<PAGE>   1
                                                                   EXHIBIT 10.34

AMENDMENT NO. 1 TO CREDIT AGREEMENT


     THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment No. 1"), dated
as of August 16, 1996, is entered into by and among IPC, INC. (the "Borrower"),
CERTAIN GUARANTORS IDENTIFIED ON THE SIGNATURES PAGES HERETO, THE LENDERS
IDENTIFIED ON THE SIGNATURE PAGES HERETO and NATIONSBANK, N.A., as Agent (the
"Agent").

                                    RECITALS

     WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent entered
into that certain Credit Agreement dated as of December 7, 1995 (the "Existing
Credit Agreement");

     WHEREAS, to effectuate the Merger (as defined below), the Borrower formed
a new Subsidiary, Package Acquisition, Inc., a Delaware corporation
("Acquisition") which became a Credit Party pursuant to a Joinder Agreement;

     WHEREAS, pursuant to that certain Agreement and Plan of Merger (as
amended, the "Merger Agreement"), dated as of May 17, 1996, among the Borrower,
Acquisition, CFI Industries, Inc., a Delaware corporation (the "Company"), and
Equity Holdings, Acquisition will merge with and into the Company (the
"Merger"), and the Company shall be the surviving corporation;

     WHEREAS, after the Merger, the Company, Plastofilm Limited, Plastofilm
Industries, Inc. and CFI Recycling, Inc. shall be Subsidiaries of the Borrower;
and

     WHEREAS, in recognition of the Merger, the parties hereto have agreed to
amend the Existing Credit Agreement;

     NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereby agree as follows:


                                     PART I
                                  DEFINITIONS

           SUBPART 1.1.  Certain Definitions.  Unless otherwise defined
     herein or the context otherwise requires, the following terms used
     in this Amendment No. 1, including its preamble and recitals, have
     the following meanings:

                 "Amended Credit Agreement" means the Existing
           Credit Agreement as amended hereby.

                 "Amendment No. 1 Effective Date" is defined in
           Subpart 3.1.




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           SUBPART 1.2.  Other Definitions.  Unless otherwise defined
      herein or the context otherwise requires, terms used in this
      Amendment No. 1, including its preamble and recitals, have the
      meanings provided in the Amended Credit Agreement.

                                    PART II
                    AMENDMENTS TO EXISTING CREDIT AGREEMENT

      Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II.  Except as so amended, the Existing Credit Agreement and all
other Credit Documents shall continue in full force and effect.


           SUBPART 2.1.    Amendments and Additions to Section 1.1.

           SUBPART 2.1.1.  The following definitions in Section 1.1 of the 
      Existing Credit Agreement are amended in their entirety to read as 
      follows:

           "Guarantor" means Holdings, each of the Subsidiaries of the Borrower
      (other than Plastofilm Ltd.) and each Additional Credit Party which has
      executed a Joinder Agreement.

           "Permitted Investments" means Investments which are (i) cash or Cash
      Equivalents, (ii) accounts receivable created, acquired or made in the
      ordinary course of business and payable or dischargeable in accordance
      with customary trade terms, (iii) Investments in a Guarantor (other than
      Holdings), (iv) Investments in Plastofilm Ltd. not to exceed $2,000,000,
      in the aggregate, at any one time; (v) loans to directors, officers,
      employees, agents, customers or suppliers in the ordinary course of
      business for reasonable business expenses, (vi) loans to directors,
      officers and employees to finance purchases (or tax obligations relating
      to such purchases) of Holding's capital stock not to exceed $5,000,000,
      in the aggregate, at any one time, (vii) Permitted Acquisitions, (viii)
      Investments in foreign joint ventures not to exceed $5,000,000, in the
      aggregate, at any one time, (ix) the purchase of restricted stock or
      options of Holdings or the Borrower from employees who voluntarily or
      involuntarily terminate their employment with the Borrower or any of its
      Subsidiaries, (x) the redemption of Subordinated Debt as permitted by
      this Credit Agreement, (xi) the Investments set forth on Schedule 9.6
      attached hereto, and (xii) the purchase of the Newton Property.

           SUBPART 2.1.2. Section 1.1 of the Existing Credit Agreement is
      amended to add the following definition in its proper alphabetical
      location:



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           "Plastofilm Ltd." means Plastofilm Limited, a corporation organized
      and existing under the laws of Northern Ireland.

           SUBPART 2.2.  Amendments to Section 8.13.  Section 8.13 of the
      Existing Credit Agreement is amended in its entirety to read as follows:

           8.13 Additional Credit Parties.  At the time any Person (other than
      Plastofilm Ltd.) becomes a Subsidiary of a Credit Party, the Borrower
      shall so notify the Agent and promptly thereafter (but in any event
      within 30 days after the date thereof) shall (a) cause such Person to
      execute a Joinder Agreement in substantially the same form as Exhibit
      8.13 attached hereto, (b) cause all of the capital stock of such Person
      to be delivered to the Agent (together with undated stock powers signed
      in blank) and pledged to the Agent pursuant to an appropriate pledge
      agreement in substantially the form of the Pledge Agreements and
      otherwise in a form acceptable to the Agent, (c) cause such Person to
      pledge all of its assets to the Lenders pursuant to a security agreement
      in substantially the form of the Security Agreements and otherwise in a
      form acceptable to the Agent, and (d) if such Person has any
      Subsidiaries, cause such Person to (A) deliver all of the capital stock
      of such Subsidiaries (together with undated stock powers signed in blank)
      to the Agent and (B) execute a pledge agreement in substantially the form
      of the Pledge Agreement and otherwise in a form acceptable to the Agent,
      (e) if such Person owns or leases any real property, cause such Person to
      execute any and all necessary mortgages, deeds of trust, deeds to secure
      debt or other appropriate real estate collateral documentation in a form
      acceptable to the Agent and (f) deliver such other documentation as the
      Agent may reasonably request in connection with the foregoing, including,
      without limitation, appropriate UCC-1 financing statements, real estate
      title insurance policies, environmental reports, landlord's waivers,
      certified resolutions and other organizational and authorizing documents
      of such Person and favorable opinions of counsel to such Person (which
      shall cover, among other things, the legality, validity, binding effect
      and enforceability of the documentation referred to above), all in form,
      content and scope reasonably satisfactory to the Agent.

           SUBPART 2.3.  Amendments to Section 9.1.  Section 9.1 of the
      Existing Credit Agreement is amended by deleting the word "and" at the
      end of subsection (j), replacing the period at the end of subsection (k)
      with a semicolon followed by the word "and" and adding the following
      subsection (l) thereafter:

           9.1 Indebtedness.  Neither Holdings, the Borrower nor any of their
      Subsidiaries will contract, create, incur, assume or permit to exist any
      Indebtedness, except:



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                                   * * * * *

                 (l) Indebtedness of Plastofilm Ltd. not to exceed $4,000,000
           in the aggregate at any one time;

           SUBPART 2.4.  Amendments to Schedules.  Schedules 7.9, 7.15, 7.18,
      7.19(a), 7.19(b), 7.23(a), 7.23(b) and 7.23(c) of the Existing Credit
      Agreement are replaced in their entirety with Schedules 7.9, 7.15, 7.18,
      7.19(a), 7.19(b), 7.23(a), 7.23(b) and 7.23(c) attached hereto.


                                    PART III
                          CONDITIONS TO EFFECTIVENESS

           SUBPART 3.1.  Amendment No. 1 Effective Date.  This Amendment No. 1
      shall be and become effective as of the date hereof (the "Amendment No. 1
      Effective Date") when all of the conditions set forth in this Subpart 3.1
      shall have been satisfied, and thereafter this Amendment No. 1 shall be
      known, and may be referred to, as "Amendment No. 1."

           SUBPART 3.1.1.  Execution of Counterparts of Amendment.  The Agent
      shall have received executed counterparts (or other evidence of
      execution, including facsimile signatures, satisfactory to the Agent) of
      this Amendment No. 1, which collectively shall have been duly executed on
      behalf of each of the Borrower, the Guarantors, the Required Lenders and
      the Agent.

           SUBPART 3.1.2.  Merger.  The Merger shall have been consummated,
      with the Agent having received a copy, certified by an officer of the
      Borrower as true and complete, of the Merger Agreement and of each other
      document or instrument executed by the Borrower or any Credit Party in
      connection with the Merger, in each case as originally executed and
      delivered, and no amendment or modification thereof shall have been
      entered into on or prior to the Amendment No. 1 Effective Date which
      shall not have been approved by the Required Lenders.

           SUBPART 3.1.3.  Opinion.  The Agent shall have received an opinion,
      or opinions, satisfactory to the Agent, addressed to the Agent on behalf
      of the Lenders and dated as of the date hereof, from legal counsel to the
      Credit Parties, including, but not limited to, the authority of the
      Credit Parties to enter into this Amendment No. 1, the enforceability of
      this Amendment No. 1 and the consummation of the Merger.

           SUBPART 3.1.4.  Other Documents.  The Agent shall have received such
      other documents relating to the transactions contemplated hereby
      (including, without limitation, the



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      Merger) as the Agent or any Lender or counsel to the Agent may request.


                                    PART IV
                                    JOINDER

      As soon as practicable following the date on which the Merger is
consummated (the "Merger Date"), but in no event later than thirty (30) days
after the Merger Date, the Borrower shall:

           SUBPART 4.1.  Documents.

           SUBPART 4.1.1  Joinder Agreement.  Cause a Joinder Agreement in
      substantially the same form as Exhibit 8.13 to the Credit Agreement to be
      delivered to the Agent by each of the Company, Plastofilm Industries,
      Inc. and CFI Recycling, Inc. (collectively, the "New Guarantors").

           SUBPART 4.1.2.  Pledge Agreement.  Cause all of the capital stock of
      each New Guarantor to be delivered to the Agent (together with undated
      stock powers signed in blank) and pledged to the Agent pursuant to an
      appropriate pledge agreement in substantially the form of the Pledge
      Agreement and otherwise in a form acceptable to the Agent.

           SUBPART 4.1.3.  Security Agreement.  Cause each of the New
      Guarantors to pledge all of its assets to the Lenders pursuant to a
      security agreement in substantially the form of the Security Agreements
      and otherwise in a form acceptable to the Agent.

           SUBPART 4.2.  Personal Property Collateral.  Cause each of the New
      Guarantors to deliver to the Agent, in form and substance satisfactory to
      the Agent:

                 (i) searches of Uniform Commercial Code ("UCC") filings in
            each jurisdiction of the chief executive office of each New
            Guarantor and each jurisdiction where a filing would need to be
            made in order to perfect the Lenders' security interest in the
            assets of the New Guarantors (the "New Collateral"), copies of the
            financing statements on file in such jurisdictions and evidence
            that no Liens exist other than Permitted Liens;

                 (ii) duly executed financing statements under the UCC or
            similar legislation for each appropriate jurisdiction as is
            necessary, in the Agent's sole discretion, to perfect the Lenders'
            security interest in the New Collateral;

                 (iii) searches of ownership of intellectual property in the
            appropriate governmental offices and



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            such patent/trademark/copyright filings as requested by the Agent
            in order to perfect the Lenders' security interest in the
            intellectual property assets of the New Guarantors; and

                 (iv) all instruments and chattel paper in the possession of a
            New Guarantor together with allonges or assignments as may be
            necessary or appropriate to perfect the Lenders' security interest
            in the New Collateral.

            SUBPART 4.3.  Real Property Collateral.   Cause to be delivered to
      the Agent, in form and substance satisfactory to the Agent:

                 (i) a fully executed and notarized mortgage, deed of trust,
            deed to secure debt or hypothec in registerable form (the "New Fee
            Mortgage") encumbering the fee interest (whether legal, equitable
            or otherwise) of Plastofilm Industries, Inc. in the fee estate (or
            the equivalent form of title under applicable law) located in
            Wheaton, Illinois (the "Wheaton Property"), together with such
            UCC-1 financing statements (or equivalent instruments) as the Agent
            shall deem appropriate with respect to the Wheaton Property;

                 (ii) a fully executed and notarized mortgage, deed of trust or
            deed to secure debt (the "New Leasehold Mortgage;" the New
            Leasehold Mortgage and the New Fee Mortgage are collectively
            referred to as the "New Mortgages") encumbering the leasehold
            interest of Plastofilm Industries, Inc. in the leasehold estate
            located in Sparks, Nevada (the "Sparks Property;" the Sparks
            Property and the Wheaton Property are collectively referred to as
            the "New Real Properties"), together with such UCC-1 financing
            statements (or equivalent instruments) as the Agent shall deem
            appropriate with respect to the Sparks Property; provided that the
            New Leasehold Mortgage and UCC-1 financing statements (or
            equivalent instruments) shall not be required for the Sparks
            Property if the lease prohibits the same and the landlord or any
            other required party thereunder has not consented to the same after
            good faith efforts to obtain the same by the Credit Parties (for
            purposes of this subsection, good faith efforts shall not be deemed
            to include the filing of lawsuits or the payment of any
            consideration);

                 (iii) unless in any such case the Credit Parties are unable
            after good faith efforts to obtain the same (for purposes of this
            subsection, good faith efforts shall not be deemed to include the
            filing of lawsuits or the payment of any consideration) (A) in the
            case of



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            the Sparks Property and the leasehold estate located in Batavia,
            Illinois, such estoppel letters, consents and waivers from the
            landlords of such real property as may be reasonably required by
            the Agent, which estoppel letters shall be in form and substance
            reasonably satisfactory to the Agent and (B) in the case of the
            Sparks Property, evidence that the applicable lease, a memorandum
            of lease with respect thereto, or other evidence of such lease in
            form and substance reasonably satisfactory to the Agent, has been
            recorded in all places to the extent necessary or desirable, in the
            reasonable judgment of the Agent, so as to enable the New Leasehold
            Mortgage to effectively create a valid and enforceable lien
            (subject only to Permitted Liens) on the Sparks Property in favor
            of the Agent (or such other Person as may be required or desired
            under local law) for the benefit of Lenders;

                 (iv) an opinion of counsel (which counsel shall be
            satisfactory to the Agent) in the state or province in which each
            New Real Property is located with respect to the enforceability of
            the form of the New Mortgage and sufficiency of the form of UCC-1
            financing statements (or equivalent instruments) to be recorded or
            filed in such state or province and such other matters as the Agent
            may request, in form and substance satisfactory to the Agent;

                 (v) ALTA mortgagee title insurance policies (the "New Mortgage
            Policies") issued by Chicago Title Insurance Company (the "Title
            Insurance Company"), in amounts satisfactory to the Agent with
            respect to all New Real Properties, assuring the Agent that each
            applicable New Mortgage creates valid and enforceable mortgage
            liens on the respective New Real Property, free and clear of all
            defects and encumbrances except Permitted Liens, which New Mortgage
            Policies shall be in form and substance satisfactory to the Agent
            and containing such endorsements as shall be satisfactory to the
            Agent and for any other matters that the Agent may request, and
            shall provide for affirmative insurance and such reinsurance as the
            Agent may request, all of the foregoing in form and substance
            satisfactory to the Agent;

                 (vi) maps or plats of an as-built survey of the Wheaton
            Property certified to the Agent and the Title Insurance Company in
            a manner reasonably satisfactory to them, dated a date satisfactory
            to the Agent and the Title Insurance Company by an independent
            professional licensed land surveyor reasonably satisfactory to the
            Agent and the Title Insurance Company, which maps or plats and the
            surveys on which they are based shall be sufficient to delete any



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            standard printed survey exception contained in the applicable title
            policy and be made in accordance with the Minimum Standard Detail
            Requirements for Land Title Surveys jointly established and adopted
            by the American Land Title Association and the American Congress on
            Surveying and Mapping in 1992, and, without limiting the generality
            of the foregoing, there shall be surveyed and shown on such maps,
            plats or surveys the following: (A) the locations on such sites of
            all the buildings, structures and other improvements and the
            established building setback lines; (B) the lines of streets
            abutting the sites and width thereof; (C) all access and other
            easements appurtenant to the sites necessary to use the sites; (D)
            all roadways, paths, driveways, easements, encroachments and
            overhanging projections and similar encumbrances affecting the
            site, whether recorded, apparent from a physical inspection of the
            sites or otherwise known to the surveyor; (E) any encroachments on
            any adjoining property by the building structures and improvements
            on the sites; and (F) if the site is described as being on a filed
            map, a legend relating the survey to said map;

                 (vii) zoning letters from appropriate authorities in form and
            substance acceptable to the Agent or other evidence satisfactory to
            the Agent that each of the New Real Properties, and the uses of the
            New Real Properties, are in compliance in all material respects
            with all applicable zoning laws, including the zoning designation
            made for each of the New Real Properties, the permitted uses of
            each such New Real Properties under such zoning designation and
            zoning requirements as to parking, lot size, ingress, egress and
            building setbacks; and

                 (viii) certification from Bankers Hazard Determination
            Services or Borrower's land surveyor in a form reasonably
            satisfactory to the Agent or other evidence acceptable to the Agent
            that none of the improvements on the New Real Properties are
            located within any area designated by the Director of the Federal
            Emergency Management Agency as a "special flood hazard" area or if
            any improvements on the New Real Properties are located within a
            "special flood hazard" area, evidence of a flood insurance policy
            from a company and in an amount satisfactory to the Agent for the
            applicable portion of the premises, naming the Agent, for the
            benefit of the Lenders, as mortgagee.

            SUBPART 4.4.  Environmental Reports.  Cause to be delivered to the
      Agent, in form and substance satisfactory to the Agent, environmental
      site assessment reports and related documents of a recent date with
      respect to the Wheaton Property.


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<PAGE>   9



            SUBPART 4.5.  Corporate Documents.  Cause to be delivered to the
      Agent each of the following:

                 (i) Charter Documents.  Copies of the articles or certificates
            of incorporation or other charter documents of each New Guarantor,
            certified to be true and complete as of a recent date by the
            appropriate Governmental Authority of the state or other
            jurisdiction of its incorporation and certified by a secretary or
            assistant secretary of such New Guarantor to be true and correct as
            of the Merger Date.

                 (ii)  Bylaws.  A copy of the bylaws of each New Guarantor
            certified by a secretary or assistant secretary of such New
            Guarantor to be true and correct as of the Merger Date.

                 (iii)  Resolutions.  Copies of resolutions of the Board of
            Directors of each New Guarantor approving and adopting each
            document executed in accordance with Subpart 4.1 to which it is a
            party, the transactions contemplated therein and authorizing
            execution and delivery thereof, certified by a secretary or
            assistant secretary of such New Guarantor to be true and correct
            and in force and effect as of the Merger Date.

                 (iv)  Good Standing.  Copies of (A) certificates of good
            standing, existence or its equivalent with respect to each New
            Guarantor certified as of a recent date by the appropriate
            Governmental Authorities of the state or other jurisdiction of
            incorporation and each other jurisdiction in which the failure to
            so qualify and be in good standing would have a Material Adverse
            Effect and (B) to the extent available, a certificate indicating
            payment of all corporate franchise taxes certified as of a recent
            date by the appropriate governmental taxing authorities.

                 (v) Incumbency.  An incumbency certificate of each New
            Guarantor certified by a secretary or assistant secretary to be
            true and correct as of the Merger Date.

            SUBPART 4.6.  Opinion of Counsel.  Receipt by the Agent of an
      opinion, or opinions, satisfactory to the Agent, addressed to the Agent
      on behalf of the Lenders and dated as of the Merger Date, from legal
      counsel to the New Guarantors, including, but not limited to, opinions
      similar to those received from counsel to the Credit Parties in
      connection with the initial closing of the Existing Credit Agreement.



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           SUBPART 4.7.  Further Assurances.  Deliver or cause to be delivered
      to the Agent or Lender(s), as appropriate, such other documents,
      instruments, agreements or information as reasonably requested by the
      Agent or any Lender, including, but not limited to, information regarding
      litigation, tax, accounting, labor, insurance, pension liabilities
      (actual or contingent), real estate leases, material contracts, debt
      agreements, property ownership and contingent liabilities of the New
      Guarantors.


                                     PART V
                                 MISCELLANEOUS

           SUBPART 5.1.  Cross-References.  References in this Amendment No. 1
      to any Part or Subpart are, unless otherwise specified, to such Part or
      Subpart of this Amendment No. 1.

           SUBPART 5.2.  Instrument Pursuant to Existing Credit Agreement.
      This Amendment No. 1 is a Credit Document executed pursuant to the
      Existing Credit Agreement and shall (unless otherwise expressly indicated
      therein) be construed, administered and applied in accordance with the
      terms and provisions of the Existing Credit Agreement.

           SUBPART 5.3.  References in Other Credit Documents.  At such time as
      this Amendment No. 1 shall become effective pursuant to the terms of
      Subpart 3.1, all references in the Credit Documents to the "Credit
      Agreement" shall be deemed to refer to the Credit Agreement as amended by
      this Amendment No. 1.

           SUBPART 5.4.  Representations and Warranties.  Each Credit Party
      hereby represents and warrants that (i) each Credit Party that is party
      to the Merger Agreement and this Amendment No. 1:  (a) has the requisite
      corporate power and authority to execute, deliver and perform the Merger
      Agreement and this Amendment No. 1, as applicable and (b) is duly
      authorized to, and has been authorized by all necessary corporate action,
      to execute, deliver and perform the Merger Agreement or this Amendment
      No. 1, as applicable, (ii) the Merger constitutes a Permitted
      Acquisition, (iii) the only Subsidiaries to be acquired by the Borrower
      pursuant to the Merger are the Company, Plastofilm Ltd., Plastofilm
      Industries, Inc. and CFI Recycling, Inc., (iv) the only Real Property to
      be acquired pursuant to the Merger is described on the new Schedule
      7.23(a) and the locations of all personal property acquired pursuant to
      the Merger are described on the new Schedule 7.23(b), (v) the Borrower
      has no claims, counterclaims, offsets, or defenses to the Credit
      Documents and the performance of its obligations thereunder, or if the
      Borrower has any such claims, counterclaims, offsets, or defenses to the
      Credit Documents or any transaction related to the Credit Documents, the
      same are hereby waived,



                                    -10-


<PAGE>   11

      relinquished and released in consideration of the Lenders' execution and
      delivery of this Amendment No. 1, (vi) since the date of the last
      financial statements of the Borrower delivered to the Lenders, no event
      or condition has occurred which has had or could have a Material Adverse
      Effect, (vii) the representations and warranties contained in Section 7
      of the Existing Credit Agreement are correct on and as of the date hereof
      as though made on and as of such date and after giving effect to the
      amendments contained herein and (vii) no Default or Event of Default
      exists under the Existing Credit Agreement on and as of the date hereof
      or will occur as a result of the transactions contemplated hereby.

           SUBPART 5.5.  Liens.  The Borrower and the Guarantors, as
      applicable, affirm the liens and security interests created and granted
      in the Credit Documents and agree that this Amendment No. 1 shall in no
      manner adversely effect or impair such liens and security interest.

           SUBPART 5.6.  Acknowledgement of Guarantors.  The Guarantors
      acknowledge and consent to all of the terms and conditions of this
      Amendment No. 1 and agree that this Amendment No. 1 and all documents
      executed in connection herewith do not operate to reduce or discharge the
      Guarantors' obligations under the Credit Agreement or the other Credit
      Documents.  The Guarantors further acknowledge and agree that the
      Guarantors have no claims, counterclaims, offsets, or defenses to the
      Credit Documents and the performance of the Guarantors' obligations
      thereunder or if the Guarantors did have any such claims, counterclaims,
      offsets or defenses to the Credit Documents or any transaction related to
      the Credit Documents, the same are hereby waived, relinquished and
      released in consideration of the Lenders' execution and delivery of this
      Amendment No. 1.

           SUBPART 5.7.  No Other Changes.  Except as expressly modified and
      amended in this Amendment No. 1, all the terms, provisions and
      conditions of the Credit Documents shall remain unchanged.

           SUBPART 5.8.  Counterparts.  This Amendment No. 1 may be executed by
      the parties hereto in several counterparts, each of which shall be deemed
      to be an original and all of which shall constitute together but one and
      the same agreement.

           SUBPART 5.9.  Entirety.  This Amendment No. 1, the Credit Agreement
      and the other Credit Documents embody the entire agreement between the
      parties and supersede all prior agreements and understandings, if any,
      relating to the subject matter hereof.  These Credit Documents represent
      the final agreement between the parties and may not be contradictive by
      evidence of prior, contemporaneous or subsequent oral agreements of the
      parties.



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<PAGE>   12



           SUBPART 5.10.  Governing Law. THIS AMENDMENT NO. 1 SHALL BE
      DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
      LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
      CONFLICT OF LAW PRINCIPLES THEREOF.

           SUBPART 5.11.  Successors and Assigns.  This Amendment No. 1
      shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



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<PAGE>   13





     This Amendment No. 1 is executed as of the day and year first written
above.


BORROWER:                        IPC, INC.                              
--------                                                                
                                 a Delaware corporation                 
                                                                        
                                 By:____________________________        
                                 Name:  Richard R. Cote                 
                                 Title:  Vice President and Treasurer   
                                                                        
                                                                        
GUARANTORS:                      IVEX PACKAGING CORPORATION             
----------                                                              
                                 a Delaware corporation                 
                                                                        
                                 By:____________________________        
                                 Name:  Richard R. Cote                 
                                 Title:  Vice President and Treasurer   
                                                                        
                                                                        
                                 IVEX PAPER MILL CORPORATION            
                                 a Delaware corporation                 
                                                                        
                                 By:____________________________        
                                 Name:  Richard R. Cote                 
                                 Title:  Vice President and Treasurer   
                                                                        
                                                                        
                                 IPMC HOLDING CORPORATION               
                                 a Delaware corporation                 
                                                                        
                                 By:____________________________        
                                 Name:  Richard R. Cote                 
                                 Title:  Vice President and Treasurer   
                                                                        
                                                                        
                                 IPMC, INC.                             
                                 a Delaware corporation                 
                                                                        
                                 By:____________________________        
                                 Name:  Richard R. Cote                 
                                 Title:  Vice President and Treasurer   
                                                                        
                                                                        
                                                                        


<PAGE>   14
                    
                    
                    
                    
                    
                                 VALLEY EXPRESS LINES, INC.
                                 a Delaware corporation
                    
                                 By:____________________________
                                 Name:  Richard R. Cote
                                 Title:  Vice President and Treasurer
                    
                    
                                 KAMA OF ILLINOIS CORPORATION
                                 a Delaware corporation
                    
                                 By:____________________________
                                 Name:  Richard R. Cote
                                 Title:  Vice President and Treasurer
                    
                    
                    
                    
                    
<PAGE>   15
                    
                    
                    
                    
                                 PACKAGING PRODUCTS, INC.
                                 a Delaware corporation
                    
                                 By:____________________________
                                 Name:  Richard R. Cote
                                 Title:  Vice President and Treasurer
                    
                    
                                 IVEX CORPORATION
                                 an Ontario corporation
                    
                    
                                 By:____________________________
                                 Name:  Richard R. Cote
                                 Title:  Vice President and Treasurer


                                 PACKAGE ACQUISITION, INC.
                                 a Delaware corporation


                                 By:____________________________
                                 Name:  Richard R. Cote
                                 Title:  Vice President and Treasurer





<PAGE>   16




LENDERS:                         NATIONSBANK, N.A.
-------                          individually in its capacity as a 
                                 Lender and in its capacity as
                                 Agent

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 BANKERS TRUST COMPANY

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 GENERAL ELECTRIC CAPITAL CORPORATION

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 SOCIETE GENERALE, SOUTHWEST AGENCY

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 BANQUE PARIBAS

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 ABN AMRO BANK, N.V., HOUSTON AGENCY
<PAGE>   17


                                 BY:  ABN AMRO NORTH AMERICA, INC.,
                                      AS AGENT


                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________

                                 BANK OF BOSTON (F/K/A FIRST NATIONAL BANK OF
                                 BOSTON)

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________


                                 FIRST BANK NATIONAL ASSOCIATION

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________


                                 MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________


                                 VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME
                                 TRUST

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________


<PAGE>   18

                                 SENIOR DEBT PORTFOLIO

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________


                                 IMPERIAL BANK

                                 By:_____________________________
                                 Name:___________________________
                                 Title__________________________