or substantially all of the assets of the Company to an
unrelated entity. Notwithstanding the foregoing, no Merger or sale of all or
substantially all of the assets of the Company for purposes of changing the
jurisdiction of incorporation of the Company or to effect such other corporate
reorganization shall be deemed a Change of Control hereunder. Furthermore
vesting of the Initial Options may be accelerated as otherwise expressly
provided herein or in the Option Documents.

               (c)  Additional Benefits.  Employee will be eligible to
                    -------------------
participate in the Company's employee benefit plans of general application,
including without limitation, those plans covering medical, disability and life
insurance in accordance with the rules established for individual participation
in any such plan and under applicable law. Employee will be eligible for Paid
Time Off (PTO) in accordance with the policies in effect during the term of this
Agreement and will receive such other benefits as the Company generally provides
to its other employees of comparable position and experience.

               (d)  Reimbursement of Other Expenses.  Employee shall be
                    -------------------------------
authorized to incur on behalf and for the benefit of, and shall be reimbursed
by, the Company for reasonable expenses, provided that such expenses are
substantiated in accordance with Company policies.

          5.   Termination of Employment and Severance Benefits.
               ------------------------------------------------

               (a)  Termination of Employment.  This Agreement may be terminated
                    -------------------------
during its Original Term (or any extension thereof) upon the occurrence of any
of the following events:

                    (i)    The Company's determination in good faith that it is
terminating Employee for Cause (as defined in Section 6 below) ("Termination for
                                                                 ---------------
Cause");
-----

                    (ii)   The Company's determination that it is terminating
Employee without Cause, which determination may be made by the Company at any
time at the Company's sole discretion, for any or no reason ("Termination
                                                              -----------
Without Cause");
-------------

                    (iii)  The effective date of a written notice sent to the
Company from Employee stating that Employee is electing to terminate his
employment with the Company ("Voluntary Termination"); or
                              ---------------------

                    (iv)   Following Employee's death or Disability (as defined
in Section 7 below).

               (b)  Severance Benefits.  Employee shall be entitled to receive
                    ------------------
severance benefits upon termination of employment with the Company and all of
its affiliates only as set forth in this Section 5(b):

                    (i)    Voluntary Termination.  If Employee's employment
                           ---------------------
terminates by Voluntary Termination, then Employee shall not be entitled to
receive payment of any severance benefits. Employee will receive payment(s) for
all salary and unpaid vacation accrued as of the

                                      -3-
<PAGE>

date of Employee's termination of employment and Employee's benefits will be
continued under the Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination and
in accordance with applicable law.

                    (ii)   Involuntary Termination Without Cause.  If Employee's
                           -------------------------------------
employment is terminated under Section 5(a)(ii) above (such termination, a
"Without Cause Termination"), (i) Employee will be entitled to receive payment
 -------------------------
of severance benefits equal to Employee's regular monthly salary for the lesser
of six (6) months or the remaining term hereunder (the "Severance Period"),
                                                        ----------------
which payments (subject to customary withholding) shall be made ratably over the
Severance Period according to the Company's standard payroll schedule and (ii)
fifty percent (50%) of the Employee's unvested Initial Options shall vest
immediately. Health insurance benefits with the same coverage provided to
Employee prior to the termination (e.g. medical, dental, optical, mental health)
and in all other respects significantly comparable to those in place immediately
prior to the termination will be provided at the Company's cost over the
Severance Period.

                    (iii)  Termination for Cause.  If Employee's employment is
                           ---------------------
terminated for Cause, then Employee shall not be entitled to receive payment of
any severance benefits. Employee will receive payment(s) for all salary and
unpaid vacation accrued as of the date of Employee's termination of employment
and Employee's benefits will be continued under the Company's then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of termination and in accordance with applicable law.

                    (iv)   Termination by Reason of Death or Disability.  In
                           --------------------------------------------
the event that Employee's employment with the Company terminates as a result of
Employee's death or Disability (as defined in Section 7 below), Employee or
Employee's estate or representative will receive all salary and unpaid vacation
accrued as of the date of Employee's death or Disability and any other benefits
payable under the Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of death or
Disability and in accordance with applicable law. Any unvested stock options or
shares of restricted stock held by Employee as of the date of Employee's
termination of employment shall vest immediately upon Employee's death or
disability.

               (c)  Consent to Terminate Employment of Others.  Through
                    -----------------------------------------
December 31, 2000, no person who was employed by Paceart Associates, L.P. and
was subsequently hired by the Company or any of its affiliates (each a
"Continuing Employee") may be terminated, other than for cause or in connection
 -------------------
with a general corporate downsizing, without the express written consent of
Employee; provided that Employee's continues to be employed by the Company or
any of its affiliates.

          6.   Definition of Cause.  For purposes of this Agreement, "Cause" for
               -------------------                                    -----
Employee's termination, shall mean:

               (a)  Employee's willful misconduct or gross negligence in
performance of his duties, including refusal to comply in any material respect
with the directives of the Board or such employee's supervisors or the Company's
policies and procedures;

                                      -4-
<PAGE>

               (b)  Use or ingestion by the Employee of an illegal substance or
a prescription drug without a validly issued prescription in the Employee's
name;

               (c)  Dishonest or fraudulent conduct, a deliberate attempt to do
an injury to the Company, or conduct that materially discredits the Company or
is materially detrimental to the reputation of the Company, including conviction
of a felony or class three misdemeanor (including such convictions resulting
from a plea of guilty or nolo contendre); or

               (d)  Employee's incurable material breach of any element of the
Company's Confidential Agreement (as defined below), including without
limitation, Employee's theft or other misappropriation of the Company's
proprietary information.

          7.   Definition of Disability.  For purposes of this Agreement,
               ------------------------
"Disability" shall mean that Employee has been unable to perform his duties
 ----------
hereunder as the result of his incapacity due to physical or mental illness, and
such inability, which continues for at least 120 consecutive calendar days or
150 calendar days during any consecutive twelve-month period, if shorter, after
its commencement, is determined to be total and permanent by a physician
selected by the Company and its insurers and acceptable to Employee or to
Employee's legal representative (with such agreement on acceptability not to be
unreasonably withheld).

          8.   Confidentiality Agreement.  Employee shall sign, or has signed, a
               -------------------------
Proprietary Information and Invention Assignment Agreement (the "Confidentiality
                                                                 ---------------
Agreement") substantially in the form attached hereto as Exhibit A.  Employee
---------                                                ---------
hereby represents and warrants to the Company that he has complied with all
obligations under the Confidentiality Agreement and agrees to continue to abide
by the terms of the Confidentiality Agreement and further agrees that the
provisions of the Confidentiality Agreement shall survive any termination of
this Agreement or of Employee's employment relationship with the Company.

          9.   Noncompetition Covenant.  Employee hereby agrees that he shall
               -----------------------
not, during the term of his employment pursuant to this Agreement and the
Severance Period, if any, and for a period of two (2) years after termination of
his employment with the Company and/or any of its affiliates for any reason, do
any of the following without the prior written consent of the Board (for
purposes of this Section, the term "Company" shall mean the Company and each of
its now or hereafter existing affiliates):

               (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
relating to handheld devices for the medical industry, remote monitoring of
ECGs, any pacemaker software or hardware products or technology, cardiology-
related software, physician charting products or any current or currently
planned products of the Company or Paceart Associates, L.P. that is otherwise
competitive with the business conducted by or planned to conducted by the
Parent, nor engage in any other activities that conflict with Employee's
obligations to the Company (any such company or enterprise, being a
"Competitor").

                                      -5-
<PAGE>

               (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 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. This
Section 9(c) is to be read in conjunction with the Confidentiality Agreement
executed by Employee.

Employee acknowledges and agrees that this Agreement is being entered into in
connection with the acquisition by the Parent and/or the Company of Paceart
Associates, L.P., in which the Employee held a significant equity interest and
was the primary operating principle.  As such Employee acknowledges and agrees
that the Parent and the Company have relied and are relying on the covenants
contained herein in their decision to consummate their acquisition of Paceart
Associates, L.P. and that in light of such reliance the covenants contained
herein are fair and reasonable.

          11.  Conflicts.  Employee represents that his performance of all the
               ---------
terms of this Agreement will not breach any other agreement to which Employee is
a party.  Employee has not, and will not during the term of this Agreement,
enter into any oral or written agreement in conflict with any of the provisions
of this Agreement.  Employee further represents that he is entering into or has
entered into an employment relationship with the Company of his own free will
and that he has not been solicited as an employee in any way by the Company.

          12.  Miscellaneous Provisions.
               ------------------------

               (a)  Amendments and Waivers.  Any term of this Agreement may be
                    ----------------------
amended or waived only with the written consent of the parties.

               (b)  Sole Agreement.  This 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 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 Agreement shall be governed by the laws of the State of
New Jersey, without giving effect to the principles of conflict of laws.

                                      -6-
<PAGE>

               (e)  Severability.  If one or more provisions of this 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 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 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 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. The
arbitrator shall apply New Jersey law, without reference to rules of conflicts
of law or rules of statutory arbitration, to the resolution of any dispute.
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. This Section 12(g) shall not apply
to the Confidentiality Agreement.

               (h)  Survival.  The provision of Sections 5(b)(ii), 5(b)(iv), and
                    --------
9 shall survive both the termination of this Agreement and Employee's employment
with the Company and/or its affiliates.

               (i)  Equitable Remedies.  Employee acknowledges and agrees that
                    ------------------
Employee's breach of this 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 shall be entitled to equitable
remedies, including, without limitation, specific performance and/or temporary
or permanent injunctive relief.

               (j)  Advice of Counsel.  EACH PARTY TO THIS AGREEMENT
                    -----------------
ACKNOWLEDGES THAT, IN EXECUTING THIS 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 AGREEMENT. THIS AGREEMENT
SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR
PREPARATION HEREOF.

                           [Signature Page Follows]

                                      -7-
<PAGE>

     The parties have executed this Agreement the date first written above.

                                    DATA CRITICAL CORPORATION

                                    By: /s/ Michael E. Singer
                                        ------------------------------------
                                    Title:  CFO
                                           ---------------------------------

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

                                    DR. MICHAEL N. BERGELSON

                                    Signature: /s/ Michael N. Bergelson
                                               -----------------------------
                                    Address:   750 Koppock Street
                                               -----------------------------
                                               Bronx, NY 10463
                                               -----------------------------

                                      -8-

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