<PAGE>
 
                                                                   Exhibit 10(y)
                                AMENDMENT NO. 2
                                ---------------


          AMENDMENT NO. 2 dated as of December 30, 1996 to Revolving Credit and
Term Loan Agreement dated as of October 31, 1995 (as the same was heretofore
amended by an Amendment No. 1 dated as of April 30, 1996, the "Credit
Agreement") by and among Guest Supply, Inc., Guest Packaging, Inc. and
Breckenridge-Remy Co. (collectively, the "Borrower") and PNC Bank, National
Association and First Union National Bank, formerly known as First Fidelity
Bank, N.A. (each a "Lender" and collectively the "Lenders") and PNC Bank,
National Association as agent for the Lenders (in such capacity, the "Agent").
Capitalized terms used herein and not defined herein are used herein as defined
in the Credit Agreement.

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement in order to amend a certain financial covenant contained therein; and

          WHEREAS, the Lenders are willing to amend the Credit Agreement to
reflect such change and make such other revisions as the Lenders deem
appropriate and desirable.

          NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter contained, the parties hereto agree as follows:

          1.   All references to this "Agreement" shall refer to the Credit
Agreement, as amended by Amendment No. 1 and this Amendment No. 2, and as the
same may hereafter be amended, supplemented or otherwise modified from time to
time.

          2.   As of the effective date hereof:

          (a)  Section 6.14 is hereby amended in its entirety as follows:

               "6.14 Cash Flow Test.  Permit the Cash Flow Test Ratio,
                     --------------                                   
               applicable to each quarter of GSI independently (and not in
               relation to four consecutive quarters as had previously been the
               case) to be less than 1.00 at the quarter ending June 30, 1996;
               less than 1.40 at the quarter ending September 30, 1996, less
               than 1.50 at each quarter ending December 31, 1996
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               and March 31, 1997; thereafter, from the quarter ending June 30,
               1997 through the Maturity Date, not permit the Cash Flow Ratio
               Test to be less than 1.50 at the end of any period of four
               consecutive fiscal quarters of GSI; provided however, that the
                                                   ----------------          
               Cash Flow Ratio Test shall not be applied at all to GSI's quarter
               ending March 31, 1996."

          3.   In consideration of the Lenders' agreeing to enter into this
Amendment No. 2, on or before the effective date hereof Borrower shall pay to
the Agent for the benefit of and disbursement to the Lenders, an amendment fee
of $3,500 of which $2,187.50 is payable to PNC and $1,312.50 is payable to First
Union.

          4.   In order to induce the Lenders to enter into this Amendment No.
2, the Borrower makes the following representations and warranties which shall
survive the execution and delivery hereof:

               (a)  All of the representations made by or on behalf of the
               Borrower in the Credit Agreement are true on and as of the date
               hereof;

               (b)  This Amendment No. 2 has been duly authorized, executed and
               delivered by the Borrower;

               (c)  Neither the execution and delivery of this Amendment No. 2
               by the Borrower, nor consummation by the Borrower of the
               transactions herein contemplated, nor compliance by the Borrower
               with the terms, conditions and provisions hereof will conflict
               with or result in a breach of any of the terms, conditions or
               provisions of (i) the Borrower's Certificate of Incorporation or
               By-Laws, (ii) any agreement or instrument to which the Borrower
               is now a party or by which the Borrower, or to which the property
               of the Borrower, is, or may be, bound, or constitute a default
               thereunder, or result thereunder in the creation or imposition of
               any security interest, mortgage, lien, charge or encumbrance or
               any nature whatsoever upon any of the properties or assets of the
               Borrower, or (iii) any judgment or order, writ, injunction or
               decree of any court; and
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               (d)  No action of, or filing with, any governmental or public
               body or authority is required to authorize, or is otherwise
               required in connection with, the execution, delivery and
               performance of this Amendment No. 2 by the Borrower.

          5.   This Amendment No. 2 shall become effective upon receipt by the
Agent on behalf of the Lenders of a fully executed original hereof.

          6.   Except as expressly amended by this Amendment No. 2 all terms and
provisions of the Credit Agreement, and all rights of the Lenders and all
obligations of the Borrower thereunder shall remain in full force and effect.
<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 2 as of the 30th day of December, 1996.

                                 BORROWERS:                                 
                                 ---------                                  
                                                                            
                                                                            
                                 QUEST SUPPLY, INC.                         
                                                                            
                                                                            
                                 By:  ____________________                  
                                       Name:     P. Xenis                   
                                       Title:    Vice President             
                                                 of Finance                 
                                                                            
                                 GUEST PACKAGING, INC.                      
                                                                            
                                                                            
                                 By:  ____________________                  
                                       Name:     P. Xenis                   
                                       Title:    Vice President             
                                                 of Finance                 
                                                                            
                                 BRECKENRIDGE-REMY CO.                      
                                                                            
                                                                            
                                 By:  ____________________                  
                                       Name:     P. Xenis                   
                                       Title:    Vice President             
                                                 of Finance                 
                                                                            
                                 LENDERS:                                   
                                 -------                                    
                                                                            
                                 PNC BANK, NATIONAL ASSOCIATION             
                                                                            
                                                                            
                                 By:  ____________________                  
                                       Name:     Kevin D. Drew              
                                       Title:    Vice President             
                                                                            
                                 FIRST UNION NATIONAL BANK FORMERLY KNOWN 
                                 AS FIRST FIDELITY BANK, N.A.               
                                                                              
                                                                              
                                 By:  ____________________                    
                                       Name:     James T. King                
                                       Title:    Vice President               
<PAGE>
 
                                 AGENT:                        
                                 -----                         
                                                               
                                 PNC BANK, NATIONAL ASSOCIATION
                                                               
                                                               
                                 By:  ____________________     
                                       Name:     Kevin D. Drew 
                                       Title:    Vice President