<PAGE>   1
                                                                   EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT


        This EMPLOYMENT AGREEMENT is entered into between medibuy.com, a
Delaware Corporation with a principal place of business at 7777 Alvarado Road,
Suite 401, La Mesa, California, 91941 ("COMPANY") and Norman R. Farquhar of 9
Marbella, Dana Point, California 92629 ("EXECUTIVE").

        1. Employment.

        COMPANY hereby employs EXECUTIVE, and EXECUTIVE hereby agrees to accept
employment from COMPANY, as Executive Vice President and Chief Financial Officer
of COMPANY. EXECUTIVE agrees during the term of his employment under this
Agreement to perform the duties and responsibilities customarily required of
such position, and to be subject to COMPANY's bylaws and Delaware corporation
law. EXECUTIVE agrees to perform such services consistent with his position as
shall be reasonably determined from time to time by the Board of Directors.
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.

        2. Term of Employment.

        The employment under this Agreement shall commence on October 25, 1999
and shall end on October 25, 2000, provided that the term of the Agreement shall
be extended automatically for successive periods of one year unless otherwise
terminated under Paragraph 5 of this Agreement.



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        3. Compensation.

           (a) Base Salary. As compensation for services provided to COMPANY,
EXECUTIVE shall receive a salary at the annual rate of $225,000, less such
payroll and withholding taxes as required by law to be deducted and such other
amounts as EXECUTIVE shall authorize in writing. 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 any incentive bonus
program 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 Board of Directors or COMPANY's Chief Executive
Officer.

           (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 300,000 shares of Common Stock
of COMPANY at an exercise price not to exceed $3.60 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 Omnibus
Equity Plan (the "Plan").

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



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               Upon EXECUTIVE's completion of 6 full months of employment
                    pursuant to this Agreement, 13% of the option shares, or
                    39,000 shall vest and be subject to exercise immediately,
                    and upon EXECUTIVE's completion of one full year of
                    employment pursuant to this Agreement, an additional 12% of
                    the option shares, or 36,000, shall vest and be subject to
                    exercise immediately, provided, however, that in the event
                    EXECUTIVE resigns his employment with Company prior to the
                    completion of one full year of employment under this
                    Agreement, any shares of COMPANY'S Common Stock that
                    EXECUTIVE has acquired by virtue of the exercise of such
                    options shall be subject to COMPANY's right to repurchase at
                    the price EXECUTIVE paid for them, and any options that have
                    vested but which EXECUTIVE has not yet exercised shall
                    become null and void.

               The  remaining 225,000 option shares shall vest and be subject to
                    exercise at the rate of 6,250 shares for each full month
                    that EXECUTIVE'S employment continues under this Agreement
                    after the first anniversary hereunder, up to a maximum of
                    225,000 shares.

               (ii) In the event that within two years following the effective
                    date of a Change in control" (as defined below) EXECUTIVE's
                    employment is terminated without cause, or EXECUTIVE's
                    duties as Executive Vice President and Chief Financial
                    Officer are significantly changed, the balance of the
                    options for 300,000 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 either (i) a
                    dissolution, liquidation, or sale of all or substantially
                    all of the assets of the Company; (ii) a merger or
                    consolidation in which the Company is not the surviving
                    corporation; (iii) a reverse merger in which the Company is
                    the surviving corporation but the shares of the Company's
                    common stock outstanding immediately



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                    preceding the merger are converted by virtue of the merger
                    into other property, whether in the form of securities, cash
                    or otherwise; (iv) after the Listing Date, an acquisition by
                    any person, entity or group within the meaning of Section
                    13(d) or 14(d) of the Exchange Act, as hereafter amended or
                    succeeded, excluding any employee benefit plan, or related
                    trust, sponsored or maintained by the Company or an
                    affiliate of the Company, of the beneficial ownership
                    (within the meaning of Rule 13d-3 promulgated under the
                    Exchange Act) of securities of the Company or its successor
                    representing at least fifty percent (50%) of the combined
                    voting power entitled to vote in the election of directors;
                    or (v) after the Listing Date, if individuals who, as of the
                    date of the adoption of this Plan, are members of the Board
                    (the "Incumbent Board"), cease for any reason to constitute
                    at least fifty percent (50%) of the Board, provided that, if
                    the election, or nomination for, election, by the Company's
                    stockholders of any new director was approved by a vote of
                    at least fifty percent (50%) of the Incumbent Board, such
                    new director shall be considered as a member of the
                    Incumbent Board, notwithstanding the foregoing, in the case
                    of (ii) and (iii) above, such transactions shall only be
                    deemed a "change in control" if the stockholders of the
                    Company or its successor immediately prior to such merger,
                    consolidation or reverse merger: (A) hold less then 50% of
                    the outstanding securities of the



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                    surviving company following the merger or consolidation, or
                    (B) in the event that the securities of an affiliated entity
                    are issued to the stockholders of the Company in the
                    transaction, hold less then 50% of the outstanding
                    securities of such entity corporation.

                    For purposes of this section "Listing Date" shall mean the
                    first date upon which any security of the COMPANY is listed
                    (or approved for listing) upon notice of issuance on any
                    securities exchange or designated (or approved for
                    designation) upon notice of issuance as a national market
                    security on an interdealer quotation system if such
                    securities exchange or interdealer quotation system has been
                    certified in accordance with the provisions of Section
                    25100(o) of the California Corporate Securities Law of 1968.

           (d) Additional Compensation. In addition to the other forms of
               compensation to be paid to EXECUTIVE under this Agreement,
               COMPANY shall pay to EXECUTIVE a signing bonus in the sum of
               $150,000 (gross amount).

               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 which



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

           (b) Reimbursement of Business Expenses. During the term of this
Agreement, COMPANY shall reimburse EXECUTIVE promptly for all expenditures,
including travel, entertainment, parking and business meetings (including 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 then in effect, as established from time to time
by the Board of Directors.

        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 her estate upon such automatic
termination, except to honor the exercise of any stock options that have vested
prior to the date of such termination, subject to the applicable conditions of
the Plan.

           (b) Termination Not for Cause. In the event that COMPANY terminates
this Agreement without cause, COMPANY shall, subject to the conditions set forth
in Section 6(b), below, continue to pay EXECUTIVE his salary at the level in
effect at the time of



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termination for a period of twelve (12) months, plus any accrued, but unused
vacation, and less any applicable payroll and withholding taxes or other legally
required deductions, provided EXECUTIVE first executes the Waiver and Release,
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 that one year period. COMPANY reserves the right
to pay the one-year salary continuation amount in a lump sum, discounted to
present value using a discount factor or 6%. No other compensation or benefits
shall be due to EXECUTIVE.

           (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 the following: (i) conviction of EXECUTIVE for any
crime, or entry of a plea of nolo contendere for any crime 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, or

(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.



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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.

           (e) 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.

           (f) Stock Options. Subject to the Change in Control provisions of
Section 3(c)(ii), above, only the shares subject to the stock options granted to
EXECUTIVE above 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.
Any stock options that are unvested as of the date of EXECUTIVES's termination,
for whatever reason, shall be null and void.

        6. Noncompetition, Confidentiality and Conflicts of Interest.

           (a) 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 threatened breach by him of
the provisions of



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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 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 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.



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           (c) Conflicts of Interest. 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, securities of any publicly traded companies, provided his beneficial
ownership of the stock of any one such corporation does not exceed 1% of such
corporation's voting stock.

           (d) 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:

               (i) soliciting, attempting to solicit, inducing or otherwise
causing any employee of COMPANY to terminate his or his employment in order to
become an employee, consultant or contractor to or for any competitor of
COMPANY;

               (ii) directly or indirectly soliciting the business of any
customer of COMPANY which at the time of termination or one year prior thereto
was listed on COMPANY's customer list, which solicitation, if successful, would
result in the loss of business or potential business for COMPANY.

        7. Notices.

        For purposes of this Agreement, notices and other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States Registered or
Certified Mail, return receipt requested, postage prepaid, addressed as follows:

        If to EXECUTIVE:    Norman R. Farquhar
                            9 Marbella
                            Dana Point, CA 92629



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

                            Attn: The Chief Executive Officer

or at such other address as any party may have furnished to the other in
writing subsequent to the execution of this Agreement or, in the case of
EXECUTIVE, to the address listed for him in COMPANY's records, and in the case
of COMPANY, to the address known by him 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 writing, signed by EXECUTIVE and by the Chief
Executive Officer of COMPANY.

        9. Severability.

        If any provision of this Employment 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



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COMPANY, in which event it shall be binding upon, and inure to the benefit of,
the person(s) or entity(ies) to 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 on
the dates indicated below.



                                        EXECUTIVE:



Dated: 10/6/99                          /s/ Norman R. Farquhar
                                        ----------------------------------------
                                        Norman R. Farquhar



                                        MEDIBUY.COM, INC.



Dated: 10/6/99                          /s/ Dennis J. Murphy
                                        ----------------------------------------
                                        Dennis J. Murphy
                                        Chairman and Chief Executive Officer



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                       WAIVER AND RELEASE OF CLAIMS


        In exchange for payment to me of amounts pursuant to Section 5 (and for
the other benefits provided therein) of my Employment Agreement (the
"Agreement"), to which this form is attached, I hereby furnish medibuy.com, Inc.
(the "Company") with the following release and waiver.

        I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns and affiliates,
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising at any time prior to and
including my employment termination date with respect to any claims relating to
my employment and the termination of my employment, including but not limited
to, claims pursuant to any federal, state or local law relating to employment
including, but not limited to, discrimination claims, claims under the
California Fair Employment and Housing Act, and the Federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"), or claims for wrongful
termination, breach of the covenant of good faith, contract claims, tort claims,
and wage or benefit claims, including but not limited to, claims for salary,
bonuses, commissions, stock, stock options, vacation pay, fringe benefits,
severance pay or any form of compensation.

        I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.

        I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this waiver and release is knowing and
voluntary, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee of
the Company. I further acknowledge that if I am over 40 I have been advised, as
required by the Older Workers Benefit Protection Act, that: (a) the waiver and
release granted herein does not relate to claims which may arise after this
agreement is executed; (b) I have the right to consult with an attorney prior to
executing this agreement (although I may choose voluntarily not to do so); (c) I
have twenty-one (21) days from the date I receive this agreement, in which to
consider this agreement (although I may choose voluntarily to execute this
agreement earlier); (d) I have seven (7) days following the execution of this
agreement to revoke my consent to the agreement; and (e) this agreement shall
not be effective until the seven (7) day revocation period has expired.

This release shall not extend to the Company's obligations which survive the
termination of my employment agreement, such as severance pay due me, if any,
and any other benefit plan or program, such as the Company's Stock Option Plan.

Date: 10-6-99                             By: /s/ N. Farquhar
                                             ----------------------------
                                             [Employee]


                                     1.
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                       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 NORMAN R. FARQUHAR ("Executive").

        A. Executive is the EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
of the Company pursuant to an employment agreement dated as of OCTOBER 25, 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 EXECTIVE 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.



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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:

                      Norman R. Farquhar
                      9 Marbella
                      Dana Point, CA 92629

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.



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        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/ Norman R. Farquhar
                                        ----------------------------------------
                                        ----------------



                                       3.
<PAGE>   17

                                    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 NORMAN R. FARQUHAR ("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>   18

        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>   19

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>   20

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>   21

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/ Norman R. Farquhar
                                        ----------------------------------------
                                        ----------------



                                       5.
<PAGE>   22

                                   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>   23

                                   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.