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                                                                   EXHIBIT 10.11
                              EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT is entered into between medibuy.com, Inc. a
Delaware Corporation with a principal place of business at 7777 Alvarado Road,
Suite 401, La Mesa, California, 91941 ("COMPANY"), and James L. Hersma, whose
principal residence is at 4100 West 86th St., Tulsa, OK, 74132 ("EXECUTIVE").

        1. Employment.

        a) Executive Responsibilities. COMPANY hereby employs EXECUTIVE, and
EXECUTIVE hereby agrees to accept employment from COMPANY, as Executive Vice-
President of Market Development of COMPANY. EXECUTIVE shall report directly to
COMPANY's Chief Executive Officer. EXECUTIVE agrees during the term of his
employment under this Agreement to perform the duties and responsibilities
customarily required of such position, as reasonably directed by COMPANY's Chief
Executive Officer, and in accordance with COMPANY's bylaws and Delaware
corporation law. EXECUTIVE further agrees to use his best efforts to promote the
interests of COMPANY and to devote his full business time and energies to the
business and affairs of COMPANY, unless otherwise authorized by the Chief
Executive Officer of COMPANY. EXECUTIVE may, however, engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of his duties to COMPANY hereunder.

        b) Director Responsibilities. Subject to the approval of this Agreement
by a majority of the current directors of COMPANY, EXECUTIVE shall be elected a
member of the Board of Directors, to serve in such position until the next
regular meeting of COMPANY's shareholders. EXECUTIVE's continued service on
COMPANY's Board of Directors thereafter shall be subject to his election by vote
of the shareholders, but COMPANY will include



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EXECUTIVE in its recommended slate of __ candidates for membership on the Board.
In the event that EXECUTIVE's employment with COMPANY under this Agreement is
terminated for any reason, EXECUTIVE shall submit to the Chairman of the Board
his resignation as a Director.

        2. Term of Employment.

        The employment under this Agreement shall commence on May 26, 1999 and
shall end at the end of the day on May 25, 2000, provided that the term of
EXECUTIVE's employment under this Agreement shall thereupon and thereafter be
extended automatically for successive periods of one year unless otherwise
terminated under Paragraph 5 of this Agreement.

        3. Compensation.

        (a) Base Salary. As compensation for services provided to COMPANY,
EXECUTIVE shall receive a salary at the annual rate of $185,000.00, less such
payroll and withholding taxes as required by law to be deducted and such other
amounts as EXECUTIVE shall authorize in writing. Salary shall begin to accrue
under this Agreement as of June 14, 1999. Provided EXECUTIVE remains employed
under this Agreement beyond the first anniversary date of his employment
hereunder, his salary shall be increased to an annual rate of $300,000 effective
as of that first anniversary date. The salary shall be payable in semi-monthly
installments. Such salary may be increased, but not decreased, from time to time
as decided in the discretion of the Board of Directors of COMPANY.

        (b) Bonus. As additional compensation for services rendered by
EXECUTIVE, EXECUTIVE shall be entitled to participate in each incentive bonus
program (if any) that COMPANY's Board of Directors may establish for its
executive employees. Such bonus program shall provide a maximum bonus of fifty
percent (50%) of the salary paid during the year in which the bonus is earned,
based upon factors established by the Chief Executive Officer and approved by
the Board of Directors.



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        (c) Equity Compensation. As further compensation for the services
rendered by EXECUTIVE, upon his commencement of employment with COMPANY pursuant
to this Agreement and approval by COMPANY's Board of Directors, EXECUTIVE will
be granted an incentive stock option to purchase 31,500 shares of Common Stock
of COMPANY, subject to increase as provided below, at an exercise price per
share of $1.50 per share. Such options shall be issued pursuant to, and their
exercise and the issuance of shares upon exercise shall be subject to, the
conditions of the COMPANY's 1999 Equity Incentive Plan (the "Plan") and the
corresponding Stock Option Agreement contemplated by the Plan (the "Option
Agreement"), as well as paragraphs 3 (d) and 5 (f), below.

        (i) Vesting of Options. EXECUTIVE'S incentive stock options described
above shall vest according to the following schedule:

        25% (7,812.5) of the option shares shall vest and be subject to exercise
        immediately upon EXECUTIVE's commencement of employment under this
        Agreement, provided, however, that if EXECUTIVE voluntarily resigns or
        is terminated for cause under this Agreement prior to his completion of
        one year of service pursuant to this Agreement, COMPANY shall have the
        right, for ninety (90) days immediately following the effective date of
        such resignation or termination, to repurchase any shares acquired by
        EXECUTIVE through the exercise of such options at the price EXECUTIVE
        paid for such shares, and any such options that EXECUTIVE has not yet
        exercised shall be null and void. EXECUTIVE agrees to execute such
        documents as are necessary to effect COMPANY's repurchase of those
        shares.

        The remaining 23,437.5 option shares shall vest and be subject to
        exercise at the rate of 651 shares for each full month that EXECUTIVE'S
        employment continues under this Agreement after the first anniversary
        hereunder. The number of shares


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        to vest each month and the maximum number of shares that may vest
        hereunder is subject to adjustment pursuant to subparagraph (iv) of this
        paragraph 3 (d).

               (ii) Change in control. Upon a "change in control" (as defined
below), 50% of the total share options granted to EXECUTIVE under paragraph 3
(c), above, that have not yet vested as of the effective date of such change in
control shall vest on the effective date of the change in control. Subject to
provisions regarding termination of EXECUTIVE'S employment for cause hereunder,
the remaining 50% of such unvested share options shall vest at the rate of 1/12
upon the completion of each full month of employment thereafter, unless such
share options would vest sooner pursuant to some other provision of this
Agreement, in which event the schedule which results in the earlier vesting
shall apply. In the event that, within the first twelve (12) months from the
effective date of a change in control, EXECUTIVE's employment is terminated
without cause or EXECUTIVE's duties as Executive Vice President are
significantly changed, the balance of the option shares granted to EXECUTIVE
under this Agreement that have not vested as of the date of such termination or
significant change in duties shall vest immediately. "Change in control" shall
mean the first to occur of: 1) a merger of COMPANY into, or a consolidation or
other reorganization of COMPANY with, another person or business entity with the
result that less than fifty percent (50%) of the directors of the resulting
business entity immediately following the merger, consolidation or other
reorganization were directors of COMPANY immediately prior to the merger,
consolidation or other reorganization; or 2) a sale by COMPANY of more than
fifty




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percent (50%) of its assets (as measured at the time of the agreement to sell);
or 3) any event or events following the reconstitution of the Board of Directors
of COMPANY in connection with the sale of Series C and/or Series D Preferred
Stock of COMPANY (the "Preferred Stock Placement") as a result of which the
persons constituting the Board of Directors as a result of such Preferred Stock
Placement reconstitution cease to be at least 50% of the directors of COMPANY,
provided, however, that any member of the Board of Directors of COMPANY whose
election or nomination for election by the shareholders of COMPANY was approved
by the vote of at least a majority of the individuals then constituting the
Board of Directors shall be considered to have been a member of the Board of
Directors immediately after the reconstitution of the Board following the
Preferred Stock Placement; or 4) a transaction or series of transactions by
which more than 50% of the voting equity securities of COMPANY come to be under
the control of a single entity or a group of entities acting in concert to
acquire control of COMPANY, but specifically excluding any change in ownership
that results from an initial public offering of COMPANY'S voting equity
securities that is authorized or approved by COMPANY's Board of Directors.

               (iii) Other Acceleration of Vesting; Other Terms. The
acceleration of vesting provided for in the preceding paragraph is in addition
to, and not in lieu of, the acceleration of vesting of stock options provided
for under the Plan or the Option Agreement under the circumstances described in
the Plan or the Option




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Agreement. In addition, the Option Agreement shall 1) provide for incentive
stock options to the extent consistent with the terms of the options, 2) provide
for a ten-year term, 3) afford the option holder the maximum period permitted by
the Plan after termination of EXECUTIVE's employment to exercise options, 4)
afford the option holder the greatest latitude in manner of exercise permitted
by the Plan, 5) not grant COMPANY repurchase rights other than as set forth in
this Agreement, and 6) otherwise be in substantially the form of the standard
form of stock option agreement under the Plan, subject to the terms set forth in
this Agreement.

        (iv) Protection against Dilution. The number of options granted to
EXECUTIVE under this Agreement shall be adjusted, if necessary, so that the
number is equal to 1.7% of COMPANY's outstanding Common Stock on a fully
diluted, as exercised and as converted basis, taking into account all rights and
options to acquire (by exercise, conversion or otherwise) shares of Common Stock
(the "Minimum Percentage"). The number of shares of Common Stock equaling the
Minimum Percentage shall be determined prior to, and without regard to,
COMPANY's issuance of any shares, options, warrants or other rights convertible
into shares of Common Stock in, or in connection with, either a) an initial
public offering of its Common Stock or other equity securities of COMPANY
convertible into Common Stock or b) a change in control as described in
subparagraph 3(d)(ii), above, including as to both of the foregoing events any
shares, options, warrants or other rights convertible into shares of Common
Stock that are issued as compensation to brokers, underwriters or other persons
involved, directly or indirectly, in arranging such public offering or change in
control. COMPANY represents to EXECUTIVE that the share options granted to the
Chief Executive Officer of COMPANY equal 3.4% of COMPANY's outstanding Common
Stock on a fully diluted, as exercised and as converted basis, taking into
account all rights and options to acquire (by exercise, conversion or otherwise)
shares of Common Stock. Any options granted to EXECUTIVE pursuant to this
subparagraph 3(c)(iv) shall be subject to the same provisions as those
originally granted under paragraph 3(c), above, except that the




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exercise price of any additional options granted to EXECUTIVE pursuant to this
provision shall be equal to the fair market value of the Common Stock of Company
at the date of the grant, taking into consideration the effect of the stock
issuance(s), if any, that trigger application of this provision.

        (v) Additional Options. In the event that, prior to the initial public
offering of COMPANY's Common Stock, COMPANY's Board of Directors authorizes an
increase in the options granted to the executive officers of COMPANY generally,
EXECUTIVE shall receive additional options at least equal to 50% of such
additional options granted, if any, to the Chief Executive Officer of COMPANY,
such options to be subject to the vesting requirements and other terms and
conditions as the Board of Directors may apply. This subparagraph 3(d)(v) shall
not apply to any grant of additional options to EXECUTIVE under subparagraph
3(d)(iv), above; in that circumstance, those additional options shall have the
same terms as the share options originally granted under paragraph 3(c), above,
as though granted with those original options.

        (vi) Securities Registration. COMPANY shall cause all of EXECUTIVE's
share options, and the issuance of shares upon exercise thereof, to be included
in an effective registration statement on Form S-8 (or any successor form) under
the Securities Act of 1933, as amended, within 180 days after the initial
registered public offering of COMPANY's. Common Stock or other equity securities
convertible into Common Stock.

4.      Participation in Benefit Plans, Reimbursement of Business Expenses and
        Moving Expenses.

        (a) Benefit Plans. During the term of this Agreement, EXECUTIVE shall be
provided with medical insurance, vacation benefits, sick leave benefits, and
holidays


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which are not less than, and on terms no less favorable than, COMPANY provides
to its other executive employees.

        (b) Reimbursement of Business Expenses. COMPANY shall reimburse
EXECUTIVE promptly for all expenditures made by him during the term of this
Agreement, which expenses are incurred to further the business and interests of
COMPANY, including, but not limited to, travel, entertainment, parking and
expenses incurred in connection with business meetings (including, but not
limited to, the dues and business related expenses of memberships at appropriate
business clubs, provided such memberships are approved in writing by the Chief
Executive Officer of COMPANY), provided such expenses are incurred and submitted
for reimbursement in accordance with the policies established by the Board of
Directors in effect as of the date the expenses are incurred.

        (c) Moving Expenses. If EXECUTIVE relocates, COMPANY shall reimburse
EXECUTIVE for all actual relocation expenses, up to a maximum of $130,000.00
for EXECUTIVE's relocation to the San Diego area in accordance with the terms of
the Relocation Benefits Agreement, which Agreement is attached hereto as
Appendix A. Any amounts paid to EXECUTIVE to compensate him for taxes on amounts
received by him hereunder which are not tax deductible shall be subject to, not
in addition to, the limit of $130,000 set forth in the preceding sentence.

        (d) Legal Expenses. COMPANY will reimburse EXECUTIVE for actual legal
fees and expenses incurred by him in connection with the review and negotiation
of this Agreement, up to a maximum of $2,000.

        (e) Indemnification. EXECUTIVE shall be entitled to indemnification and
advancement of expenses to the fullest extent provided, in COMPANY's bylaws or


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otherwise, to any other director or executive officer of COMPANY, unless
prohibited by law. EXECUTIVE shall also be entitled to coverage under each
directors' and officers' liability insurance policy, if any, maintained by or on
behalf COMPANY's directors and officers.

5.      Termination of Employment.

        (a) Automatic Termination. This Agreement will automatically terminate
in the event of EXECUTIVE's death, or EXECUTIVE's disability which has prevented
EXECUTIVE from performing substantially all of his duties and responsibilities
for a continuous period of ninety (90) days. COMPANY shall have no further
obligations to EXECUTIVE or his estate upon such automatic termination, except
(i) to honor the exercise of any stock options that have vested prior to or as
of the date of such termination, subject to the applicable conditions of the
Plan and (ii) as provided by law or under the terms of any applicable benefit
plan in which EXECUTIVE participated immediately prior to the termination of his
employment.

        (b) Termination other than for Cause. COMPANY may terminate or elect not
to renew this Agreement other than for cause at any time, provided it gives at
least ten (10) days' prior written notice to EXECUTIVE of such termination or
non-renewal. In the event that COMPANY terminates EXECUTIVE's employment under
this Agreement other than for cause during the first year of this Agreement or
COMPANY elects not to renew this Agreement for a second year, COMPANY shall,
subject to the conditions set forth in paragraph 6(b), below, continue to pay
EXECUTIVE his base salary and continue to provide EXECUTIVE (and his covered
dependents, if any), at COMPANY's



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expense, medical insurance or benefits, in each case, at the level in effect at
the time COMPANY gives EXECUTIVE notice of termination or non-renewal, for a
period of 18 months following the effective date of the termination or
non-renewal. If COMPANY terminates this Agreement without cause after EXECUTIVE
has reached his second anniversary date of employment or fails to renew this
Agreement for a third or subsequent year, COMPANY shall, subject to the
conditions set forth in paragraph 6(b), below, continue to pay EXECUTIVE his
base salary, and continue to provide EXECUTIVE (and his covered dependents, if
any), at COMPANY's expense, medical insurance or benefits, in each case, at the
level in effect at the time COMPANY gives EXECUTIVE notice of termination or
non-renewal, for a period of twelve (12) months following the effective date of
termination or non-renewal. In addition to the foregoing salary and benefits
continuation, EXECUTIVE shall also receive any unpaid salary and accrued (but
unused) vacation through the effective date of termination of employment or
non-renewal, reimbursement for any expenses incurred by him prior to the
effective date of his termination that are otherwise subject to reimbursement
under paragraph 3(b), above, and any accrued but unpaid benefits to which
EXECUTIVE is then entitled under the terms of COMPANY's benefit plans and
policies in which EXECUTIVE is enrolled, to be payable in accordance with the
terms of such plans and policies. All salary continuation and other termination
benefits paid hereunder shall be less any applicable payroll and withholding
taxes or other legally required deductions. As a condition to his receipt of any
salary continuation provided for in this paragraph, EXECUTIVE must first execute
the Waiver and Release that is attached to this Agreement as Appendix B. The
salary continuation for EXECUTIVE shall be paid in the same manner and at the
same intervals as if EXECUTIVE continued his employment during the applicable
period.




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COMPANY reserves the right to pay the applicable salary continuation amount in a
lump sum, discounted to present value using a discount factor of 6%. In the
event of any termination or non-renewal under this paragraph, EXECUTIVE shall
have no obligation to mitigate his damages or to seek other employment as a
condition to receiving his salary continuation and other termination benefits,
and (except as provided for in paragraphs 6(b), below), there shall be no
deduction or offset against amounts due to EXECUTIVE hereunder on account of any
remuneration from any subsequent employment (or self-employment) that he may
obtain.

        (c) Termination for Cause. Notwithstanding the provisions of
sub-paragraph 5(b), COMPANY may terminate EXECUTIVE's employment for cause. For
purposes of this Agreement, COMPANY shall have "cause" to terminate EXECUTIVE's
employment in the event of any of the following:

        (i)     conviction of EXECUTIVE for any felony or any crime, or entry of
                a plea of nolo contendere, involving moral turpitude or
                dishonesty;

        (ii)    EXECUTIVE's participation in a fraud or act of dishonesty
                against COMPANY;

        (iii)   EXECUTIVE's willful misfeasance or nonfeasance of duty that
                materially injures the reputation, business or business
                relationships of COMPANY or any of its officers, directors or
                affiliates;

        (iv)    a material breach by EXECUTIVE of any term of this Agreement or
                the Proprietary Information and Inventions Agreement that
                EXECUTIVE has entered into with the Company, or any of the
                Company's written policies and procedures; or

        (v)     conduct by EXECUTIVE that in the good faith and reasonable
                determination of the COMPANY's Board of Directors demonstrates
                gross unfitness to


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                serve. Physical of mental disability or conduct resulting from
                physical or mental disability of EXECUTIVE shall not constitute
                "cause."

In the event EXECUTIVE's employment is terminated for cause, he will not be
entitled to receive any severance pay or any other severance compensation,
except that EXECUTIVE shall be entitled to receive unpaid salary and accrued
(but unused) vacation through the effective date of termination, reimbursement
for any expenses incurred by him prior to the effective date of his termination
that are otherwise subject to reimbursement under paragraph 3(b), above, and any
accrued but unpaid benefits to which EXECUTIVE is then entitled under the terms
of COMPANY's benefit plans and policies in which EXECUTIVE is enrolled, to be
payable in accordance with the terms of such plans and policies.

        (d) Resignation. EXECUTIVE retains the right to resign or otherwise
voluntarily terminate his employment with COMPANY upon ninety (90) days' written
notice to the Chief Executive Officer. In the event EXECUTIVE resigns or
otherwise voluntarily terminates his employment with COMPANY, EXECUTIVE shall
not be entitled to any compensation, including benefits, beyond the effective
date of his resignation, except that EXECUTIVE shall be entitled to receive
salary and accrued vacation through the effective date of termination of
employment, reimbursement for any expenses incurred by him prior to the
effective date of his termination that are otherwise subject to reimbursement
under paragraph 3(b), above, and any accrued but unpaid benefits to which
EXECUTIVE is then entitled under the terms of COMPANY's benefit plans and
policies in which EXECUTIVE is enrolled, to be payable in accordance with the
terms of such plans and policies.




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        (e) Stock Options. Subject to the previsions of paragraph 3(c), above,
only the shares subject to the stock options granted to EXECUTIVE under this
Agreement that have vested up to the date of the termination of or his
resignation from his employment under this Agreement may be exercised by
EXECUTIVE, such exercise to be subject to the conditions set forth in the Plan,
provided, however, that in the event of termination by COMPANY other than for
cause or any annual non-renewal by COMPANY, those options that would have vested
over the twelve (12) months subsequent to the termination had EXECUTIVE's
employment continued will be deemed to have vested as of the date of the
termination. Any stock options that are unvested (and not deemed vested under
some provision of this Agreement, the Plan or the Option Agreement as of the
date of EXECUTIVE's termination) shall be null and void.

        (f) No Restriction on COBRA Rights. Nothing in this paragraph 5 shall be
deemed to impair or limit any of EXECUTIVE's rights under the Consolidated
Omnibus Benefits Reconciliation Act.

        (g) Deemed Termination. EXECUTIVE may elect to deem (i) any material
decrease in his authority or responsibility; (ii) elimination of his reporting
directly to the Chief Executive Officer of COMPANY; or (iii) any obligation that
EXECUTIVE relocate his residence away from Tulsa, Oklahoma as a condition of his
continuing his employment with COMPANY (in any case, whether or not Executive's
position is changed) to be a termination of EXECUTIVE's employment by COMPANY
other than for cause for all purposes under this Agreement, provided EXECUTIVE
so notifies the Chief Executive Officer of COMPANY of his election to do so
within ninety



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        (90) days of EXECUTIVE's receipt of notice from COMPANY or other
        knowledge of EXECUTIVE of such change or event.

6.      Noncompetition, Confidentiality, Freedom to Enter into and Perform and
        Conflicts of Interest.

        (a) Confidential Information. EXECUTIVE agrees and understands that, due
to the nature of his position with COMPANY, he will gain possession of
confidential information about COMPANY and the way it conducts its business. In
conjunction with the execution of, and as part of the consideration given for,
this Agreement, EXECUTIVE will execute the Proprietary Information and
Inventions Agreement that is attached to this Agreement as Appendix C.
EXECUTIVE's duties and obligations under Appendix C shall survive termination of
his employment with COMPANY. EXECUTIVE acknowledges that a remedy at law for any
breach or overtly threatened breach by him of the provisions of Appendix C would
be inadequate to protect COMPANY against the consequences of such breach, and he
therefore agrees that the COMPANY shall be entitled to injunctive relief in case
of any such breach or overtly threatened breach.

        (b) Restrictive Covenant. During any period that EXECUTIVE is receiving
severance compensation from COMPANY following the termination date of
EXECUTIVE's employment under this Agreement, EXECUTIVE shall not, without first
obtaining the prior written approval of COMPANY, directly or indirectly engage
in any activities in competition with COMPANY, or become an officer, director or
employee of, or consultant to, a business engaged in competition with COMPANY's
current business (specifically, any person or entity whose principal business is
promoting and facilitating via the Internet transactions between third parties
for the wholesale sale and distribution of goods, equipment and services in the
healthcare field)



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and such other business or businesses in which COMPANY comes to be actively
engaged during the term of EXECUTIVE'S employment under this Agreement. In the
event that EXECUTIVE undertakes any such activities without written permission
from COMPANY, COMPANY'S obligation to pay EXECUTIVE severance compensation shall
cease. For purposes of this Agreement, "healthcare field" means the provision of
goods and/or services to any person, firm, corporation, business, partnership,
limited liability company, association or other entity involved directly in the
healthcare industry and/or to any person with respect to their medical or
healthcare needs, including, without limitation, hospital, surgical centers,
medical clinics, outpatient facilities, medical groups, managed care
organizations, health maintenance organizations, medical or health related
associations, nursing homes, extended care facilities, doctors, physicians,
dentists, chiropractors, veterinarians and other healthcare providers,
practitioners, suppliers, patients or any other person providing or receiving
healthcare service of any nature whatsoever.

        (c) Freedom to Enter into and Perform this Agreement. EXECUTIVE
represents and warrants to Company that he is subject to no restrictions, either
by virtue of any agreement made by him or for his benefit, or by operation of
law, that would prohibit, prevent or interfere with in any way his entering
into, or his performing fully and without restriction, his obligations under
this Agreement, or which would render COMPANY liable to a third party as a
result of EXECUTIVE's entering into or performing his obligations under this
Agreement.

        (d) Conflicts of Interest. During EXECUTIVE's employment under this
Agreement EXECUTIVE agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest known by him to be adverse or
antagonistic to COMPANY, its business or prospects, financial or otherwise.
However, EXECUTIVE may own, as a passive investor only,


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securities of any publicly traded companies, provided his beneficial ownership
of the stock of any one such corporation does not exceed 12.5% of such
corporation's voting stock.

        (e) Non-interference. While employed by COMPANY, and for a period of one
(1) year immediately following the termination of his employment, EXECUTIVE will
not interfere with the business of COMPANY by soliciting, attempting to solicit,
inducing or otherwise deliberately causing any employee of COMPANY to terminate
his or her employment in order to become an employee, consultant or contractor
to or for any competitor of COMPANY.

        7. Notices.

        For purposes of this Agreement, all notices and other communications
required or permitted by this Agreement shall be in writing and shall be deemed
to have been duly given when delivered in person or by courier or on the earlier
of delivery or the fourth business day after mailing by United States Registered
or Certified Mail, return receipt requested, postage prepaid, addressed as
follows:

     If to EXECUTIVE:         Mr. James L. Hersma
                              4100 West 86th Street
                              Tulsa, Oklahoma 74132


     If to COMPANY:           medibuy.com, Inc.
                              7777 Alvarado Road, Suite 401
                              LaMesa, California 91941

                              Attn: The Chief Executive Officer

or at such other address as the addressee may have furnished to the other party
in writing subsequent to the execution of this Agreement or, in the case of
EXECUTIVE, to any other permanent address listed for him in COMPANY's records,
or, in the case of COMPANY, to the


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address known by EXECUTIVE to be where the office of the Chief Executive Officer
of COMPANY is located.

        8. Modifications; Waivers; Applicable Law.

        No provision in this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in a writing, signed
by EXECUTIVE and by the Chief Executive Officer of COMPANY. This Agreement and
the employment relationship hereunder shall be governed by, construed in
accordance with and enforced under the laws of the State of California and
applicable federal law.

        9. Severability.

        If any provision of this Agreement is determined to be invalid or is in
any way modified by any governmental agency, tribunal, or court of competent
jurisdiction, such determination shall be considered as a separate, distinct,
and independent part of this Agreement and shall not affect the validity or
enforceability of any of the remaining provisions of this Agreement.

        10. Successor Rights and Assignment.

        This Agreement shall bind, inure to the benefit of and be enforceable by
EXECUTIVE's personal or legal representatives, executors, administrators,
successors, heirs, distributees, and legatees. The rights and obligations of
COMPANY under this Agreement may be assigned by COMPANY as part of the
assignment or transfer (including, without limitation, by merger or other event
resulting in such assignment by operation of law) of all or substantially all of
COMPANY'S assets and business, provided that at the time of such assignment the
assignee has the ability to meet the obligations to EXECUTIVE set forth in this
Agreement, in which event this Agreement shall be binding upon, and inure to the
benefit of, the person(s) or entity(ies) to



<PAGE>   18
whom it is assigned. EXECUTIVE may not assign his duties hereunder and he may
not assign any of his rights hereunder without the written consent of COMPANY.

        IN WITNESS WHEREOF, EXECUTIVE and COMPANY have signed this Agreement to
be dated and effective on May 26, 1999.

                                   EXECUTIVE:

Dated:                             /s/ JAMES L. HERSMA


                                   MEDIBUY.COM, INC.

Dated:                             By: /s/ DENNIS J. MURPHY
                                   Its:   CEO


<PAGE>   19
                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


         THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is
entered into as of December 28, 1999 (the "Effective Date"), by and between
MEDIBUY.COM, INC., a Delaware corporation (the "Company") and JAMES L. HERSMA
("Executive").

         WHEREAS, the Company and Executive previously entered into an
Employment Agreement, dated May 26, 1999 (the "Employment Agreement"); and

         WHEREAS, the parties desire to amend the Employment Agreement as set
forth in this Amendment.

         NOW THEREFORE, in consideration of the mutual benefits contained
herein, the parties, intending to be legally bound, hereby agree as follows:

         1. Except as otherwise defined herein, capitalized terms used but not
defined herein shall have the meanings given to them in the Employment
Agreement.

         2. The Employment Agreement is hereby amended as follows:

                  (a) Section 3(c)(iv) ("Protection Against Dilution") is
deleted in its entirety. In addition, in consideration of such deletion the
Company shall grant to Executive a fully vested, immediately exercisable
incentive stock option to purchase 75,000 shares of Common Stock under the
Company's 1999 Omnibus Equity Plan.

         3. For purposes of clarification, the parties agree that the vesting
schedule of the stock option granted to Executive by the Company on November 17,
1999 is as follows:

                        25% of the shares (or 8,125 shares) are fully vested and
                  immediately exercisable upon grant (provided that the Company
                  will have the right to repurchase from Mr. Hersma if his
                  employment is terminated for cause or if he voluntarily
                  terminates his employment, within his first year of
                  employment, as more fully described in Section 3(c)(i) of the
                  Agreement, and the remaining shares subject to the option will
                  vest in equal monthly portions over 36 months beginning on
                  June 26, 2000.

         4. This Amendment shall be governed by and construed in accordance with
the laws of the State of California as such laws are applied to contracts
entered into and performed entirely within California by California residents.

         5. This Amendment may be signed in any number of counterparts, each of
which will be deemed an original, and all of which taken together shall
constitute one and the same instrument.

         6. Except as specifically amended hereby, the Employment Agreement
shall remain in full force and effect. This Amendment together with the
Employment Agreement constitutes the entire understanding and agreement of the
parties hereto with respect to the subject matter


                                       1.
<PAGE>   20

hereof and thereof and supersedes all prior agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect to the subject matter hereof or thereof.

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


                                            MEDIBUY.COM, INC.


/s/ JAMES L. HERSMA
----------------------                      By: /s/ DENNIS J. MURPHY
JAMES L. HERSMA                                --------------------------------
                                            Name: Dennis J. Murphy
                                                -------------------------------
                                            Title: President & Chief Executive
                                                   Officer
                                                -------------------------------



                                       2.

<PAGE>   21
\



                       AMENDMENT TO EMPLOYMENT AGREEMENT

        THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into effective as of January 28, 2000 by and between MEDIBUY.COM, INC.,
a Delaware corporation (the "Company") and JAMES L. HERSMA ("Executive").

        A. Executive is the EXECUTIVE VICE PRESIDENT OF MARKET DEVELOPMENT of
the Company pursuant to an employment agreement dated as of MAY 26, 1999, as
amended (the "Employment Agreement"); and

        B. Because of Executive's intimate knowledge of the business of the
Company, the Company and Executive desire to amend the Employment Agreement to
provide for a consulting agreement between the Company and Executive upon
Executive's termination of employment.

        NOW, THEREFORE, in consideration of the above facts and the mutual
promises set forth in this Agreement, the parties agree as follows:

1.      AMENDMENT OF EMPLOYMENT AGREEMENT.

        1.1 The parties agree to replace the provisions relating to severance
payments with the Consulting Agreement and terms as contemplated in this
Amendment.

        1.2 Section 5(b) of the Employment Agreement is hereby amended and
replaced in its entirety by the following:

               "Termination Not for Cause. In the event that COMPANY terminates
               this Agreement without cause, then upon EXECUTIVE furnishing
               COMPANY with an executed Waiver and Release (in the form attached
               hereto as Appendix B), COMPANY and EXECUTIVE shall then each
               execute and deliver a Consulting Agreement in the form attached
               hereto as EXHIBIT A. Notwithstanding the foregoing, if any party
               fails to deliver an executed copy of the Consulting Agreement,
               such agreement shall be deemed to be entered into by both parties
               and shall continue in full force and effect. The parties
               acknowledge that EXECUTIVE shall not be entitled to any payment
               or benefit under the Consulting Agreement unless EXECUTIVE shall
               first execute the Waiver and Release."

        1.3 The heading for Section 6 of the Employment Agreement is hereby
modified and replaced in its entirety by the following:

               "Confidentiality, Conflicts of Interest and Non-Interference."

        1.4 Section 6(b) ("Restrictive Covenant") of the Employment Agreement is
hereby deleted from the Employment Agreement and replaced with the following:
"[Deleted]"

        1.5 Except as expressly modified hereby, all of the terms of the
Employment Agreement shall continue in full force and effect.



                                       1.
<PAGE>   22

2. GOVERNING LAW. This Agreement is made in San Diego, California and shall be
interpreted and enforced under the internal laws of the State of California.

3. ENTIRE AGREEMENT. This Agreement and any agreements referenced herein
constitute the entire agreement between the parties and may be waived, modified
or amended only by an agreement in writing signed by both parties.

4. ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. This Agreement
may not be assigned by Executive. This Agreement may not be assigned by the
Company except in connection with a merger of the Company or pursuant to the
sale, transfer or other conveyance of all or substantially all of the assets of
the Company.

5. WAIVER. No covenant, term or condition of this Agreement or breach thereof
shall be deemed waived unless the waiver is in writing, signed by the party
against whom enforcement is sought, and any waiver shall not be deemed to be a
waiver of any preceding or succeeding breach of the same or any other covenant,
term or condition.

6. NOTICE. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given if delivered personally or sent by certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses or to such
other address as either party to this Agreement shall specify by notice to the
other:

               If to the Company:

                      Chairman of the Board
                      medibuy.com, Inc.
                      10120 Pacific Heights Boulevard, Suite 100
                      San Diego, California  92121

               If to Executive:

                      James L. Hersma
                      4100 West 86th Street
                      Tulsa, OK 74132

7. HEADINGS. Headings or captions of paragraphs or sections of this Agreement
are for convenience of reference only and shall not be considered in the
interpretation of this Agreement.

8. COUNTERPART. This Agreements may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.

9. ATTORNEY CONSULTATION. Each party has been informed of his/her/its right to
consult with his/her/its attorney prior to signing this Agreement and has either
done so or has considered the matter and decided not to do so.



                                       2.
<PAGE>   23

        IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO
EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.

                                        The Company:

                                        MEDIBUY.COM, INC.
                                        a Delaware corporation


                                        By: /s/ Dennis J. Murphy
                                            ------------------------------------
                                        Name: Dennis J. Murphy
                                              ----------------------------------
                                        Title: CEO
                                               ---------------------------------


                                        Executive:


                                        /s/ James L. Hersma
                                        ----------------------------------------
                                        2/18/00
                                        -------------------



                                       3.
<PAGE>   24

                                    EXHIBIT A

                              CONSULTING AGREEMENT


        THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
effective as of ________________, 200__ by and between MEDIBUY.COM, INC., a
Delaware corporation (the "Company") and JAMES L. HERSMA ("Consultant").

        A. Consultant and the Company previously entered into an employment
agreement dated as of _____________, as amended (the "Employment Agreement");
and

        B. Consultant and the Company desire to enter into a consultancy
arrangement upon the terms set forth in this Agreement.

        NOW, THEREFORE, in consideration of the above facts and the mutual
promises set forth in this Agreement, the parties agree as follows:

1.      CONSULTING.

        1.1 In consideration for the promises and covenants set forth herein,
for the period (the "Engagement Period") beginning on the effective date of
Consultant's termination of employment under the Employment Agreement (the
"Consulting Date") and ending on the date one year after the Consulting Date,
the Company and Consultant agree that Consultant shall perform the services and
undertake the duties and responsibilities set forth in Schedule A attached
hereto and incorporated herein (collectively, the "Services"). Consultant shall
render the Services under the terms and conditions set forth in this Agreement.

        1.2 During the Engagement Period, Consultant will not be considered an
agent or an employee of the Company; Consultant will not have authority to make
any representation, contract, or commitment on behalf of the Company and
Consultant agrees not to do so; and Consultant will not be entitled to any of
the benefits which the Company may make available to its employees, such as
group insurance, profit sharing, or retirement benefits.

        1.3 During the Engagement Period, Consultant will be solely responsible
for all tax returns and payments to any federal, state, or local tax authority
with respect to Consultant's performance of services and the receipt of fees or
other compensation and benefits under this Agreement. The Company will report
amounts paid to Consultant by filing Form 1099-MISC with the Internal Revenue
Service as required by law. The Company will not: make withholdings or
deductions from Consultant's payment checks; make contributions for Social
Security, employment insurance or disability insurance; or obtain workers'
compensation insurance on Consultant's behalf. During the Engagement Period,
Consultant shall comply with all applicable state and federal laws governing
self-employed individuals, including obligations such as payment of taxes,
Social Security, disability and other contributions based on compensation and
benefits paid to Consultant under this Agreement. Consultant hereby indemnifies
the Company against any and all such taxes or contributions, including penalties
and interest.



                                       1.
<PAGE>   25

        1.4 During the Engagement Period, subject to the terms and restrictions
of this Agreement, Consultant may engage in employment, consulting or other work
relationships in addition to Consultant's work for the Company. The Company
agrees to make reasonable arrangements to enable Consultant to perform
Consultant's consulting services for the Company at such times and in such a
manner so that it does not unreasonably interfere with other work activities in
which Consultant may engage.

2. TERM. The term of this Agreement (the "Term") shall commence upon the
Consulting Date. This Agreement shall remain in full force and effect until
completion of the Engagement Period.

3. CONSULTING FEES. As payment for the Services, Consultant shall receive cash
fees as set forth in Schedule B attached hereto and incorporated herein, which
shall constitute complete payment for the Services.

4. NO OTHER BENEFITS. During the Term, Consultant shall not be entitled to any
other compensation or benefits, including benefits provided generally to
employees of the Company, and Consultant's compensation shall not be subject to
withholding, unless, in the Company's view, withholding is required by
applicable law.

5. CONFIDENTIAL INFORMATION. In connection with the performance of Services
under the Employment Agreement and this Agreement, Consultant may become
familiar with trade secrets and confidential information of the Company (which
shall include all trade secrets and work product resulting from Consultant's
provision of the Services to the Company), which derive independent economic
value, actual or potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure or use
("Confidential Information"). Except as may be reasonably necessary while
providing the Services, Consultant agrees that, during the Term of this
Agreement and thereafter, Consultant and any agents and employees of Consultant
will not disclose or utilize any of the Confidential Information (including
without limitation techniques, designs, buying plans, drawings, leases, store
designs, rollout plans, developments, equipment, prototypes, sales, supplier and
customer information and relationships, and business and financial information
relating to the business, products, practices and techniques of the Company) to
which Consultant has been privy, unless Consultant becomes legally required to
disclose any such Confidential Information, in which event Consultant shall
provide the Company with prompt notice thereof so that the Company may seek a
protective order or other appropriate remedy. Upon the termination of this
Agreement, Consultant shall deliver to the Company all equipment, notes,
documents, memoranda, reports, files, books, correspondence, lists or other
written or graphic records and the like belonging to the company which are or
have been in Consultant's possession or control.

6. PRESERVATION OF CONFIDENTIAL INFORMATION; NONCOMPETITION.

        6.1 Consultant agrees that, in order to protect the Confidential
Information of the Company and in consideration of the fees received hereunder,
during the Term of this Agreement, Consultant shall not, without first obtaining
the prior written approval of the Company, directly or indirectly engage in any
activities in competition with the Company, or become an officer, director or
employee of, or consultant to, or investor in, a business engaged in



                                       2.
<PAGE>   26

competition with the Company's current business (specifically, any person or
entity whose principal business is promoting and facilitating via the Internet
transactions between third parties for the wholesale sale and distribution of
goods, equipment and services in the healthcare field) and such other business
or businesses in which the Company comes to be actively engaged during the term
of Consultant's employment with the Company under the Employment Agreement. For
purposes of this agreement, "healthcare field" means the provision of goods
and/or services to any person, firm, corporation, business, partnership, limited
liability company, association or other entity involved directly in the
healthcare industry and/or to any person with respect to their medical or
healthcare needs, including, without limitation, hospitals, surgical centers,
medical clinics, outpatient facilities, medical groups, managed care
organizations, health maintenance organizations, medical or health related
associations, nursing homes, extended care facilities, doctors, physicians,
dentists, chiropractors, veterinarians and other healthcare providers,
practitioners, suppliers, patients or any other person providing or receiving
healthcare service of any nature whatsoever.

        6.2 Ownership by Consultant, as a passive investment, of less than one
percent (1%) of the outstanding shares of capital stock of any corporation with
one or more classes of its capital stock listed on a national securities
exchange or publicly traded in the over-the-counter market shall not constitute
a breach of this Section 6.

7. SEVERABILITY. To the extent any provision of this Agreement shall be
adjudicated to be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected, such deletion to apply only with respect to the operation of this
Agreement in the particular jurisdiction in which such adjudication is made. In
furtherance and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law, then such provision shall be construed to cover only the duration, extent
or activities which may validly and enforceably be covered.

8. REMEDIES. In any event of a breach of Consultant's obligations under this
Agreement, Consultant agrees that (a) any and all proceeds, funds, payments and
proprietary interests, of every kind and description, arising from, or
attributable to, such breach shall be the sole and exclusive property of the
Company and (b) the Company shall be entitled to recover any additional actual
damages incurred as a result of such breach.

9. INJUNCTIVE RELIEF. Consultant understands and agrees that the Company could
not be reasonably or adequately compensated in damages in an action at law for
Consultant's breach of his obligations under this Agreement. Accordingly,
Consultant specifically agrees that the Company shall be entitled to an
injunction enjoining Consultant or any person or persons acting for or with
Consultant in any capacity whatsoever from violating any of the terms herein.
This provision with respect to injunctive relief shall not diminish the right of
the Company to claim and recover damages pursuant to Section 9 in addition to
injunctive relief.

10. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants that (a)
Consultant is not restricted or prohibited, contractually or otherwise, from
entering into and performing each of the terms and covenants contained in this
Agreement, and (b) Consultant's



                                       3.
<PAGE>   27

execution and performance of this Agreement is not a violation or breach of any
other agreement to which Consultant is a party.

11. GOVERNING LAW. This Agreement is made in San Diego, California and shall be
interpreted and enforced under the internal laws of the State of California.

12. ENTIRE AGREEMENT. This Agreement and any agreements referenced herein
constitute the entire agreement between the parties and may be waived, modified
or amended only by an agreement in writing signed by both parties.

13. ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. This Agreement
may not be assigned by Consultant. This Agreement may not be assigned by the
Company except in connection with a merger of the Company or pursuant to the
sale, transfer or other conveyance of all or substantially all of the assets of
the Company.

14. WAIVER. No covenant, term or condition of this Agreement or breach thereof
shall be deemed waived unless the waiver is in writing, signed by the party
against whom enforcement is sought, and any waiver shall not be deemed to be a
waiver of any preceding or succeeding breach of the same or any other covenant,
term or condition.

15. NOTICE. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given if delivered personally or sent by certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses or to such
other address as either party to this Agreement shall specify by notice to the
other:

               If to the Company:

                      Chairman of the Board
                      medibuy.com, Inc.
                      10120 Pacific Heights Boulevard, Suite 100
                      San Diego, California  92121

               If to Executive:

                      --------------------
                      --------------------
                      --------------------

16. HEADINGS. Headings or captions of paragraphs or sections of this Agreement
are for convenience of reference only and shall not be considered in the
interpretation of this Agreement.

17. COUNTERPART. This Agreements may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.



                                       4.
<PAGE>   28

18. ATTORNEY CONSULTATION. Each party has been informed of his/her/its right to
consult with his/her/its attorney prior to signing this Agreement and has either
done so or has considered the matter and decided not to do so.

        IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO
EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.

                                        The Company:

                                        MEDIBUY.COM, INC.
                                        a Delaware corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        Consultant:


                                        /s/ James L. Hersma
                                        ----------------------------------------
                                        2/18/00
                                        -------------------



                                       5.
<PAGE>   29

                                   SCHEDULE A


                      SERVICES, DUTIES AND RESPONSIBILITIES

        During the Term, Consultant shall, upon request, consult with the
Company by telephone, by mail and in person from time to time on a part-time
basis during regular business hours. The consultation shall concern the
management, operation, marketing, sales, purchasing, technology, financing and
other aspects of the business of the Company, and may include Consultant's
direct contacting of third parties at the reasonable request of the Company.



                                       1.
<PAGE>   30

                                   SCHEDULE B


                           CONSULTING FEE AND BENEFITS

        The Company shall pay to Consultant for the Services an annual amount
equal to the sum of:

               (i) an amount equal to the annual salary of Consultant in effect
               at the time of termination under the Employment Agreement (the
               "Consulting Fee") plus

               (ii) to the extent the payment of the amount described in (i)
               above is subject to state or federal taxation beyond that to
               which it would have been subject as severance pay under the
               Employment Agreement, the Company will pay an additional amount
               (the "Gross-Up Payment") such that after payment of all state and
               federal taxes on the Consulting Fee and the Gross-Up Payment,
               Consultant will retain an amount equal to the amount Consultant
               would have received as severance pay under the Employment
               Agreement.

The total amount described in (i) and (ii) above shall be paid monthly during
the Term as provided herein.

        To the extent provided by the federal COBRA law or, if applicable, state
insurance laws, and by the Company's group health insurance policies, Consultant
will be eligible to continue Consultant's health insurance benefits. In the
event Consultant elects continued coverage under COBRA, the Company, as part of
this Agreement and in consideration thereof, will reimburse Consultant for the
same portion of Consultant's COBRA health insurance premium that the Company
previously paid for Consultant's coverage under the Employment Agreement.
Consultant will be responsible for the same portion of the COBRA health
insurance that Consultant previously paid for coverage under the Employment
Agreement.

        The Company shall pay on Consultant's behalf, or reimburse Consultant
for, any expenses reasonably incurred in connection with his rendering of the
Services and which are not incurred in violation of any policy or policies
regarding expenses which may be adopted by the Board of Directors from time to
time. Consultant agrees to submit receipts and other documentation to support
the above expenses as a condition of reimbursement therefor.

        Consultant will fully and completely cooperate with the Company with
respect to all matters associated with the taxation or potential taxation of any
payments and reimbursements hereunder. Consultant acknowledges that Consultant
is responsible for consulting his or her own tax advisor with respect to any
taxation matters.



                                       1.