SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT



         THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (hereinafter

referred to as the "Amendment") is made and entered into as of this 3rd day of

June, 2002, but effective as of May 31, 2002, between and among, on the one

hand, the lenders identified on the signature pages hereof (such lenders,

together with their respective successors and assigns, are referred to

hereinafter each individually as a "Lender" and collectively as the "Lenders"),

FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and

administrative agent for the Lenders ("Agent"), and, on the other hand, PCI

CHEMICALS CANADA COMPANY, a Nova Scotia unlimited liability company, and PIONEER

AMERICAS LLC, a Delaware limited liability company (hereinafter each

individually is referred to as a "Borrower" and collectively as the

"Borrowers").



                                    RECITALS



         A. Agent, the Lenders and the Borrowers have entered into that certain

Loan and Security Agreement, dated as of December 31, 2001 (as amended by that

certain First Amendment to Loan and Security Agreement dated as of April 15,

2002, herein the "AGREEMENT").



         B. Agent, the Lenders and the Borrowers desire to amend the Agreement

as hereinafter set forth.



         NOW, THEREFORE, in consideration of the premises herein contained and

other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the parties, intending to be legally bound, hereby agree as

follows:



                                    ARTICLE I

                                   DEFINITIONS



         Section 1.01. Definitions. Capitalized terms used in this Amendment, to

the extent not otherwise defined herein, shall have the same meaning as in the

Agreement, as amended hereby.



                                   ARTICLE II

                                   AMENDMENTS



         Section 2.01. New Definition of Adjusted EBITDA. The definition of

"Adjusted EBITDA" is hereby added to Section 1.1 of the Agreement which shall

read in its entirety to read as follows:



                  "Adjusted EBITDA" means, EBITDA minus income from call

         premiums with respect to derivatives to which Parent or any of its

         Subsidiaries is a party or which were entered into for the benefit of

         Parent or any of its Subsidiaries, minus the gains from the closing or

         settlement of open derivative positions to which Parent or any of its

         Subsidiaries is a party or which were entered into for the benefit of

         Parent or any of its Subsidiaires, plus the losses from the closing or

         settlement of open derivative positions to which Parent or any of its

         Subsidiaries is a party or which were entered into for the benefit of

         Parent or any of its Subsidiaries, except to the extent that such

         losses are paid by Parent or any of its Subsidiaries.



         Section 2.02. Amendment to Definition of Excess Availability. The

definition of "Excess Availability" is hereby amended and restated in its

entirety to read as follows:



                  "Excess Availability" means the amount, as of the date any

         determination thereof is to be made, equal to Availability minus the

         aggregate amount, if any, of all trade





SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT - Page 1

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         payables of Borrowers aged in excess of 30 days beyond the due date

         (but in no event to exceed 90 days beyond the invoice date) with

         respect thereto and all book overdrafts in excess of their historical

         practices with respect thereto, as determined by Agent in its Permitted

         Discretion.



         Section 2.03. New Definition of Liquidity. The definition of

"Liquidity" is hereby added to Section 1.1 of the Agreement which shall read in

its entirety as follows:



                  "Liquidity" means, with respect to Borrowers, the amount of

         unrestricted cash on hand plus Excess Availability.



         Section 2.04. New Definition of Notes to Professionals. The definition

of "Notes to Professionals" is hereby added to Section 1.1 of the Agreement

which shall read in its entirety as follows:



                  "Notes to Professionals" means (a) Pioneer Companies, Inc.

         Promissory Note dated May 15, 2002, in the stated principal amount of

         $2,806,554.09, executed by Pioneer Companies, inc., and payable to the

         order of Dresdner Kleinwood Wasserstein, Inc., and (b) Pioneer

         Companies, Inc. Promissory Note dated May 15, 2002, in the stated

         principal amount of $621,439.85 executed by Pioneer Companies, Inc.,

         and payable to the order of Houlihan Lokey Howard & Zukin Capital.



         Section 2.05. New Definition of Supplier Credit Agreements. The

definition of "Supplier Credit Agreements" is hereby added to Section 1.1 of the

Agreement which shall read in its entirety as follows:



                  "Supplier Credit Agreements" means those certain contracts and

         agreements described in Schedule S-1 hereto and any similar contracts

         and agreements entered into between a Borrower and one of its vendors.



         Section 2.06. Amendment to Section 2.6(b). EFFECTIVE AS OF FEBRUARY 1,

2002, Section 2.6(b) of the Agreement is hereby amended and restated in its

entirety to read as follows:



                  (b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the

         ratable benefit of the Lenders, subject to any letter agreement between

         Agent and individual Lenders), a Letter of Credit fee (in addition to

         the charges, commissions, fees, and costs set forth in Section 2.12(e))

         which shall accrue at a rate equal to 4.25% per annum times the Daily

         Balance of the undrawn amount of all outstanding Letters of Credit.



         Section 2.07. New Section 6.20. A new Section 6.20 is hereby added to

the Agreement which shall read in its entirety as follows:



                  6.20 ACCOUNTS PAYABLE AND INDEBTEDNESS. Pay all of its

         accounts payable (including, without limitation, all amounts owing

         under the Supplier Credit Agreement) within 60 days of the respective

         scheduled due dates thereof, and pay its Indebtedness as and when due.



         Section 2.08. Amendment to Section 7.1. Section 7.1 of the Agreement is

hereby amended by adding a new subsection (e) which shall read in its entirety

as follows:



                  (e)  Notes to Professionals.



         Section 2.09. Amendment to Section 7.20. Section 7.20 of the Agreement

is hereby amended and restated in its entirety to read as follows:

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