Document:

<PAGE>   1
                                                                   EXHIBIT 10.13

                               AMENDMENT NO. 1 TO
                              THE CREDIT AGREEMENT

                                                     Dated as of October 2, 2000

         AMENDMENT NO. 1 TO THE CREDIT AGREEMENT dated as of October 2, 2000
among Advance Paradigm, Inc., a Delaware corporation (the "BORROWER"), the
Subsidiary Guarantors, the Lenders, Bank One, N.A., as Documentation Agent, Bank
of America, N.A., as Collateral Agent and as Administrative Agent, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as Lead Arranger and as Syndication
Agent and Banc of America Securities LLC as Joint Lead Arranger for the Lenders.

         PRELIMINARY STATEMENTS:

         (1) The Borrower, the Lenders and the Agents have entered into a Credit
Agreement dated as of October 2, 2000 (as amended, supplemented or otherwise
modified through the date hereof, the "CREDIT AGREEMENT"). Capitalized terms
defined in the Credit Agreement and not otherwise defined in this Amendment are
used herein as therein defined.

         (2) The Borrower and the Lenders have agreed to amend the Credit
Agreement as hereinafter set forth.

         SECTION 1. Amendment. The Credit Agreement is, effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, hereby amended by adding to the end of Section 9.07 a new
subsection (k) as follows:

                  Further and notwithstanding any other provision set forth in
         this Agreement including without limitation clause (j) above, any
         Lender Party that is a fund that invests in bank loans may pledge all
         or any portion of the Advances owing to it and the Note or Notes, if
         any, held by it to the trustee for holders of obligations owed, or
         securities issued, by such fund as security for such obligations or
         securities; provided, that unless and until such trustee actually
         becomes a Lender in compliance with the other provisions of this
         Section 9.07, no such pledge shall release the pledging Lender from any
         of the rights or obligations of a Lender under the Loan Documents even
         thought such trustee may have acquired ownership rights with respect to
         the pledged interest through foreclosure or otherwise.

         SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when, the
Administrative Agent shall have received counterparts of this Amendment executed
by the Borrower, the Subsidiary Guarantors and the Required Lenders or, as to
any of the Lenders, advice satisfactory to the Administrative Agent that such
Lender and each of the Subsidiary Guarantors have executed this Amendment.
Furthermore this Amendment is subject to the provisions of Section 9.01 of the
Credit Agreement.

<PAGE>   2

         SECTION 3. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

                  (a) the representations and warranties contained in each Loan
         Document are correct in all material respects on and as of the date
         hereof, before and after giving effect to this Amendment, as though
         made on and as of the date hereof, other than any such representations
         or warranties that by their terms, refer to a specific date, in which
         case, as of such specific date;

                  (b) no Default has occurred and is continuing under the Credit
         Agreement, as amended hereby, or would result from this Amendment.

         SECTION 4. Reference to and Effect on the Loan Documents. (a) On and
after the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the Notes and each of
the other Loan Documents to "the Credit Agreement", "thereunder". "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended by this Amendment.

         (b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed.

         (c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

         SECTION 5. Costs, Expenses, Taxes. The Borrower agrees to pay on demand
all reasonable costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery and administration, modification and
amendment of this Amendment, the Notes and the other instruments and documents
to be delivered hereunder (including, without limitation, the reasonable fees
and expenses of counsel for the Administrative Agent) in accordance with the
terms of Section 9.04 of the Credit Agreement.

         SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.

         SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

<PAGE>   3
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                        ADVANCE PARADIGM, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Name:
                                        Title: Executive Vice President & CFO

                             SUBSIDIARY GUARANTORS

                                        PCS HOLDING CORPORATION

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PCS HEALTH SYSTEMS, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        CLINICAL PHARMACEUTICALS, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PCS MAIL SERVICES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PCS SERVICES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

<PAGE>   4
                                        ADVP CONSOLIDATION, L.L.C.

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

                                        FOUNDATION HEALTH
                                        PHARMACEUTICAL SERVICES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        BAUMEL-EISNER NEUROMEDICAL
                                        RESEARCH, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        FIRST FLORIDA INTERNATIONAL
                                        HOLDINGS, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        FFI RX MANAGED CARE, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        FIRST FLORIDA MANAGED CARE, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

<PAGE>   5
                                        PCS MAIL SERVICES OF
                                        BIRMINGHAM, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PCS MAIL SERVICES OF FT. WORTH INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PCS MAIL SERVICES OF SCOTTSDALE, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        ADVP OPERATIONS, L.P.

                                        By: Advance Paradigm, Inc.
                                            its general partner

                                            By:    /s/ [ILLEGIBLE]
                                                   ----------------------------
                                            Title:

                                        ADVP MANAGEMENT, L.P.

                                        By: Advance Paradigm, Inc.,
                                            its general partner
                                            By:    /s/ [ILLEGIBLE]
                                                   ----------------------------
                                            Title:

                                        ADVANCE RX.COM, L.P.

                                        By: Advance Paradigm, Inc.
                                            its general partner

                                            By:    /s/ [ILLEGIBLE]
                                                   ----------------------------
                                            Title:
<PAGE>   6
                                        INNOVATIVE MEDICAL RESEARCH,
                                        INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        MATURE RX PLUS OF NEVADA, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        AMBULATORY CARE REVIEW
                                        SERVICES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        PHOENIX COMMUNICATIONS
                                        INTERNATIONAL, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        INNOVATIVE PHARMACEUTICAL
                                        STRATEGIES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

                                        HMN HEALTH SERVICES, INC.

                                        By:    /s/ [ILLEGIBLE]
                                               --------------------------------
                                        Title:

<PAGE>   7

                                        BANK OF AMERICA, N.A.
                                          as Administrative Agent, Collateral
                                          Agent and Initial Lender

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

                                        BANK ONE, N.A., as Documentation
                                        Agent

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

                                        MERRILL LYNCH, PIERCE, FENNER &
                                        SMITH INCORPORATED, as Syndication
                                        Agent

                                        By:
                                            ------------------------------------
                                            Title:
<PAGE>   8

                                        LENDERS

                                        MERRILL LYNCH CAPITAL
                                        CORPORATION

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

                                        BANK ONE, N.A.

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

                                        CREDIT SUISSE FIRST BOSTON

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

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

                                        GENERAL ELECTRIC CAPITAL
                                        CORPORATION

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

                                        FIRST UNION NATIONAL BANK

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

                                        BANK OF CHINA, NEW YORK
                                        BRANCH

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

                                        RAYMOND JAMES BANK, FSB

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

<PAGE>   9

                                        CIBC INC.

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

                                        THE BANK OF NOVA SCOTIA

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

                                        ERSTE BANK DER
                                        OESTERREICHISCHEN SPARKASSEN
                                        AG - NEW YORK

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

                                        ABBEY NATIONAL TREASURY
                                        SERVICES PLC, LONDON

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

                                        NORTHWOODS CAPITAL II, LIMITED
                                        By: Angelo, Gordon & Co., L.P., as
                                        Collateral Manager

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

                                        CANADIAN IMPERIAL BANK OF
                                        COMMERCE

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

<PAGE>   10

                                        ARES LEVERAGED INVESTMENT
                                        FUND, L.P.

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

                                        ARES LEVERAGED INVESTMENT
                                        FUND II, L.P.

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

                                        PROMETHEUS INVESTMENT
                                        FUNDING NO. 1 LTD.

                                        By: CPF Asset Advisory L.P., as
                                        Investment Manager

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

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

                                        CARLYLE HIGH YIELD FUND, L.P.

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

                                        CARLYLE HIGH YIELD PARTNER II,
                                        LTD.

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

                                        BAVARIA TRR CORPORATION

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

<PAGE>   11

                                       CARAVELLE INVESTMENT FUND,
                                       L.L.C.

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

                                       SIERRA CLO I, LTD.

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

                                       CITADEL HILL 2000 LTD.

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

                                       FIVE FINANCE CORPORATION
                                       Citibank, N.A. as Additional Investment
                                       Manager for and on behalf of Five Finance
                                       Corporation

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

                                       TYLER TRADING, INC.

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

                                       FLEET NATIONAL BANK FOR THE
                                       ACCOUNT OF FLAGSHIP CLO

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

                                       FOOTHILL INCOME TRUST, L.P.
                                       By FIT GP, LLC, its General Partner

                                       By:
                                           -------------------------------------
                                           Title: Managing Member
<PAGE>   12

                                        FRANKLIN CLO I, LIMITED

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

                                        FRANKLIN FLOATING RATE MASTER
                                        SERIES

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

                                        FRANKLIN FLOATING RATE TRUST

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

                                        HELLER FINANCIAL, INC.

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

                                        KATONAH I, LTD.

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

                                        NOMURA BOND & LOAN FUND

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

                                        NUVEEN FLOATING RATE FUND
                                        By: Nuveen Senior Loan Asset Management
                                        Inc.

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

                                        NUVEEN SENIOR INCOME FUND
                                        By: Nuveen Senior Loan Asset Management
                                        Inc.

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

<PAGE>   13

                                        ML CLO XII PILGRIM OF AMERICA
                                        (CAYMAN) LTD.

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

                                        ML CLO XV PILGRIM AMERICA
                                        (CAYMAN) LTD.

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

                                        ML CLO XX PILGRIM AMERICA
                                        (CAYMAN) LTD.

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

                                        PILGRIM PRIME RATE TRUST

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

                                        PILGRIM CLO 1999-1 LTD.

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

<PAGE>   14

                                        SEQUILS-PILGRIM I, LTD.

                                        By: Pilgrim Investments, Inc., as its
                                        investment manager

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

                                        OPPENHEIMER SENIOR FLOATING
                                        RATE FUND

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

                                        HARBOURVIEW CDO II, LTD.

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

                                        KZH SHOSHONE LLC

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

                                        APEX (IDM) CDO I, LTD.

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

                                        ELC (CAYMAN) LTD. CDO SERIES
                                        1999-1

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

                                        ELC (CAYMAN) LTD. 2000-1

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

<PAGE>   15

                                        KZH WATERSIDE LLC

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

                                        KZH ING-1 LLC

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

                                        KZH ING-2 LLC

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

                                        KZH ING-3 LLC

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

                                        ARCHIMEDES FUNDING IV, LTD

                                        By: ING Capital Advisors LLC, as
                                        Collateral Manager

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

                                        NEMEAN CLO, LTD

                                        By: ING Capital Advisors LLC, as
                                        Investment Manager

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

                                        THE ING CAPITAL SENIOR SECURED
                                        HIGH INCOME FUND HOLDINGS, LTD.

                                        By: ING Capital Advisors LLC, as
                                        Investment Manager

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

<PAGE>   16

                                        SWISS LIFE US RAINBOW LIMITED

                                        By: ING Capital Advisors LLC, as
                                        Investment Manager

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

                                        MAPLEWOOD (CAYMAN) LIMITED
                                        MASSMUTUAL INVESTMENT ADVISOR

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

                                        MASSACHUSETTS MUTUAL LIFE
                                        INSURANCE COMPANY

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

                                        MASSMUTUAL HIGH YIELD
                                        PARTNERS II, LLC

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

                                        SIMSBURY CLO, LIMITED

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

                                        SUFFIELD CLO, LIMITED

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

                                        WILBRAHAM CBO, LIMITED

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

<PAGE>   17

                                        STEIN, ROE & FARNHAM, as agent for
                                        KEYPORT LIFE INSURANCE
                                        COMPANY

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

                                        LIBERTY-STEIN ROE ADVISOR
                                        FLOATING RATE ADVANTAGE FUND

                                        By: Stein Roe & Farnham Incorporated, as
                                        Advisor

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

                                        SRF 2000 LLC

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

                                        SRF TRADING, INC.

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

                                        STEIN ROE FLOATING RATE LIMITED
                                        LIABILITY COMPANY

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

                                        VAN KAMPEN SENIOR INCOME
                                        TRUST

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

                                        VAN KAMPEN CLO I, LIMITED

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

<PAGE>   18

                                        VAN KAMPEN CLO II, LIMITED

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

                                        MONY LIFE INSURANCE COMPANY

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

                                        AIMCO CDO SERIES 2000-A

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

                                        ALLSTATE LIFE INSURANCE
                                        COMPANY

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

                                        ARES III CLO LTD.

                                        By: ARES CLO Management LLC

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

                                        TRYON CLO LTD. 2000-1

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

<PAGE>   19

                                        MORGAN STANLEY DEAN WITTER
                                        PRIME INCOME TRUST

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

                                        CAPTIVA III FINANCE LTD.

                                        as advised by Pacific Investment
                                        Management Company LLC

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

                                        WINDSOR LOAN FUNDING, LIMITED

                                        By: Stanfield Capital Partners LLC, as
                                        its Investment Manager

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

                                        STANFIELD/RMF TRANSATLANTIC
                                        CDO, LTD.

                                        By: Stanfield Capital Partners LLC, as
                                        its Collateral Manager

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

                                        SENIOR DEBT PORTFOLIO

                                        By: Boston Management and Research, as
                                        Investment Advisor

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

<PAGE>   20

                                        EATON VANCE CDO III, LTD.

                                        By: Eaton Vance Management, as
                                        Investment Advisor

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

                                        EATON VANCE INSTITUTIONAL
                                        SENIOR LOAN FUND

                                        By: Eaton Vance Management, as
                                        Investment Advisor

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

                                        OXFORD STRATEGIC INCOME FUND

                                        By: Eaton Vance Management, as
                                        Investment Advisor

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

                                        EATON VANCE SENIOR INCOME
                                        TRUST

                                        By: Eaton Vance Management, as
                                        Investment Advisor

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

                                        FIRST DOMINION FUNDING II

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

                                        FIRST DOMINION FUNDING III

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

<PAGE>   21

                                        SANKATY HIGH YIELD PARTNERS II,
                                        L.P.

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

                                        BRANT POINT II CBO 2000-1-LTD.

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

                                        GREAT POINT CLO 1999-1 LTD.

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

                                        FLEET NATIONAL BANK AS
                                        TRUST ADMINISTRATOR FOR LONG
                                        LANE MASTER TRUST IV

                                        By:
                                            ------------------------------------
                                            Title:<PAGE>   1
                                                                   EXHIBIT 10.15

                              EMPLOYMENT AGREEMENT

                  EMPLOYMENT AGREEMENT made as of July 11, 2000, between ADVANCE
PARADIGM, INC. (hereinafter "Company"), a Delaware corporation having its
principal place of business in Irving, Texas, and DAVID D. HALBERT (hereinafter
"Employee"):

                                   WITNESSETH:

         WHEREAS, Employee desires to render faithful and efficient service to
         the Company; and

         WHEREAS, the Company desires to receive the benefit of Employee's
         service; and

         WHEREAS, Employee is willing to be employed by the Company; and

         WHEREAS, both the Company and the Employee desire to formalize the
         conditions of Employee's employment by written agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
         covenants hereinafter set forth, the parties agree as follows:

         1.       Office. The Company hereby employs Employee as its Chairman of
                  the Board of Directors and Chief Executive Officer, and
                  Employee hereby agrees to serve the Company in such
                  capacities.

         2.       Term of Employment. Employee's employment shall be for the
                  "Employment Period" with the initial term commencing on the
                  date of closing of the purchase of PCS Health Systems, Inc. by
                  the Company, and extending therefrom for three years. The
                  initial term shall be automatically renewed and extended upon
                  the expiration thereof for successive periods of one year
                  until such time as the Employment Period shall terminate
                  pursuant to the terms of this Agreement, or until the Company
                  on the one hand, or Employee on the other hand, shall
                  terminate the Employment Period by giving written notice to
                  the other party on or before 60 days prior to the expiration
                  date of the initial or any renewal term. The renewal and
                  extension of this Agreement shall also be referred to as the
                  "Employment Period." The effective date of Employee's
                  termination of employment for whatever reason under this
                  Agreement shall be the "Termination Date."

         3.       Responsibilities. During the Employment Period, Employee shall
                  devote his business time and attention, except during
                  reasonable vacation periods, to, and exert his best efforts to
                  promote, the affairs of the Company, and shall render such
                  services to the Company as may be required by the Board of
                  Directors of the Company ("Board") consistent with his
                  employment as Chairman and Chief Executive Officer. Nothing
                  herein contained shall preclude service by Employee

<PAGE>   2

                  on a reasonable number of boards of directors, advisors or
                  trustees of other entities not engaged in any business
                  competitive with the business of the Company, provided such
                  services do not interfere with his service hereunder, or shall
                  preclude Employee's investment in any such entity.

         4.       Incapacity. If, during the Employment Period, Employee should
                  be prevented from performing his duties or fulfilling his
                  responsibilities by reason of any incapacity or disability for
                  a continuous period of 90 days, then the Company's Board of
                  Directors, in its sole and absolute discretion, may, based on
                  the opinion of a qualified physician, consider such incapacity
                  or disability to be total and may terminate the Employment
                  Period. Benefits and payments shall be made under this
                  Agreement following incapacity as if it were a termination
                  without Good Cause in accordance with Section 8(a). Such
                  termination shall not adversely affect Employee's rights under
                  any disability insurance policy that will be provided by the
                  Company to the Employee.

         5.       Death. The Employment Period shall automatically terminate
                  upon the death of Employee. In such instance all further
                  benefits and payments would cease, but all shares or options
                  previously awarded to Employee but not yet vested or
                  exercisable shall become fully vested as of the date of death
                  and shall be exercisable for one year commencing on that date.

         6.       Compensation. During the Employment Period, Employee shall
                  receive:

                  (a)      an initial base salary (hereinafter "Annual Base
                           Salary") that shall be an annual amount of not less
                           than $1 million, payable in accordance with the
                           payroll practices of the Company;

                  (b)      an annual performance bonus with a target of 100% of
                           Annual Base Salary payable in accordance with the
                           Company's Annual Incentive Performance Program.

                  (c)      a reasonable automobile allowance to cover the cost
                           of leasing, maintaining and providing insurance on an
                           automobile to be selected by the Employee;

                  (d)      a reasonable amount to cover, as applicable, the cost
                           of initiation and annual dues and fees of a social or
                           professional club in Dallas, Texas, Baltimore,
                           Maryland and Phoenix, Arizona, each to be determined
                           by the Employee;

                  (e)      Reasonable reimbursement to cover the costs and
                           expenses of travel and Company-related entertainment;
                           and

                  (h)      eligibility for, and compensation to cover the costs
                           of participation in, all benefit plans and programs,
                           including those for executive employees, that

                                       2
<PAGE>   3

                           may be made available by the Company to its
                           employees, and also for the Employee a term life
                           insurance policy in an amount not less than $5
                           million, a disability insurance policy that would pay
                           at least 80% of the Employee's Annual Base Salary as
                           well as health and dental insurance benefits.

                  (i)      reimbursement of $25,000 for Employee's legal costs
                           regarding this Agreement and the commencement of his
                           employment.

         7.       Equity.

                           (a) Initial Options. Upon the execution of this
                           Agreement, Employee shall receive options for 1
                           million shares of the Company's common stock
                           exercisable at a price of $20 per share. These
                           options shall vest over four years: the first
                           one-quarter of them vesting on the first anniversary
                           of this Agreement; and the remaining three quarters
                           vesting in turn on the subsequent three anniversaries
                           of this Agreement.

                           (b) Incentive Plan. Employee shall be eligible for
                           participation in any incentive stock plan approved by
                           the Board.

         8.       Severance Payments.

                  (a)      In the event that Employee's employment is terminated
                           by the Company while this Agreement is in effect
                           without Good Cause, as that term is defined in
                           Sections 8(c) hereof; or if the Employee leaves the
                           Company's employ for Good Reason, i.e., (i) because,
                           after good faith negotiations, the Company refuses to
                           renew this Agreement; (ii) if a Change of Control
                           takes place as that term is defined in Section 9
                           hereof; or (iii) if the Employee's duties and
                           responsibilities are materially changed as a result
                           of action by the Board:

                           (1)      The Company shall pay to Employee an
                                    aggregate amount of three times his combined
                                    then annual salary and target bonus, which
                                    payment shall be made within 90 calendar
                                    days of the date of termination. The Company
                                    shall continue to keep in full force and
                                    effect all plans or policies of medical,
                                    accident and life insurance benefits with
                                    respect to Employee and his dependents with
                                    the same level of coverage available to
                                    employees under the terms of those employee
                                    benefit plans for a period of 12 months,
                                    upon the same terms, costs and otherwise to
                                    the same extent as such plans are in effect
                                    for employees of the Company who were
                                    similarly situated to Employee as of the
                                    Termination Date, provided such continuation
                                    is permitted by law and such insurance
                                    policies. There shall be no other payments
                                    to the Employee.

                                       3
<PAGE>   4

                           (2)      Upon termination as set forth in Section
                                    8(a) above, shares or options previously
                                    awarded to Employee but not yet vested or
                                    exercisable shall become fully vested as of
                                    the Termination Date and all vested stock
                                    options shall be exercisable for one year
                                    commencing on the Termination Date.

                  (b)      In the event that Employee's employment is terminated
                           by the Company for Good Cause as defined in Section
                           8(c):

                           (1)      Any vested Shares or stock options
                                    previously granted but unexercised shall be
                                    exercisable within 90 days of the
                                    termination date. Any Shares or stock
                                    options unvested at the Termination Date
                                    shall be forfeited.

                           (2)      Employee shall be entitled to no other
                                    compensation other than set forth in this
                                    section 8(b) if he is terminated for Good
                                    Cause.

                   (c)     "Good Cause" shall mean: (i) the commission of a
                           proven act of fraud or dishonesty in the course of
                           employment; (ii) conviction of a crime constituting a
                           felony or in respect of any act of fraud, dishonesty
                           or moral turpitude; (iii) the commission of an act
                           which would make the Employee subject to being
                           enjoined, suspended, barred or otherwise disciplined
                           for violation of federal or state securities laws,
                           rules or regulations, including a "statutory
                           disqualification;" If the Employee unilaterally
                           terminates his Employment without "Good Reason" as
                           defined in Section 8(a), said termination will be
                           equivalent to a "Good Cause" termination under this
                           section.

                  (d)      Following the Employment Period, and in addition to
                           that which is provided in paragraph 8(a)(1) above,
                           the Employee shall be eligible for continuation of
                           health and dental insurance coverage pursuant to the
                           Consolidated Omnibus Budget Reconciliation Act
                           (COBRA) for the 18 months following the Termination
                           Date.

         9.       "Change in Control" shall mean the following: (i) a merger or
                  consolidation of the Company in which the then current
                  shareholders of the Company hold less than 50% of the capital
                  stock of the surviving corporation; (ii) a sale of all or
                  substantially all of the assets of the Company; (iii) the sale
                  of a majority of the outstanding voting securities of the
                  Company; (iv) a liquidation and dissolution of the Company;
                  provided, that, without limitation such a change in control
                  shall be deemed to have occurred if (a) any "person" (as
                  defined in the Securities and Exchange Act of 1934) other than
                  the Company or any "person" who on the effective date of this
                  agreement is an officer or director of the Company, or any
                  employer of such "person" or any "affiliate" (as defined in
                  the Exchange Act), becomes the beneficial owner, directly or
                  indirectly, of securities of the Company

                                       4
<PAGE>   5

                  representing 50% or more of the combined voting power of the
                  Company's outstanding securities, (b) individuals who
                  constitute the Board of Directors of the Company on any day
                  (the "Incumbent Board") cease for any reason other than their
                  deaths to constitute at least a majority of the Incumbent
                  Board on the following day (which day shall be the day on
                  which a "change in control" shall be deemed to have occurred),
                  provided that any individual becoming a director subsequent to
                  the date of this Agreement whose election or nomination for
                  election was approved by a vote of not less than two-thirds of
                  the Incumbent Board shall be considered, for purposes of this
                  section, as though such person were a member of the Incumbent
                  Board, and (c) material diminution or change of Employee's
                  duties hereunder.

         10.      Confidentiality.

                  (a)      Confidential Information. The Employee acknowledges
                           that the information, observations and data obtained
                           by him while employed by the Company concerning the
                           business or affairs of the Company ("Confidential
                           Information") are the property of the Company.
                           Therefore, Employee agrees that, except in the
                           performance of duties for the Company, he shall not
                           disclose to any unauthorized person or use for his
                           own account any Confidential Information without
                           prior written consent of the Board, except (i) to the
                           extent that the aforementioned matters become
                           generally known to and available for use by the
                           public other than as a result of Employee's acts or
                           omissions to act, (ii) as necessary to comply with
                           compulsory legal process, provided that Employee
                           shall provide prior notice to the Company regarding
                           such disclosure and the Company, as applicable, shall
                           have the right to contest such disclosure, (iii) as
                           necessary to counsel and other professional advisors
                           retained by the Employee, subject to the
                           attorney/client privilege or a valid and binding
                           non-disclosure agreement between Employee and such
                           professional and (iv) disclosures of information
                           obtained from a third party free of restrictions or
                           disclosure of information in Employee's possession
                           prior to the date hereof which was obtained from a
                           source other than the Company or its predecessors.
                           Employee shall deliver to the Company at the
                           termination of the Employment Period, all memoranda,
                           notes, plans, records, reports, computer tapes and
                           software and other documents and data (and copies
                           thereof) relating to Confidential Information, Work
                           Product or the business of the Company which he may
                           then possess or have under his control.

                  (b)      Non-Compete, Non-Solicitation.

                           (1)      Employee acknowledges that in the course of
                                    his employment with the Company, he will
                                    become familiar with the Company's trade
                                    secrets and with other confidential
                                    information concerning the Company and that
                                    his services will be of special, unique and

                                       5
<PAGE>   6

                                    extraordinary value to the Company.
                                    Therefore, Employee agrees that, during the
                                    Employment Period, and for two years after
                                    such termination (the "Non-Compete Period"),
                                    he shall not directly or indirectly, own,
                                    manage, control, participate in, consult
                                    with, render services for, or in any manner
                                    engage in any business competing within the
                                    continental United States with the
                                    businesses of the Company as such businesses
                                    exist or are in process on the date of the
                                    termination of Employee's employment.
                                    Notwithstanding the foregoing, nothing
                                    herein shall prohibit Employee from (i)
                                    continuing his ownership, management and/or
                                    control of any business in which and to the
                                    extent which he held such interests prior to
                                    the Non-Compete Period, or (ii) being a
                                    passive owner of not more than 5% of the
                                    outstanding stock of any class of a company
                                    which is publicly traded, so long as
                                    Employee has no active participation in the
                                    management or the business of such company.

                           (2)      During the Employment Period and for one
                                    year thereafter, Employee shall not,
                                    directly or indirectly, through another
                                    entity (i) solicit, encourage, interview,
                                    entice, discuss with or induce or attempt to
                                    induce any employee of the Company (with the
                                    exception of Laura I. Johansen and Stephanie
                                    Thomas) to leave the employ of the Company,
                                    or in any way interfere with the
                                    relationship between the Company and any
                                    employee thereof, or (ii) hire any person
                                    (with the exception of Laura I. Johansen and
                                    Stephanie Thomas) who was an employee of the
                                    Company at any time during the Employment
                                    Period.

                  (d)      Enforcement. If, at the time of enforcement of
                           section 10 of this Agreement, a court holds that the
                           restrictions stated herein are unreasonable under
                           circumstances then existing, the parities hereto
                           agree that the maximum period, scope or geographical
                           area reasonable under such circumstances shall be
                           substituted for the stated period, scope and area.

         11.      Effect of Termination of the Employment Period. Upon the
                  termination of the Employment Period, this Agreement shall
                  terminate, and all of the parties' obligations hereunder shall
                  forthwith terminate, except that rights and remedies accruing
                  prior to such termination or arising out of this Agreement
                  shall survive, and except for the obligations set forth in
                  section 10 above.

         12.      Notice. Any notice required to be given by the Company
                  hereunder to Employee shall be in proper form and signed by an
                  officer or Director of the Board of the Company. Until one
                  party shall advise the other in writing to the contrary,
                  notices shall be deemed delivered:

                                       6
<PAGE>   7

                  (a)      To the Company if delivered to the Chairman of the
                           Compensation Committee of the Board of Directors of
                           the Company, or if mailed, certified or registered
                           mail postage prepaid: to Advance Paradigm, 545 E.
                           John Carpenter Freeway, Irving, Texas 75062.

                  (b)      To employee if delivered to Employee, or if mailed to
                           him by certified or registered mail, postage prepaid
                           to: David D. Halbert, 3103 Caris Brook Court,
                           Colleyville, Texas 76034.

         13.      Benefit. This Agreement shall bind and inure to the benefit of
                  the Company and the Employee, their respective heirs,
                  successors and assigns.

         14.      Severability. If a judicial determination is made that any of
                  the provisions of this Employment Agreement are unreasonable
                  or otherwise unenforceable, the remainder of its provisions is
                  severable and shall be given full force and effect.

         15.      Choice of law. This Agreement shall be governed by the law of
                  Texas.

         16.      Arbitration. The parties agree that any and all disputes,
                  claims or controversies arising out of or relating to this
                  agreement that are not resolved by their mutual agreement
                  shall be submitted to final and binding arbitration before JO
                  AO MO S/ENDISPUTE, or its successor, pursuant to the United
                  States Arbitration Act, 9 U.S.C. Sec. 1, et seq. Either party
                  may commence the arbitration process called for in this
                  agreement by filing a written demand for arbitration with JO
                  AO MO S/ENDISPUTE, with a copy to the other party. The
                  arbitration will be conducted in accordance with the
                  provisions of JO AO MO S/ENDISPUTE's Streamlined Arbitration
                  Rules and Procedures in effect at the time of filing of the
                  demand for arbitration. The parties will cooperate with JO AO
                  MO S/ENDISPUTE and with one another in selecting an arbitrator
                  from Jo Ao Mo S/ENDISPUTE's panel of neutrals, and in
                  scheduling the arbitration proceedings. The parties covenant
                  that they will participate in the arbitration in good faith,
                  and that they will share equally in its costs. The provisions
                  of this Paragraph may be enforced by any Court of competent
                  jurisdiction, and the party seeking enforcement shall be
                  entitled to an award of all costs, fees and expenses,
                  including attorneys fees, to be paid by the party against whom
                  enforcement is ordered.

         17.      Counterparts. This Agreement may be executed in counterparts,
                  each of which may be considered a duplicate original.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                       7
<PAGE>   8

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this ____ day of ____, 2000.

ATTEST:                                          ADVANCE PARADIGM, INC.

By:                                              By:
   ----------------------------                     ----------------------------
         Corporate Secretary                        Chairman of the Compensation
                                                       Committee

WITNESS:                                         "EMPLOYEE"

-------------------------------                  -------------------------------
                                                 David D. Halbert

                                       8

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