<PAGE>
                                                                     EXHIBIT 2.1

                                                            CONFORMED TO INCLUDE
                                                                 PLAN AMENDMENTS

                         UNITED STATES BANKRUPTCY COURT
                           SOUTHERN DISTRICT OF TEXAS
                                HOUSTON DIVISION

---------------------------------------------------
                                                    :
In re:                                              :    CHAPTER 11
                                                    :
PIONEER COMPANIES, INC.,                            :
PIONEER CORPORATION OF AMERICA,                     :
IMPERIAL WEST CHEMICAL CO.,                         :
KEMWATER NORTH AMERICA CO.,                         :
PCI CHEMICALS CANADA INC./PCI,                      :    Case No. 01-38259-H3-11
CHIMIE CANADA INC.,                                 :
PIONEER AMERICAS, INC.,                             :
PIONEER (EAST), INC.,                               :
PIONEER WATER TECHNOLOGIES, INC.,                   :
PIONEER LICENSING, INC., and                        :
KWT, INC.,                                          :    JOINTLY ADMINISTERED
                                                    :
                                                    :
                  Debtors.                          :
---------------------------------------------------

                  DEBTORS' AMENDED JOINT PLAN OF REORGANIZATION
                     UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

                                                  WEIL, GOTSHAL & MANGES LLP
                                                  Attorneys for the Debtors
                                                  700 Louisiana, Suite 1600
                                                  Houston, Texas 77002
                                                  (713) 546-5000

                                                              and

                                                  100 Crescent Court, Suite 1300
                                                  Dallas, Texas  75201
                                                  (214) 746-7700

Dated:  Houston, Texas
        September 21, 2001
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                                TABLE OF CONTENTS

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ARTICLE I. DEFINITIONS AND CONSTRUCTION OF TERMS..........................................................      1

         1.1   Ad Hoc Committee...........................................................................      1

         1.2   Administrative Expense Claim...............................................................      1

         1.3   Allowed....................................................................................      2

         1.4   Amended PCI Bylaws.........................................................................      2

         1.5   Amended PCI Certificate of Incorporation...................................................      2

         1.6   Avoidance Claims...........................................................................      2

         1.7   Ballot.....................................................................................      2

         1.8   Balloting Agent............................................................................      2

         1.9   Balloting Deadline.........................................................................      2

         1.10  Bankruptcy Code............................................................................      2

         1.11  Bankruptcy Court...........................................................................      3

         1.12  Bankruptcy Rules...........................................................................      3

         1.13  BNY........................................................................................      3

         1.14  Business Day...............................................................................      3

         1.15  Canadian Court.............................................................................      3

         1.16  Canadian Deficiency Claims.................................................................      3

         1.17  Canadian Plan..............................................................................      3

         1.18  Canadian Proceedings.......................................................................      3

         1.19  Canadian Secured Term and Note Claims......................................................      3

         1.20  Cash.......................................................................................      3

         1.21  Causes of Action...........................................................................      3

         1.22  CCAA.......................................................................................      3

         1.23  CCAA Order.................................................................................      3

         1.24  Chapter 11 Cases...........................................................................      4

         1.25  Claim......................................................................................      4

         1.26  Class......................................................................................      4

         1.27  Class 8 and Class 9 Distribution...........................................................      4

         1.28  Class 9 Distribution.......................................................................      4

         1.29  Clerk......................................................................................      4
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         1.30  Collateral.................................................................................      4

         1.31  Commencement Date..........................................................................      4

         1.32  Confirmation Date..........................................................................      4

         1.33  Confirmation Hearing.......................................................................      4

         1.34  Confirmation Order.........................................................................      4

         1.35  Congress...................................................................................      4

         1.36  Congress Secured Claim.....................................................................      4

         1.37  Convenience Claim..........................................................................      4

         1.38  Creditors' Committee.......................................................................      5

         1.39  Debtors....................................................................................      5

         1.40  Debtors in Possession......................................................................      5

         1.41  DIP Facility...............................................................................      5

         1.42  Disbursing Agents..........................................................................      5

         1.43  Disclosure Statement.......................................................................      5

         1.44  Disputed...................................................................................      5

         1.45  Disputed Claim Amount......................................................................      5

         1.46  Docket.....................................................................................      5

         1.47  Effective Date.............................................................................      5

         1.48  Environmental Claim........................................................................      6

         1.49  Equity Interest............................................................................      6

         1.50  ERISA......................................................................................      6

         1.51  Estates....................................................................................      6

         1.52  Existing Credit Facility...................................................................      6

         1.53  Exit Facility..............................................................................      6

         1.54  Exit Facility Lenders......................................................................      6

         1.55  File, Filed, or Filing.....................................................................      6

         1.56  Final Order................................................................................      6

         1.57  General Unsecured Claim....................................................................      7

         1.58  Guarantees.................................................................................      7

         1.59  Imperial...................................................................................      7
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         1.60  Indenture Trustees.........................................................................      7

         1.61  Indenture Trustees' Expenses...............................................................      7

         1.62  Initial Distribution Date..................................................................      7

         1.63  Insured Claim..............................................................................      7

         1.64  Intercompany Claim.........................................................................      7

         1.65  KNA........................................................................................      7

         1.66  KWT........................................................................................      7

         1.67  LIBOR Rate.................................................................................      7

         1.68  Lien.......................................................................................      8

         1.69  MEIP.......................................................................................      8

         1.70  New Board of Directors.....................................................................      8

         1.71  New Common Stock...........................................................................      8

         1.72  New Indenture Trustee......................................................................      8

         1.73  New Notes..................................................................................      8

         1.74  New Other Secured Notes....................................................................      8

         1.75  New Tranche A Term Notes...................................................................      8

         1.76  New Tranche A Term Loan Agreement..........................................................      8

         1.77  New Tranche A Term Notes Agent.............................................................      8

         1.78  New Tranche B Notes........................................................................      8

         1.79  New Tranche B Notes Indenture..............................................................      8

         1.80  New Tranche B Notes Indenture Trustee......................................................      8

         1.81  Order......................................................................................      9

         1.82  Other Priority Claim.......................................................................      9

         1.83  Other Secured Claim........................................................................      9

         1.84  PAI........................................................................................      9

         1.85  PBGC.......................................................................................      9

         1.86  PCA........................................................................................      9

         1.87  PCA Canadian Term Loan Agreement...........................................................      9

         1.88  PCA Canadian Term Loan Agreement Administrative Agent......................................      9

         1.89  PCA U.S. Secured Term and Note Claims......................................................      9
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                                      iii
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         1.90  PCA Senior Notes...........................................................................      9

         1.91  PCA Senior Notes Indenture.................................................................      9

         1.92  PCA Senior Notes Indenture Trustee.........................................................      9

         1.93  PCA U.S. Term Loan Agreement...............................................................      9

         1.94  PCA U.S. Term Loan Agreement Administrative Agent..........................................      9

         1.95  PCI........................................................................................      9

         1.96  PCI Equity Interest........................................................................     10

         1.97  PCICC......................................................................................     10

         1.98  PCICC Senior Notes.........................................................................     10

         1.99  PCICC Senior Notes Indenture...............................................................     10

         1.100 PCICC Senior Notes Indenture Trustee.......................................................     10

         1.101 Pioneer....................................................................................     10

         1.102 Pioneer 2000 Group.........................................................................     10

         1.103 Pioneer 2000 Group Claims..................................................................     10

         1.104 Pioneer East...............................................................................     10

         1.105 Pioneer Licensing..........................................................................     10

         1.106 Plan.......................................................................................     10

         1.107 Plan Documents.............................................................................     10

         1.108 Plan Supplement............................................................................     10

         1.109 Priority Tax Claim.........................................................................     10

         1.110 Pro Rata Share.............................................................................     10

         1.111 Professionals..............................................................................     11

         1.112 Protocol...................................................................................     11

         1.113 PWT........................................................................................     11

         1.114 Quarter....................................................................................     11

         1.115 Record Date................................................................................     11

         1.116 Registration Rights Agreement..............................................................     11

         1.117 Reorganized Debtors........................................................................     11

         1.118 Reorganized PAI............................................................................     11

         1.119 Reorganized PCI............................................................................     11
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         1.120 Reorganized PCICC..........................................................................     11

         1.121 Reorganized Pioneer........................................................................     11

         1.122 Reorganized Subsidiaries...................................................................     11

         1.123 Reserve....................................................................................     11

         1.124 Retirement Plans...........................................................................     12

         1.125 Schedules..................................................................................     12

         1.126 Secured Claim..............................................................................     12

         1.127 Secured Tax Claim..........................................................................     12

         1.128 Subordinated Claim.........................................................................     12

         1.129 Subsequent Distribution Date...............................................................     12

         1.130 Subsidiary.................................................................................     12

         1.131 Subsidiary Equity Interest.................................................................     12

         1.132 Surplus Distributions......................................................................     12

         1.133 Tort Claim.................................................................................     12

         1.134 Unsecured Claim............................................................................     12

         1.135 U.S. Deficiency Claims.....................................................................     13

         1.136 U.S. Trust.................................................................................     13

         1.137 Voting Deadline............................................................................     13

         1.138 New Tranche A Credit Facility..............................................................     13

         1.139 New Tranche A Indenture....................................................................     13

         1.140 New Tranche A Indenture Trustee............................................................     13

         1.141 New Tranche A Indenture Notes..............................................................     13

         1.142 New Tranche A Loan Notes...................................................................     13

         1.143 City of Tacoma.............................................................................     13

         1.144 City of Tacoma Secured Claims..............................................................     13

         1.145 Interpretation; Application of Definitions and Rules of Construction.......................     13

ARTICLE II. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS............................     14

         2.1   Administrative Expense Claims..............................................................     14

         2.2   Professional Compensation and Reimbursement Claims.........................................     14
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                                       v
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         2.3   Priority Tax Claims........................................................................     14

ARTICLE III. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS................................................     15

ARTICLE IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS......................................................     16

         4.1   CLASS 1 - OTHER PRIORITY CLAIMS............................................................     16

         4.2   CLASS 2 - CONGRESS SECURED CLAIMS..........................................................     16

         4.3   CLASS 3 - PCA U.S. SECURED TERM AND NOTE CLAIMS............................................     16

         4.4   CLASS 4 - CANADIAN SECURED TERM AND NOTE CLAIMS............................................     17

         4.5   CLASS 5 - SECURED TAX CLAIMS...............................................................     17

         4.6   CLASS 6 - OTHER SECURED CLAIMS.............................................................     18

         4.6.1 CLASS 6.1 - CITY OF TACOMA SECURED CLAIMS..................................................     18

         4.7   CLASS 7 - CONVENIENCE CLAIMS...............................................................     19

         4.8   CLASS 8 - GENERAL UNSECURED CLAIMS.........................................................     19

         4.9   CLASS 9 - CANADIAN DEFICIENCY CLAIMS AND U.S. DEFICIENCY CLAIMS............................     19

         4.10  CLASS 10 - SUBORDINATED CLAIMS.............................................................     20

         4.11  CLASS 11 - PCI EQUITY INTERESTS............................................................     20

         4.12  Modification of Treatment of Claims........................................................     20

ARTICLE V. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN AND TREATMENT OF DISPUTED,
           CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE EXPENSE CLAIMS, CLAIMS AND EQUITY INTERESTS.........     20

         5.1   Voting of Claims...........................................................................     20

         5.2   Nonconsensual Confirmation.................................................................     20

         5.3   Method of Distributions Under the Plan.....................................................     21

         5.4   Objections to and Resolution of Administrative Expense Claims, Claims and Equity Interests.     24

         5.5   Distributions Relating to Allowed Insured Claims...........................................     24

ARTICLE VI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES......................................................     25

         6.1   Assumption or Rejection of Executory Contracts and Unexpired Leases........................     25

         6.2   Indemnification Obligations................................................................     26

         6.3   Modified Compensation and Benefit Programs.................................................     27
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         6.4   Retiree Benefits...........................................................................     27

ARTICLE VII. CONSOLIDATION OF PCI AND THE SUBSIDIARIES....................................................     27

         7.1   Restructuring Transactions.................................................................     27

         7.2   Order of Transactions......................................................................     30

         7.3   Approval and Acknowledgment................................................................     30

         7.4   Substantive Consolidation..................................................................     31

         7.5   Issuance and Transfers of Common Stock of the Subsidiaries.................................     31

         7.6   Merger of Corporate Entities...............................................................     31

ARTICLE VIII. PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENT OF THE REORGANIZED DEBTORS.........     32

         8.1   General....................................................................................     32

         8.2   Meetings of Reorganized PCI Stockholders...................................................     32

         8.3   Directors and Officers of Reorganized Debtors..............................................     32

         8.4   Amended Bylaws and Amended Certificates of Incorporation...................................     33

         8.5   Issuance of New Securities.................................................................     33

         8.6   Management Equity Incentive Plan...........................................................     33

ARTICLE IX. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF PLAN.............................................     34

         9.1   Means for Implementation of the Plan.......................................................     34

         9.2   Term of Bankruptcy Injunction or Stays.....................................................     38

         9.3   Revesting of Assets........................................................................     38

         9.4   Causes of Action...........................................................................     38

         9.5   Discharge of Debtors.......................................................................     39

         9.6   Injunction.................................................................................     39

ARTICLE X. EFFECTIVENESS OF THE PLAN......................................................................     40

         10.1  Conditions Precedent to Effectiveness......................................................     40

         10.2  Effect of Failure of Conditions............................................................     40

         10.3  Waiver of Conditions to Confirmation and Effective Date....................................     41

         10.4  Effects of Plan Confirmation...............................................................     41

ARTICLE XI. RETENTION OF JURISDICTION.....................................................................     43

ARTICLE XII. MISCELLANEOUS PROVISIONS.....................................................................     44

         12.1  Effectuating Documents and Further Transactions............................................     44
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         12.2  Exemption from Transfer Taxes..............................................................     44

         12.3  Termination of Committee...................................................................     44

         12.4  Post-Confirmation Date Fees and Expenses...................................................     44

         12.5  Payment of Statutory Fees..................................................................     44

         12.6  Amendment or Modification of the Plan......................................................     45

         12.7  Severability...............................................................................     45

         12.8  Revocation or Withdrawal of the Plan.......................................................     45

         12.9  Binding Effect.............................................................................     45

         12.10 Notices....................................................................................     45

         12.11 Governing Law..............................................................................     46

         12.12 Withholding and Reporting Requirements.....................................................     46

         12.13 Plan Supplement............................................................................     46

         12.14 Voting for Purposes of the Canadian Plan...................................................     46

         12.15 Allocation of Plan Distributions Between Principal and Interest............................     47

         12.16 Headings...................................................................................     47

         12.17 Exhibits/Schedules.........................................................................     47

         12.18 Filing of Additional Documents.............................................................     47

         12.19 No Admissions..............................................................................     47
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                                      viii
<PAGE>
                                                            CONFORMED TO INCLUDE
                                                                 PLAN AMENDMENTS

                         UNITED STATES BANKRUPTCY COURT
                           SOUTHERN DISTRICT OF TEXAS
                                HOUSTON DIVISION

-----------------------------------------------------
                                                     :
In re:                                                   CHAPTER 11
                                                     :
PIONEER COMPANIES, INC.,                             :
PIONEER CORPORATION OF AMERICA,                      :
IMPERIAL WEST CHEMICAL CO.,                          :
KEMWATER NORTH AMERICA CO.,                          :
PCI CHEMICALS CANADA INC./PCI,                           Case No. 01-38259-H3-11
CHIMIE CANADA INC.,                                  :
PIONEER AMERICAS, INC.,                              :
PIONEER (EAST), INC.,                                :
PIONEER WATER TECHNOLOGIES, INC.,                    :
PIONEER LICENSING, INC., and                         :
KWT, INC.,                                           :
                                                     :
                                                         JOINTLY ADMINISTERED
                  Debtors.                           :
-----------------------------------------------------

                  DEBTORS' AMENDED JOINT PLAN OF REORGANIZATION
                     UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

      Pioneer Companies, Inc. and its affiliate Debtors propose the following
amended joint plan of reorganization under section 1121(a) of title 11 of the
United States Code:

                                   ARTICLE I.

                      DEFINITIONS AND CONSTRUCTION OF TERMS

      Definitions. As used herein, the following terms have the respective
meanings specified below, unless the context otherwise requires:

      1.1 Ad Hoc Committee means the unofficial committee of certain holders of
PCA U.S. Secured Term and Note Claims and Canadian Secured Term and Note Claims,
and as described in the Disclosure Statement.

      1.2 Administrative Expense Claim means any right to payment constituting a
cost or expense of administration of any of the Chapter 11 Cases under sections
503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, any
Claims arising under the DIP Facility, any actual and necessary costs and
expenses of preserving the Estates of the Debtors, any actual and necessary
costs and expenses of operating the
<PAGE>
business of the Debtors, any indebtedness or obligations incurred or assumed by
the Debtors in Possession in connection with the conduct of their business,
including, without limitation, for the acquisition or lease of property or an
interest in property or the rendition of services, all compensation and
reimbursement of expenses to the extent Allowed by the Bankruptcy Court under
section 330 or 503 of the Bankruptcy Code, and any fees or charges assessed
against the Estates of the Debtors under section 1930 of chapter 123 of title 28
of the United States Code.

      1.3 Allowed means, with reference to any Claim, (a) any Claim against the
Debtors which has been listed by the Debtors in their Schedules, as such
Schedules may be amended by the Debtors from time to time in accordance with
Bankruptcy Rule 1009, as liquidated in amount and not disputed or contingent and
for which no contrary proof of claim or interest has been filed, (b) any Claim
allowed hereunder, (c) any Claim which is not Disputed, or (d) any Claim which,
if Disputed, (i) as to which, pursuant to the Plan or a Final Order of the
Bankruptcy Court, the liability of the Debtors and the amount thereof are
determined by a final order of a court of competent jurisdiction other than the
Bankruptcy Court, or (ii) has been Allowed by Final Order; provided, however,
that any Claims allowed solely for the purpose of voting to accept or reject the
Plan pursuant to an order of the Bankruptcy Court shall not be considered
"Allowed Claims" hereunder. Unless otherwise specified herein or by order of the
Bankruptcy Court, "Allowed Administrative Expense Claim," or "Allowed Claim,"
shall not, for purposes of computation of distributions under the Plan, include
interest on such Administrative Expense Claim or Claim from and after the
Commencement Date.

      1.4 Amended PCI Bylaws means the amended and restated Bylaws of
Reorganized PCI, which shall be in substantially the form contained in the Plan
Supplement.

      1.5 Amended PCI Certificate of Incorporation means the amended and
restated Certificate of Incorporation of Reorganized PCI, which shall be in
substantially the form contained in the Plan Supplement.

      1.6 Avoidance Claims means all fraudulent transfer Causes of Action under
sections 544, 548 and 550 of the Bankruptcy Code or otherwise applicable state
law.

      1.7 Ballot means the form to be distributed with the Disclosure Statement
to each holder of an impaired Claim on which is to be indicated acceptance or
rejection of the Plan.

      1.8 Balloting Agent means the entity retained by the Debtors as balloting
agent under the Plan.

      1.9 Balloting Deadline means the date and time, as set by an Order and set
forth in the Disclosure Statement, by which all Ballots must be received by the
Balloting Agent at the address set forth on the applicable ballot used for
voting on the Plan, as such date may be extended by an Order.


                                       2
<PAGE>
      1.10 Bankruptcy Code means title 11 of the United States Code, as amended
from time to time, as applicable to the Chapter 11 Cases.

      1.11 Bankruptcy Court means the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, having jurisdiction over the
Chapter 11 Cases, or if such Court ceases to exercise jurisdiction over the
Chapter 11 Cases, such court or adjunct thereof that exercises jurisdiction over
the Chapter 11 Cases in lieu of the United States Bankruptcy Court for such
district.

      1.12 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075 of title 28 of
the United States Code, and any Local Rules of the Bankruptcy Court.

      1.13 BNY means BNY Asset Solutions LLC.

      1.14 Business Day means any day other than a Saturday, Sunday or any other
day on which commercial banks in New York, New York are required or authorized
to close by law or executive order.

      1.15 Canadian Court means the Quebec Superior Court (Bankruptcy Division),
in Montreal, Canada.

      1.16 Canadian Deficiency Claims means Claims equal to the difference
between (i) the aggregate amount of all Claims relating to or arising under the
PCA Canadian Term Loan Agreement and/or the PCICC Senior Notes, and (ii) the
value of the Collateral securing such Claims.

      1.17 Canadian Plan means the plan of arrangement and compromise filed
under the CCAA proposed by PCICC, as Applicant, and Richter & Associes Inc., as
Monitor, and attached hereto as "Exhibit A," as the same may be modified or
amended from time to time with the consent of PCICC and the Creditors'
Committee.

      1.18 Canadian Proceedings means the proceedings commenced by PCICC before
the Canadian Court under the CCAA.

      1.19 Canadian Secured Term and Note Claims means the Secured Claims
relating to the PCA Canadian Term Loan Agreement and the PCICC Senior Notes.

      1.20 Cash means legal tender of the United States of America and
equivalents thereof.

      1.21 Causes of Action means, without limitation, any and all actions,
causes of action, liabilities, obligations, rights, suits, debts, sums of money,
damages, judgments, claims and demands whatsoever, whether known or unknown, in
law, equity or otherwise.

      1.22 CCAA means the Companies' Creditors Arrangement Act of Canada.


                                       3
<PAGE>
      1.23 CCAA Order means one or more orders of the Canadian Court sanctioning
and giving effect to the Canadian Plan pursuant to Section 6 of the CCAA.

      1.24 Chapter 11 Cases means each and all of the cases under chapter 11 of
the Bankruptcy Code commenced by the Debtors, styled In re Pioneer Companies,
Inc. et al., Chapter 11 Case No. 01-38259-H3-11, Jointly Administered, currently
pending in the Bankruptcy Court.

      1.25 Claim has the meaning set forth in section 101(5) of the Bankruptcy
Code.

      1.26 Class means a category of holders of Claims or Equity Interests as
set forth in Article III of the Plan.

      1.27 Class 8 and Class 9 Distribution means 300,000 shares of the New
Common Stock.

      1.28 Class 9 Distribution means the aggregate Pro Rata Shares of all
holders of Allowed Canadian Deficiency Claims and/or Allowed U.S. Deficiency
Claims of the Class 8 and Class 9 Distribution.

      1.29 Clerk means the clerk of the Bankruptcy Court.

      1.30 Collateral means any property or interest in property of the Estates
of the Debtors subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code, applicable state law, or applicable
Canadian or provincial law.

      1.31 Commencement Date means July 31, 2001, the date on which the Debtors
commenced the Chapter 11 Cases.

      1.32 Confirmation Date means the date on which the Clerk of the Bankruptcy
Court enters the Confirmation Order on the Docket.

      1.33 Confirmation Hearing means the hearing held by the Bankruptcy Court
to consider confirmation of the Plan pursuant to section 1129 of the Bankruptcy
Code, as such hearing may be adjourned or continued from time to time.

      1.34 Confirmation Order means the order of the Bankruptcy Court confirming
the Plan pursuant to section 1129 of the Bankruptcy Code.

      1.35 Congress means Congress Financial Corporation (Southwest) as U.S.
Lender, Congress Financial Corporation (Canada) as Canadian Lender, and Congress
Financial Corporation (Southwest) as Agent under the Existing Credit Facility.

      1.36 Congress Secured Claim means a Secured Claim of Congress and the
other lenders party to the Existing Credit Facility.


                                       4
<PAGE>
      1.37 Convenience Claim means any Unsecured Claim in the amount of $500.00
or less and any Unsecured Claim that is reduced to $500.00 by the election of
the holder thereof on such holder's Ballot.

      1.38 Creditors' Committee means the statutory committee of unsecured
creditors appointed in the Chapter 11 Cases pursuant to section 1102 of the
Bankruptcy Code.

      1.39 Debtors means, collectively, PCI, PAI, PCICC, Imperial, PCA, Pioneer
East, Pioneer Licensing, KNA, KWT, and PWT.

      1.40 Debtors in Possession means the Debtors in their capacity as debtors
in possession in the Chapter 11 Cases pursuant to sections 1101, 1107(a) and
1108 of the Bankruptcy Code.

      1.41 DIP Facility means that certain commitment for a revolving credit
facility in the aggregate principal amount of up to $50 million provided by the
agent and the lenders party thereto, and evidenced by that certain
Debtor-in-Possession Credit Agreement dated as of July 31, 2001, as amended,
supplemented, or modified from time to time and that certain Final Order
granting Debtor-in-Possession Financing dated as of August 15, 2001.

      1.42 Disbursing Agents shall have the meaning set forth in Section 5.3(m)
of the Plan.

      1.43 Disclosure Statement means the disclosure statement relating to the
Plan, including, without limitation, all exhibits and schedules thereto, as
approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code.

      1.44 Disputed means, with reference to any Claim or Equity Interest, any
Claim or Equity Interest proof of which was timely and properly filed and which
has been or hereafter is listed on the Schedules as unliquidated, disputed or
contingent, and in either case or in the case of an Administrative Expense
Claim, any Administrative Expense Claim, Claim or Equity Interest which is
disputed under the Plan or as to which the Debtors or, if not prohibited by the
Plan, any other party in interest has interposed a timely objection and/or
request for estimation in accordance with section 502(c) of the Bankruptcy Code
and Bankruptcy Rule 3018, which objection and/or request for estimation has not
been withdrawn or determined by a Final Order, and any Claim or Equity Interest
proof of which was required to be filed by order of the Bankruptcy Court but as
to which a proof of claim or interest was not timely or properly filed.

      1.45 Disputed Claim Amount means the amount set forth in the proof of
claim relating to a Disputed Claim or, if an amount is estimated in respect of a
Disputed Claim in accordance with section 502(c) of the Bankruptcy Code and
Bankruptcy Rule 3018 for purposes of, among other things, Section 5.3(i)(i) of
the Plan, the amount so estimated pursuant to an order of the Bankruptcy Court.

      1.46 Docket means the docket in the Chapter 11 Cases maintained by the
Clerk.


                                       5
<PAGE>
      1.47 Effective Date means the first Business Day on which the conditions
specified in Section 10.1 of the Plan have been satisfied or waived.

      1.48 Environmental Claim means any Claim, including, but not limited to,
actions, suits, judgments, or orders under any federal, state, or local
environmental law or regulation for any damages (including contribution claims
and natural resource damages), injunctive relief, losses, fines, penalties,
fees, expenses (including financial assurance obligations and reasonable fees
and expenses of attorneys and consultants) or costs relating to (a) the release
or threatened release of hazardous materials or substances to the environment,
(b) any actual or alleged violation or non-compliance with any applicable
federal, state, or local environmental statute, regulation, or order, or (c)
other similar Claim asserted against any of the Debtors that has not been
compromised and settled or otherwise resolved.

      1.49 Equity Interest means any share of preferred stock, common stock or
other instrument evidencing an ownership interest in any of the Debtors, whether
or not transferable, and any option, warrant or right, contractual or otherwise,
to acquire any such interest, other than any such instrument or right held by
PCI or any Subsidiary.

      1.50 ERISA means Title IV of the Employee Retirement Income Security Act,
as amended, 29 U.S.C.ss. 1301 et. seq. (1994 & Supp. V 1999).

      1.51 Estates means the estates created upon the commencement of the
Chapter 11 Cases by section 541 of the Bankruptcy Code.

      1.52 Existing Credit Facility means the $50 million secured revolving
credit and term loan facility provided pursuant to the Amended and Restated Loan
and Security Agreement by and among Congress, the other lenders thereto, and
Pioneer Chlor Alkali Company, Inc., All-Pure Chemical Co., KNA, PCICC, PCI
Carolina, Inc., and T.C. Products, Inc., as Borrowers, and PAI, Imperial, Black
Mountain Power Company, T.C. Holdings, Inc., Pioneer Licensing and Pioneer East,
as Guarantors, dated as of September 24, 1999.

      1.53 Exit Facility means the credit facility to be entered into, as of the
Effective Date, among the Reorganized Debtors and the Exit Facility Lenders, and
all ancillary agreements and instruments thereto, in the form Filed at least ten
(10) days prior to the Voting Deadline.

      1.54 Exit Facility Lenders means those certain lenders (together with
their successors or assigns), as parties to the Exit Facility, by original
execution or assignment thereof.

      1.55 File, Filed, or Filing means file, filed, or filing with the
Bankruptcy Court in the Chapter 11 Cases.

      1.56 Final Order means an Order of the Bankruptcy Court as to which the
time to appeal, petition for certiorari, or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari, or other proceedings
for reargument or


                                       6
<PAGE>
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or the Reorganized Debtors or, in the
event that an appeal, writ of certiorari, or reargument or rehearing thereof has
been sought, such order of the Bankruptcy Court shall have been determined by
the highest court to which such order was appealed, or certiorari, reargument or
rehearing shall have been denied and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired;
provided, however, that the possibility that a motion under Rule 59 or Rule 60
of the Federal Rules of Civil Procedure, or any analogous rule under the
Bankruptcy Rules, may be filed with respect to such order shall not cause such
order not to be a Final Order.

      1.57 General Unsecured Claim means any Unsecured Claim other than a
Convenience Claim, a Subordinated Claim, a Canadian Deficiency Claim, a U.S.
Deficiency Claim, or an Intercompany Claim. General Unsecured Claim shall also
include any Pioneer 2000 Group Claim.

      1.58 Guarantees has the meaning assigned to such term in Section 9.1(m) of
the Plan.

      1.59 Imperial means Imperial West Chemical Co., a Nevada corporation.

      1.60 Indenture Trustees means, collectively, (i) U.S. Trust, in its
capacity as PCA Senior Notes Indenture Trustee and as PCICC Senior Notes
Indenture Trustee, and (ii) BNY, in its capacity as PCA U.S. Term Loan Agreement
Administrative Agent and as PCA Canadian Term Loan Agreement Administrative
Agent.

      1.61 Indenture Trustees' Expenses means any unpaid Indenture Trustees'
fees, and reasonable unpaid out-of-pocket costs or expenses incurred through the
Effective Date by the Indenture Trustees, which are secured or which are
entitled to be secured under, as the case may be, the PCA Senior Notes
Indenture, the PCICC Senior Notes Indenture, the PCA Canadian Term Loan
Agreement, or the PCA U.S. Term Loan Agreement by a Lien or other priority in
payment against distributions to be made to holders of Claims under the PCA
Senior Notes Indenture, the PCICC Senior Notes Indenture, the PCA Canadian Term
Loan Agreement, or the PCA U.S. Term Loan Agreement.

      1.62 Initial Distribution Date means the date that is sixty (60) days
after the Effective Date, or as soon thereafter as is practicable.

      1.63 Insured Claim means any Claim arising from an incident or occurrence
that is covered under the Debtors' insurance policies.

      1.64 Intercompany Claim means any Claim of one Debtor against another
Debtor on account of intercompany indebtedness.

      1.65 KNA means Kemwater North America Company, a Delaware corporation.

      1.66 KWT means KWT, Inc., a Delaware corporation.


                                       7
<PAGE>
      1.67 LIBOR Rate means the rate per annum offered to major banks in the
London interbank eurodollar market as it appears on the Dow Jones Markets
Telerate Page 3750, or, if such rate does not appear on this service, such other
comparable publicly available service for displaying eurodollar rates, as of
11:00 a.m., London time, on the Effective Date, for deposits in U.S. dollars for
a one-year interest period.

      1.68 Lien has the meaning set forth in section 101(37) of the Bankruptcy
Code.

      1.69 MEIP means an equity incentive plan that will become effective on the
Effective Date or as soon thereafter as is reasonably practicable, which shall
be in substantially the form contained in the Plan Supplement.

      1.70 New Board of Directors means the board of directors of Reorganized
PCI.

      1.71 New Common Stock means the common stock of Reorganized PCI authorized
and to be issued pursuant to the Plan.

      1.72 New Indenture Trustees means, collectively, (i) the New Tranche A
Indenture Trustee, (ii) the New Tranche B Notes Indenture Trustee and (iii) the
New Tranche A Term Notes Agent

      1.73 New Notes means, collectively, the New Tranche A Term Notes, the New
Tranche B Notes, and the New Other Secured Notes.

      1.74 New Other Secured Notes means, with respect to the holder of an Other
Secured Claim, the term note authorized and to be issued pursuant to section 4.6
of the Plan, in a principal amount equal to the amount of such holder's Allowed
Other Secured Claim and containing all other material economic terms the same as
the original instrument evidencing such holder's Other Secured Claim.

      1.75 New Tranche A Term Notes means, as applicable, the New Tranche A
Indenture Notes or, with respect to holders making such election pursuant to
Section 9.1(j) of the Plan, the New Tranche A Loan Notes.

      1.76 New Tranche A Term Loan Agreement means, collectively, the New
Tranche A Indenture and the New Tranche A Credit Facility.

      1.77 New Tranche A Term Notes Agent means the administrative agent under
the New Tranche A Credit Facility.

      1.78 New Tranche B Notes has the meaning assigned to such term in Section
9.1(k) of the Plan. The New Tranche B Notes shall be in substantially the form
contained in the Plan Supplement.

      1.79 New Tranche B Notes Indenture means the indenture pursuant to which
the New Tranche B Notes are issued, and which shall be in substantially the form
contained in the Plan Supplement.


                                       8
<PAGE>
      1.80 New Tranche B Notes Indenture Trustee means the indenture trustee
under the New Tranche B Notes Indenture.

      1.81 Order means an order or judgment of the Bankruptcy Court as entered
on the Docket.

      1.82 Other Priority Claim means any Claim, other than an Administrative
Expense Claim or a Priority Tax Claim, entitled to priority in right of payment
under section 507(a) of the Bankruptcy Code.

      1.83 Other Secured Claim means any Secured Claim, other than a Congress
Secured Claim, a PCA U.S. Secured Term and Note Claim, a Canadian Secured Term
and Note Claim, or a Secured Tax Claim.

      1.84 PAI means Pioneer Americas, Inc., a Delaware corporation.

      1.85 PBGC means Pension Benefit Guaranty Corporation.

      1.86 PCA means Pioneer Corporation of America, a Delaware corporation.

      1.87 PCA Canadian Term Loan Agreement means that certain Term Loan
Agreement, dated as of October 30, 1997, as amended, among PCA, the Lenders (as
defined therein), certain other parties, and BNY, in its capacity as
administrative agent.

      1.88 PCA Canadian Term Loan Agreement Administrative Agent means BNY in
its capacity as administrative agent under the PCA Canadian Term Loan Agreement.

      1.89 PCA U.S. Secured Term and Note Claims means the Secured Claims
relating to the PCA U.S. Term Loan Agreement and PCA Senior Notes.

      1.90 PCA Senior Notes means the $200 million in original aggregate
principal amount of 9 1/4% Senior Secured Notes due June 2007 by PCA pursuant to
the PCA Senior Notes Indenture.

      1.91 PCA Senior Notes Indenture means that certain Indenture, dated as of
June 17, 1997, as amended, among PCA, the Subsidiary Guarantors (as defined
therein), and U.S. Trust, in its capacity as trustee and as collateral agent.

      1.92 PCA Senior Notes Indenture Trustee means U.S. Trust in its capacity
as trustee and as collateral agent under the PCA Senior Notes Indenture.

      1.93 PCA U.S. Term Loan Agreement means that certain Term Loan Agreement,
dated as of June 17, 1997, as amended, among PCA, the Lenders (as defined
therein), certain other parties, and BNY, in its capacity as administrative
agent.

      1.94 PCA U.S. Term Loan Agreement Administrative Agent means BNY in its
capacity as administrative agent under the PCA U.S. Term Loan Agreement.


                                       9
<PAGE>
      1.95 PCI means Pioneer Companies, Inc., a Delaware corporation.

      1.96 PCI Equity Interest means any share of common or preferred stock or
other instrument evidencing a present ownership interest in PCI, whether or not
transferable, and any option, warrant or right, contractual or otherwise, to
acquire any such interest.

      1.97 PCICC means PCI Chemicals Canada Inc./ PCI Chimie Canada Inc., a New
Brunswick, Canada corporation.

      1.98 PCICC Senior Notes means the $175 million in original aggregate
principal amount of 9 1/4% Senior Secured Notes due OctobeR 2007 issued by PCICC
pursuant to the PCCIC Senior Notes Indenture.

      1.99 PCICC Senior Notes Indenture means that certain Indenture, dated as
of October 30, 1997, as amended, among PCICC, the Guarantors (as such term is
defined therein), and U.S. Trust, in its capacity as trustee and as collateral
agent.

      1.100 PCICC Senior Notes Indenture Trustee means U.S. Trust in its
capacity as trustee and as collateral agent under the PCICC Senior Notes
Indenture.

      1.101 Pioneer means, collectively, the Debtors.

      1.102 Pioneer 2000 Group means Pioneer Partners 2000, L.L.C. and the
members and managers of Pioneer Partners 2000, L.L.C.

      1.103 Pioneer 2000 Group Claims means the Claims of the Pioneer 2000
Group.

      1.104 Pioneer East means Pioneer (East), Inc., a Delaware corporation.

      1.105 Pioneer Licensing means Pioneer Licensing, Inc., a Delaware
corporation.

      1.106 Plan means this chapter 11 plan of reorganization, including,
without limitation, the Plan Supplement and all exhibits, supplements,
appendices and schedules hereto, either in its present form or as the same may
be altered, amended or modified from time to time.

      1.107 Plan Documents means the agreements, documents and instruments
entered into on or as of the Effective Date as contemplated by, and in
furtherance of, the Plan.

      1.108 Plan Supplement means the forms of documents specified in Section
12.13 of the Plan.

      1.109 Priority Tax Claim means any Claim of a governmental unit of the
kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.


                                       10
<PAGE>
      1.110 Pro Rata Share means a proportionate share, so that the ratio of the
consideration distributed on account of an Allowed Claim in a Class to the
amount of such Allowed Claim is the same as the ratio of the amount of the
consideration distributed on account of all Allowed Claims in such Class;
provided, however, that with respect to Class 8 and Class 9, such ratios shall
be computed by using the aggregate amount of Allowed Claims in Class 8 and Class
9.

      1.111 Professionals means (a) any professional employed in the Chapter 11
Cases pursuant to section 327 or 1103 of the Bankruptcy Code or otherwise
pursuant to an order of the Bankruptcy Court and (b) any professional or other
entity seeking compensation or reimbursement of expenses in connection with the
Chapter 11 Cases pursuant to section 503(b)(4) of the Bankruptcy Code.

      1.112 Protocol means the cross-border insolvency protocol approved by the
Bankruptcy Court.

      1.113 PWT means Pioneer Water Technologies, Inc., a Delaware corporation.

      1.114 Quarter means the period beginning on the Effective Date and ending
on the next of October 31, January 31, April 30 and July 31, and each three
month period thereafter.

      1.115 Record Date means the day that is five (5) days from and after the
Confirmation Date.

      1.116 Registration Rights Agreement means the registration rights
agreement relating to the resale of the New Tranche B Notes, the New Tranche A
Indenture Notes and the New Common Stock distributed pursuant to the Plan, to be
entered into as of the Effective Date by the Reorganized Debtors for the benefit
of certain holders of such notes and common stock. The Registration Rights
Agreement shall be in substantially the form contained in the Plan Supplement.

      1.117 Reorganized Debtors means Reorganized PCI and each of the
Reorganized Subsidiaries, as reorganized on and after the Effective Date.

      1.118 Reorganized PAI means PAI, or any successor thereto by merger,
consolidation or otherwise, on and after the Effective Date.

      1.119 Reorganized PCI means PCI, or any successor thereto by merger,
consolidation or otherwise, on and after the Effective Date.

      1.120 Reorganized PCICC means PCICC, or any successor thereto by merger,
consolidation or otherwise, on and after the Effective Date.

      1.121 Reorganized Pioneer means Pioneer, or any successor thereto by
merger, consolidation or otherwise, on and after the Effective Date.


                                       11
<PAGE>
      1.122 Reorganized Subsidiaries means each of the Subsidiaries, or any
successors thereto by merger, consolidation or otherwise, on and after the
Effective Date.

      1.123 Reserve shall have the meaning set forth in Section 5.3(i)(i) of the
Plan.

      1.124 Retirement Plans means the Pioneer Americas, Inc. Retirement Plan,
the Pioneer Americas, Inc. Retirement Plan for Bargaining Employees, and the
Pioneer Americas, Inc. Tacoma Union Pension Plan.

      1.125 Schedules means the schedules of assets and liabilities, the list of
holders of Equity Interests and the statements of financial affairs filed by the
Debtors under section 521 of the Bankruptcy Code and Bankruptcy Rule 1007, and
all amendments and modifications thereto through the Confirmation Date.

      1.126 Secured Claim means any Claim, to the extent reflected in the
Schedules or a proof of claim as a Secured Claim, which is secured by a Lien on
Collateral to the extent of the value of such Collateral, as determined in
accordance with section 506(a) of the Bankruptcy Code, or, in the event that
such Claim is subject to setoff under section 553 of the Bankruptcy Code, to the
extent of such setoff.

      1.127 Secured Tax Claim means any Secured Claim which, absent its secured
status, would be entitled to priority in right of payment under section
507(a)(8) of the Bankruptcy Code.

      1.128 Subordinated Claim means any Claim that is subordinated pursuant to
section 510 of the Bankruptcy Code.

      1.129 Subsequent Distribution Date means the twentieth (20th) day after
the end of the Quarter following the Quarter in which the Initial Distribution
Date occurs and the twentieth (20th) day after the end of each subsequent
Quarter; provided, however, that the first and second Subsequent Distribution
Dates shall occur on the twentieth (20th) day after the end of the second and
fourth Quarters, respectively, following the Quarter in which the Initial
Distribution Date occurs.

      1.130 Subsidiary means any Debtor of which PCI owns directly or indirectly
all of the outstanding capital stock.

      1.131 Subsidiary Equity Interest means any share of common stock or other
instrument evidencing a present ownership interest in any of the Subsidiaries,
whether or not transferable, and any option, warrant or right, contractual or
otherwise, to acquire any such interest.

      1.132 Surplus Distributions shall have the meaning set forth in Section
5.3(k) of the Plan.

      1.133 Tort Claim means any Claim relating to personal injury, property
damage or products liability or other similar Claim asserted against any of the
Debtors that has not been compromised and settled or otherwise resolved.


                                       12
<PAGE>
      1.134 Unsecured Claim means any Claim that is not a Secured Claim,
Administrative Expense Claim, Priority Tax Claim or Other Priority Claim.

      1.135 U.S. Deficiency Claims means Claims equal to the difference between
(i) the aggregate amount of all Claims relating to or arising under the PCA U.S.
Term Loan Agreement and/or the PCA Senior Notes, and (ii) the value of the
Collateral securing such Claims.

      1.136 U.S. Trust means the United States Trust Company of New York or its
successor.

      1.137 Voting Deadline means the last day upon which holders of Claims may
vote to accept or reject the Plan.

      1.138 New Tranche A Credit Facility means the term loan agreement pursuant
to which the New Tranche A Loan Notes are issued.

      1.139 New Tranche A Indenture means the indenture pursuant to which the
New Tranche A Indenture Notes are issued.

      1.140 New Tranche A Indenture Trustee means the indenture trustee under
the New Tranche A Indenture.

      1.141 New Tranche A Indenture Notes means the notes in an aggregate
principal amount of up to $50 million issued by PCA or its successor in interest
pursuant to the New Tranche A Indenture which bear interest at the LIBOR Rate
plus 350 basis points and are due and payable on the date five years after the
Effective Date if not sooner in accordance with their terms; provided, however,
that in no event shall the sum of the aggregate principal amount of the New
Tranche A Indenture Notes and the aggregate principal amount of the New Tranche
A Loan Notes be greater than $50 million.

      1.142 New Tranche A Loan Notes means promissory notes in an aggregate
principal amount of up to $50 million made by PCA or its successor in interest
pursuant to the New Tranche A Credit Facility which bear interest at the LIBOR
Rate plus 350 basis points and are due and payable on the date five years after
the Effective Date if not sooner in accordance with their terms; provided,
however, that in no event shall the sum of the aggregate principal amount of the
New Tranche A Indenture Notes and the aggregate principal amount of the New
Tranche A Loan Notes be greater than $50 million.

      1.143 City of Tacoma means the City of Tacoma Department of Public
Utilities (doing business as Tacoma Public Utilities), which includes Tacoma
Rail/Mountain Division.

      1.144 City of Tacoma Secured Claims means the Secured Claims held by the
City of Tacoma.


                                       13
<PAGE>
      1.145 Interpretation; Application of Definitions and Rules of
Construction. Wherever from the context it appears appropriate, each term stated
in either the singular or the plural shall include both the singular and the
plural and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter. Unless otherwise specified, all
section, article, schedule or exhibit references in the Plan are to the
respective Section in, Article of, Schedule to, or Exhibit to the Plan. The
words "herein," "hereof," "hereto," "hereunder" and other words of similar
import refer to the Plan as a whole and not to any particular section,
subsection or clause contained in the Plan. The rules of construction contained
in section 102 of the Bankruptcy Code shall apply to the construction of the
Plan. A term used herein that is not defined herein, but that is used in the
Bankruptcy Code, shall have the meaning ascribed to that term in the Bankruptcy
Code. The headings in the Plan are for convenience of reference only and shall
not limit or otherwise affect the provisions of the Plan.

                                  ARTICLE II.

                           TREATMENT OF ADMINISTRATIVE
                     EXPENSE CLAIMS AND PRIORITY TAX CLAIMS

      2.1 Administrative Expense Claims. Except to the extent that any entity
entitled to payment of any Allowed Administrative Expense Claim agrees to a
different treatment, each holder of an Allowed Administrative Expense Claim
shall receive Cash in an amount equal to such Allowed Administrative Expense
Claim on the later of the Effective Date and the date such Administrative
Expense Claim becomes an Allowed Administrative Expense Claim, or as soon
thereafter as is practicable; provided, however, that Allowed Administrative
Expense Claims representing liabilities incurred in the ordinary course of
business by the Debtors in Possession or liabilities arising under loans or
advances to or other obligations incurred by the Debtors in Possession, to the
extent authorized and approved by the Bankruptcy Court if such authorization and
approval was required under the Bankruptcy Code, shall be paid in full and
performed by the Reorganized Debtors in the ordinary course of business in
accordance with the terms and subject to the conditions of any agreements
governing, instruments evidencing or other documents relating to, such
transactions.

      2.2 Professional Compensation and Reimbursement Claims. All entities
seeking an award by the Bankruptcy Court of compensation for services rendered
or reimbursement of expenses incurred through and including the Confirmation
Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the
Bankruptcy Code (a) shall file their respective final applications for
allowances of compensation for services rendered and reimbursement of expenses
incurred through the Confirmation Date by the date that is sixty (60) days after
the Effective Date or such other date as may be fixed by the Bankruptcy Court
and, (b) if granted such an award by the Bankruptcy Court, shall be paid in full
in such amounts as are Allowed by the Bankruptcy Court (i) on the date such
Administrative Expense Claim becomes an Allowed Administrative Expense Claim, or
as soon thereafter as is practicable or (ii) upon such other terms as may be
mutually agreed upon between such holder of an Administrative Expense Claim and
the Debtors in Possession or, on and after the Effective Date, the Reorganized
Debtors.


                                       14
<PAGE>
      2.3 Priority Tax Claims. Except to the extent that a holder of an Allowed
Priority Tax Claim has been paid by the Debtors prior to the Effective Date or
agrees to a different treatment, each holder of an Allowed Priority Tax Claim
shall receive, at the sole option of Reorganized Pioneer, (a) Cash in an amount
equal to such Allowed Priority Tax Claim on the later of the Effective Date and
the date such Priority Tax Claim becomes an Allowed Priority Tax Claim, or as
soon thereafter as is practicable, or (b) equal annual Cash payments in an
aggregate amount equal to such Allowed Priority Tax Claim, together with
interest at a fixed annual rate equal to 8.0%, over a period through the sixth
(6th) anniversary of the date of assessment of such Allowed Priority Tax Claim,
or upon such other terms determined by the Bankruptcy Court to provide the
holder of such Allowed Priority Tax Claim deferred Cash payments having a value,
as of the Effective Date, equal to such Allowed Priority Tax Claim.

                                  ARTICLE III.

                  CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS

      Claims, other than Administrative Expense Claims, Priority Tax Claims, and
Equity Interests are classified for all purposes, including voting, confirmation
and distribution pursuant to the Plan, as follows:

<TABLE>
<CAPTION>
Class                                                                       Status
-----                                                                       ------
<S>                                                                         <C>
Class 1 - Other Priority Claims........................................     Unimpaired

Class 2 - Congress Secured Claims......................................     Unimpaired

Class 3 - PCA U.S. Secured Term and Note Claims........................     Impaired

Class 4 - Canadian Secured Term and Note Claims........................     Impaired

Class 5 - Secured Tax Claims...........................................     Impaired

Class 6 - Other Secured Claims.........................................     Unimpaired

Class 7 - Convenience Claims...........................................     Impaired

Class 8 - General Unsecured Claims.....................................     Impaired

Class 9 - Canadian Deficiency Claims and U.S.
          Deficiency Claims............................................     Impaired

Class 10 - Subordinated Claims.........................................     Impaired

Class 11 - PCI Equity Interests........................................     Impaired
</TABLE>


                                       15
<PAGE>
                                   ARTICLE IV

                    TREATMENT OF CLAIMS AND EQUITY INTERESTS

      4.1 CLASS 1 - OTHER PRIORITY CLAIMS.

      (a) Impairment and Voting. Class 1 is unimpaired by the Plan. Each holder
of an Allowed Other Priority Claim is conclusively presumed to have accepted the
Plan and is not entitled to vote to accept or reject the Plan.

      (b) Distributions. Each holder of an Allowed Other Priority Claim shall
receive Cash in an amount equal to such Allowed Other Priority Claim on the
later of the Effective Date and the date such Allowed Other Priority Claim
becomes an Allowed Other Priority Claim, or as soon thereafter as is
practicable.

      4.2 CLASS 2 - CONGRESS SECURED CLAIMS.

      (a) Impairment and Voting. Class 2 is unimpaired by the Plan. Each holder
of an Allowed Congress Secured Claim is conclusively presumed to have accepted
the Plan and is not entitled to vote to accept or reject the Plan.

      (b) Distributions. Each holder of an Allowed Congress Secured Claim shall
be treated in accordance with the terms of the DIP Facility and/or the Exit
Facility.

      4.3 CLASS 3 - PCA U.S. SECURED TERM AND NOTE CLAIMS.

      (a) Impairment and Voting. Class 3 PCA U.S. Secured Term and Note Claims
are deemed Allowed in an amount equal to the principal amount of such respective
Claims, together with all accrued and unpaid non-default interest arising under
the terms of the PCA U.S. Term Loan Agreement and the PCA Senior Notes,
respectively, through and including the Effective Date. Class 3 is impaired by
the Plan. Each holder of an Allowed PCA U.S. Secured Term and Note Claim shall
be entitled to vote to accept or reject the Plan.

      (b) Distributions. On the Effective Date, each holder of an Allowed PCA
U.S. Secured Term and Note Claim as of the Record Date shall receive, pursuant
to the implementation of the transactions set forth in Section 7.1 of the Plan
(including, without limitation, the exchanges provided in Section 7.1(i) of the
Plan) and on account of such holder's Allowed PCA U.S. Secured Term and Note
Claim, such holder's Pro Rata Share of forty-three percent (43%) of (i) the New
Tranche A Term Notes (including the Guarantees thereof), (ii) the New Tranche B
Notes (including the Guarantees thereof), and (iii) 9,700,000 shares of the New
Common Stock.

      (c) Instructions. Acceptance of the Plan by Class 3 shall constitute an
instruction by the holders of Class 3 PCA U.S. Secured Term and Note Claims to
the respective Indenture Trustees and New Indenture Trustees, as the case may
be, to take all actions necessary to effectuate the Plan.



                                       16
<PAGE>
      4.4 CLASS 4 - CANADIAN SECURED TERM AND NOTE CLAIMS.

      (a) Impairment and Voting. Class 4 Canadian Secured Term and Note Claims
are deemed Allowed in an amount equal to principal amount of such respective
Claims, together with all accrued and unpaid non-default interest arising under
the terms of the PCA Canadian Term Loan Agreement and the PCICC Senior Notes,
respectively, through and including the Effective Date. Class 4 is impaired by
the Plan. Each holder of an Allowed Canadian Secured Term and Note Claim shall
be entitled to vote to accept or reject the Plan.

      (b) Distributions. On the Effective Date, each holder of an Allowed
Canadian Secured Term and Note Claim as of the Record Date shall receive,
pursuant to the implementation of the transactions set forth in Section 7.1 of
the Plan (including, without limitation, the exchanges provided in Sections
7.1(i) and (j) of the Plan) and on account of such holder's Allowed Canadian
Secured Term and Note Claim, such holder's Pro Rata Share of fifty-seven (57%)
of (i) the New Tranche A Term Notes (including the Guarantees thereof), (ii) the
New Tranche B Notes (including the Guarantees thereof), and (iii) 9,700,000
shares of the New Common Stock.

      (c) Instructions. Acceptance of the Plan by Class 4 shall constitute an
instruction by the holders of Class 4 Canadian Secured Term and Note Claims to
the respective Indenture Trustees and New Indenture Trustees, as the case may
be, to take all actions necessary to effectuate the Plan.

      4.5 CLASS 5 - SECURED TAX CLAIMS.

      (a) Impairment and Voting. Class 5 is impaired by the Plan. Each holder of
an Allowed Secured Tax Claim is entitled to vote to accept or reject the Plan.

      (b) Distributions. Except to the extent that a holder of an Allowed
Secured Tax Claim has been paid by the Debtors prior to the Effective Date or
agrees to a different treatment, each holder of an Allowed Secured Tax Claim
shall receive, at the sole option of Reorganized Pioneer, (i) Cash in an amount
equal to such Allowed Secured Tax Claim, including any interest on such Allowed
Secured Tax Claim required to be paid pursuant to section 506(b) of the
Bankruptcy Code, on the later of the Effective Date and the date such Allowed
Secured Tax Claim becomes an Allowed Secured Tax Claim, or as soon thereafter as
is practicable, or (ii) equal annual Cash payments in an aggregate amount equal
to such Allowed Secured Tax Claim, together with interest at a fixed annual rate
equal to 8.0%, over a period through the sixth (6th) anniversary of the date of
assessment of such Allowed Secured Tax Claim, or upon such other terms
determined by the Bankruptcy Court to provide the holder of such Allowed Secured
Tax Claim deferred Cash payments having a value, as of the Effective Date, equal
to such Allowed Secured Tax Claim.

      (c) Retention of Liens. Each holder of an Allowed Secured Tax Claim shall
retain the Liens (or replacement Liens as may be contemplated under
nonbankruptcy law) securing its Allowed Secured Tax Claim as of the Effective
Date until full payment of


                                       17
<PAGE>
such Allowed Secured Tax Claim is made as provided herein, and upon such full
payment, such Liens shall be deemed null and void and shall be unenforceable for
all purposes.

      4.6 CLASS 6 - OTHER SECURED CLAIMS.

      (a) Impairment and Voting. Class 6 is unimpaired by the Plan, subject to a
determination by the Creditors' Committee that the value of the Collateral
subject to an Other Secured Claim is equal to or greater than the amount of such
Claim. Each holder of an Allowed Other Secured Claim is conclusively presumed to
have accepted the Plan and is not entitled to vote to accept or reject the Plan.

      (b) Distributions/Reinstatement of Claims. Except to the extent that a
holder of an Allowed Other Secured Claim agrees to a different treatment, at the
sole option of Reorganized Pioneer, (i) each Allowed Other Secured Claim shall
be reinstated and rendered unimpaired in accordance with section 1124(2) of the
Bankruptcy Code, notwithstanding any contractual provision or applicable
nonbankruptcy law that entitles the holder of an Allowed Other Secured Claim to
demand or receive payment of such Allowed Other Secured Claim prior to the
stated maturity of such Allowed Other Secured Claim from and after the
occurrence of a default, or (ii) each holder of an Allowed Other Secured Claim
shall receive a New Other Secured Note, on the later of the Effective Date and
the date such Allowed Other Secured Claim becomes an Allowed Other Secured
Claim, or as soon thereafter as is practicable.

      (c) Deficiency Claims. To the extent that the Creditors' Committee
determines that the value of the Collateral is less than the amount of an Other
Secured Claim, the undersecured portion of such Claim shall be treated as a
Class 8 General Unsecured Claim.

      4.6.1 CLASS 6.1 - CITY OF TACOMA SECURED CLAIMS

      (a) Impairment and Voting. Class 6.1 City of Tacoma Secured Claims are
deemed Allowed, subject to the provisions of Section 4.6.1(b) of the Plan. Class
6.1 is unimpaired under the Plan. The holders of Class 6.1 City of Tacoma
Secured Claims are conclusively presumed to have accepted the Plan, and are not
entitled to vote to accept or reject the Plan.

      (b) Determination of City of Tacoma Secured Claims. Within 30 days after
the Effective Date, the Debtors may seek, in accordance with the Bankruptcy Code
and the Bankruptcy Rules, (i) a determination regarding the allowability of the
City of Tacoma Secured Claims and/or (ii) a determination regarding the extent,
validity, and priority of any Liens securing the City of Tacoma Secured Claims.

      (c) Distributions. On the later of the Effective Date or the date a City
of Tacoma Secured Claim becomes an Allowed Secured Claim, each holder of an
Allowed City of Tacoma Secured Claim shall be paid $469,000 per month until such
time as the City of Tacoma's Allowed Secured Claim is paid in full (including
any interest and/or


                                       18
<PAGE>
reasonable attorneys' fees to which the Bankruptcy Court determines the City of
Tacoma is entitled).

      (d) Retention of Liens. Each holder of an Allowed City of Tacoma Secured
Claim shall retain the Liens (or any replacement Liens that may be contemplated
under nonbankruptcy law) securing its Allowed City of Tacoma Secured Claim as of
the Effective Date until such Allowed City of Tacoma Secured Claim is fully
satisfied pursuant to the Plan. On full satisfaction of an Allowed City of
Tacoma Secured Claim, such Liens shall be deemed null and void and shall be
unenforceable for all purposes.

      (e) Deficiency Claims. To the extent the Bankruptcy Court determines that
the value of the Collateral securing a City of Tacoma Secured Claim is less than
the amount of such Secured Claim, the undersecured portion of the City of Tacoma
Secured Claim shall be treated as a Class 8 General Unsecured Claim.

      4.7 CLASS 7 - CONVENIENCE CLAIMS.

      (a) Impairment and Voting. Class 7 is impaired by the Plan. Each holder of
an Allowed Convenience Claim is entitled to vote to accept or reject the Plan.

      (b) Distributions. Each holder of an Allowed Convenience Claim as of the
Record Date shall receive Cash in an amount equal to 100% of such Allowed
Convenience Claim on the later of the Effective Date and the date such Allowed
Convenience Claim becomes an Allowed Convenience Claim, or as soon thereafter as
is practicable.

      4.8 CLASS 8 - GENERAL UNSECURED CLAIMS.

      (a) Impairment and Voting. Class 8 is impaired by the Plan. Each holder of
an Allowed General Unsecured Claim is entitled to vote to accept or reject the
Plan.

      (b) Distributions. Each holder of an Allowed General Unsecured Claim shall
receive on account of such holder's Allowed General Unsecured Claim such
holder's Pro Rata Share of the Class 8 and Class 9 Distribution.

      4.9 CLASS 9 - CANADIAN DEFICIENCY CLAIMS AND U.S. DEFICIENCY CLAIMS.

      (a) Impairment and Voting. Class 9 Canadian Deficiency Claims and U.S.
Deficiency Claims are deemed Allowed in the amount of $92,341,928.00 and
$177,947,118.00, respectively, for purposes of the Plan and assuming
confirmation hereof. Each holder of an Allowed Canadian Deficiency Claim or an
Allowed U.S. Deficiency Claim is entitled to vote to accept or reject the Plan.

      (b) Distributions. Each holder of an Allowed Canadian Deficiency Claim
and/or an Allowed U.S. Deficiency Claim as of the Record Date shall be entitled
to receive such holder's Pro Rata Share of the Class 8 and Class 9 Distribution;
provided, however, that the acceptance by Class 9 of the Plan shall constitute a
waiver of the right


                                       19
<PAGE>
of the holders of Allowed Canadian Deficiency Claims and/or Allowed U.S.
Deficiency Claims to receive their Pro Rata Share of the Class 9 Distribution.
The Debtors shall distribute the Class 9 Distribution on a pro rata basis to the
holders of Class 8 Allowed General Unsecured Claims, and not to the holders of
Allowed Canadian Deficiency Claims and/or Allowed U.S. Deficiency Claims.

      4.10 CLASS 10 - SUBORDINATED CLAIMS.

      (a) Impairment and Voting. Class 10 is impaired by the Plan. Each holder
of an Allowed Subordinated Claim is conclusively presumed to have rejected the
Plan and is not entitled to vote to accept or reject the Plan.

      (b) Distributions. The holders of Subordinated Claims shall receive no
distributions on account of such Subordinated Claims.

      4.11 CLASS 11 - PCI EQUITY INTERESTS.

      (a) Impairment and Voting. Class 11 is impaired by the Plan. Each holder
of a PCI Equity Interest is conclusively presumed to have rejected the Plan and
is not entitled to vote to accept or reject the Plan.

      (b) Distributions. The holders of PCI Equity Interests shall receive no
distributions on account of such PCI Equity Interests. On the Effective Date,
all PCI Equity Interests shall be cancelled, extinguished, and of no further
force and effect as of the Effective Date.

      4.12 Modification of Treatment of Claims. The Debtors reserve the right to
modify the treatment of any Allowed Claim in any manner adverse only to the
holder of such Claim at any time after the Effective Date upon the consent of
the Creditors' Committee and the creditor whose Allowed Claim is being adversely
affected.

                                   ARTICLE V

                  PROVISIONS REGARDING VOTING AND DISTRIBUTIONS
                    UNDER THE PLAN AND TREATMENT OF DISPUTED,
                   CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE
                   EXPENSE CLAIMS, CLAIMS AND EQUITY INTERESTS

      5.1 Voting of Claims. Each holder of an Allowed Claim in an impaired Class
of Claims shall be entitled to vote separately to accept or reject the Plan as
provided in such Order as is entered by the Bankruptcy Court establishing
certain procedures with respect to the solicitation and tabulation of votes to
accept or reject the Plan, or any other Order or Orders of the Bankruptcy Court.

      5.2 Nonconsensual Confirmation. If any impaired Class of Claims entitled
to vote shall not accept the Plan by the requisite statutory majorities provided
in sections 1126(c) or 1126(d) of the Bankruptcy Code, as applicable, the
Debtors reserve the right to amend the Plan in accordance with Section 12.6 of
the Plan, or undertake to have the


                                       20
<PAGE>
Bankruptcy Court confirm the Plan under section 1129(b) of the Bankruptcy Code,
or both.

      5.3 Method of Distributions Under the Plan.

      (a) In General. Subject to Bankruptcy Rule 9010, and except as otherwise
provided in this Section 5.3, all distributions under the Plan shall be made by
or on behalf of Reorganized Pioneer to the holder of each Allowed Claim at the
address of such holder as listed on the Schedules as of the Record Date unless
the Debtors or Reorganized Debtors have been notified in writing of a change of
address, including, without limitation, by the filing of a proof of claim by
such holder that provides an address for such holder different from the address
reflected on the Schedules.

      (b) Distributions of Cash. Any payment of Cash made by Reorganized Pioneer
pursuant to the Plan shall be made by check drawn on a domestic bank, by
electronic wire, or by other form of wire transfer.

      (c) Timing of Distributions. Any payment or distribution required to be
made under the Plan on a day other than a Business Day shall be made on the next
succeeding Business Day.

      (d) Hart-Scott-Rodino Compliance. Any shares of New Common Stock to be
distributed under the Plan to any entity required to file a Premerger
Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, shall not be distributed until the notification and
waiting periods applicable under such Act to such entity shall have expired or
been terminated.

      (e) Minimum Distributions. No payment of Cash less than one hundred
dollars ($100.00) shall be made by Reorganized Pioneer to any holder of a Claim
unless a request therefor is made in writing to Reorganized Pioneer.

      (f) Fractional Shares; Multiples of New Notes. No fractional shares of New
Common Stock or Cash in lieu thereof shall be distributed under the Plan. When
any distribution on account of an Allowed Claim pursuant to the Plan would
otherwise result in the issuance of a number of shares of New Common Stock that
is not a whole number, the actual distribution of shares of New Common Stock
shall be rounded as follows: (i) fractions of 1/2 or greater shall be rounded to
the next higher whole number and (ii) fractions of less than 1/2 shall be
rounded to the next lower whole number. The total number of shares of New Common
Stock to be distributed to a Class of Claims shall be adjusted as necessary to
account for the rounding provided in this Section 5.3(f). New Tranche A Term
Notes and New Tranche B Notes shall only be issued in whole dollar amounts. Any
New Tranche A Term Notes and New Tranche B Notes that would otherwise have been
distributed in multiples of other than whole dollar amounts shall be rounded as
follows: (i) amounts that end with a decimal amount of less than $0.50 shall be
reduced to the next lower whole dollar amount and (ii) amounts that end with a
decimal amount of $0.50 or greater shall be increased to the next higher whole
dollar amount.


                                       21
<PAGE>
      (g) Unclaimed Distributions. Except with respect to distributions under
the Plan to holders of Allowed General Unsecured Claims, any distributions under
the Plan that are unclaimed for a period of one year after distribution thereof
shall be revested in Reorganized Pioneer and any entitlement of any holder of
any Claim to such distributions shall be extinguished and forever barred.
Distributions under the Plan to holders of Allowed General Unsecured Claims that
are unclaimed for a period of one year after distribution thereof shall be added
to the Reserve and any entitlement of such holders of Allowed General Unsecured
Claims to such distributions shall be extinguished and forever barred.

      (h) Distributions to Holders as of the Record Date. As of the close of
business on the Record Date, the claims register shall be closed, and there
shall be no further changes in the record holders of any Claims. Pioneer and
Reorganized Pioneer shall have no obligation to recognize any transfer of any
Claims occurring after the Record Date. Pioneer and Reorganized Pioneer shall
instead be entitled to recognize and deal for all purposes under the Plan
(except as to voting to accept or reject the Plan pursuant to Section 5.1 of the
Plan) with only those record holders stated on the claims register as of the
close of business on the Record Date.

      (i) Distributions Withheld for Disputed General Unsecured Claims.

                  (i) Establishment and Maintenance of Reserve. On the Initial
            Distribution Date and each Subsequent Distribution Date, Reorganized
            Pioneer shall reserve from the distributions to be made on such
            dates to the holders of Allowed General Unsecured Claims, an amount
            of New Common Stock equal to one-hundred percent (100%) of the
            distributions to which holders of Disputed General Unsecured Claims
            would be entitled under the Plan as of such dates if such Disputed
            General Unsecured Claims were Allowed Claims in their Disputed Claim
            Amounts (the "Reserve").

                  (ii) Property Held in Reserve. New Common Stock held in the
            Reserve shall be held in trust by the Reorganized Debtors for the
            benefit of the potential claimants of such securities and shall not
            constitute property of the Reorganized Debtors.

      (j) Distributions Upon Allowance of Disputed General Unsecured Claims. The
holder of a Disputed General Unsecured Claim that becomes an Allowed Claim
subsequent to the Initial Distribution Date shall receive distributions of New
Common Stock from the Reserve and on the next Subsequent Distribution Date that
follows the Quarter during which such Disputed General Unsecured Claim becomes
an Allowed Claim pursuant to a Final Order. Such distributions shall be made in
accordance with the Plan based upon the distributions that would have been made
to such holder under the Plan if the Disputed General Unsecured Claim had been
an Allowed Claim on or prior to the Effective Date.


                                       22
<PAGE>
      (k) Surplus Distributions to Holders of Allowed General Unsecured Claims.
The following consideration shall constitute surplus distributions (the "Surplus
Distributions") pursuant to the Plan: (i) pursuant to Section 5.3(g) of the
Plan, distributions under the Plan to holders of Allowed General Unsecured
Claims that are unclaimed for a period of one year after distribution thereof;
and (ii) to the extent that a Disputed General Unsecured Claim is not Allowed or
becomes an Allowed Claim in an amount less than the Disputed Claim Amount, the
excess of the amount of Cash and New Common Stock in the Reserve over the amount
of Cash and New Common Stock actually distributed on account of such Disputed
General Unsecured Claim. The Surplus Distributions shall be distributed to the
holders of Allowed General Unsecured Claims pursuant to Section 5.3(j) of the
Plan; provided, however, that Reorganized PCI shall not be under any obligation
to make any Surplus Distributions on a Subsequent Distribution Date unless the
number of shares of New Common Stock to be distributed aggregates 30,000 or
more, unless the distribution is the last distribution under the Plan.

      (l) Personal Injury Tort Claims and Environmental Claims. All personal
injury Tort Claims and Environmental Claims are Disputed Claims. Any personal
injury Tort Claim or Environmental Claim as to which a proof of claim was timely
filed in the Chapter 11 Cases shall be determined and liquidated in the
administrative or judicial tribunal(s) in which it is pending on the Effective
Date or, if no action was pending on the Effective Date, in any administrative
or judicial tribunal of appropriate jurisdiction, or in accordance with any
alternative dispute resolution or similar proceeding as same may be approved by
Order of the Bankruptcy Court. Any personal injury Tort Claim or Environmental
Claim determined and liquidated (i) pursuant to a judgment obtained in
accordance with this Section 5.3(l) and applicable nonbankruptcy law which is no
longer appealable or subject to review, or (ii) in any alternative dispute
resolution or similar proceeding as same may be approved by Order of the
Bankruptcy Court, shall be deemed an Allowed Claim in such liquidated amount and
satisfied in accordance with the Plan. Nothing contained in this Section 5.3(l)
shall impair the Debtors' right to seek estimation of any and all personal
injury Tort Claims and Environmental Claims in a court or courts of competent
jurisdiction or constitute or be deemed a waiver of any Cause of Action that the
Debtors may hold against any entity, including, without limitation, in
connection with or arising out of any personal injury Tort Claim or
Environmental Claim.

      (m) Disbursing Agents. The Indenture Trustees, or such Person(s) as the
Indenture Trustees may designate, will act as Disbursing Agents under the Plan
with respect to distributions to holders of Claims in Classes 3 and 4, and will
make all distributions required to be distributed under the applicable
provisions of the Plan. The PCA Senior Notes Indenture Trustee and the PCICC
Senior Notes Indenture Trustee shall make all distributions in respect of
Allowed Claims relating to the PCA Senior Notes Indenture and the PCICC Senior
Notes Indenture, respectively. The PCA Canadian Term Loan Agreement
Administrative Agent and the PCA U.S. Term Loan Agreement Administrative Agent
shall make all distributions in respect of Allowed Claims relating to the PCA
Canadian Term Loan Agreement and the PCA U.S. Term Loan Agreement, respectively.
Reorganized Pioneer, or such Person(s) as Reorganized Pioneer may designate,
will act as Disbursing Agent under the Plan with respect to all distributions to


                                       23
<PAGE>
holders of Claims other than Class 3 and 4 Claims and will make all
distributions required to be distributed under the applicable provisions of the
Plan.

      Any Disbursing Agent may employ or contract with other entities to assist
in or make the distributions required by the Plan. Each Disbursing Agent will
serve without bond, and each Disbursing Agent, other than the Reorganized
Debtors, will receive, without further Bankruptcy Court approval, reasonable
compensation for distribution services rendered pursuant to the Plan and
reimbursement of reasonable out-of-pocket expenses incurred in connection with
such services from the Reorganized Debtors on terms acceptable to the
Reorganized Debtors. The Disbursing Agents shall hold all reserves and accounts
pursuant to the Plan, including the Reserve.

      (n) Setoffs and Recoupment. Other than with respect to the PCA U.S.
Secured Term and Note Claims, the Canadian Secured Term and Note Claims, the
Canadian Deficiency Claims, and the U.S. Deficiency Claims, the Debtors may but
shall not be required to, set off against or recoup from any Claim and the
payments to be made pursuant to the Plan in respect of such Claim, any Claims of
any nature whatsoever that the Debtors may have against the claimant, but
neither the failure to do so nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtors of any such Claim or right it may
have against such claimant.

      5.4 Objections to and Resolution of Administrative Expense Claims, Claims
and Equity Interests.

      Except as to applications for allowances of compensation and reimbursement
of expenses under sections 330 and 503 of the Bankruptcy Code, the Debtors or
Reorganized Debtors shall have the exclusive right to make and File objections
to Administrative Expense Claims, Claims and Equity Interests subsequent to the
Confirmation Date. All objections shall be litigated to Final Order; provided,
however, that the Reorganized Debtors shall have the authority to compromise,
settle, otherwise resolve or withdraw any objections, without approval of the
Bankruptcy Court. Unless otherwise ordered by the Bankruptcy Court, the Debtors
or Reorganized Debtors shall File all objections to Administrative Expense
Claims that are the subject of proofs of claim or requests for payment Filed
with the Bankruptcy Court (other than applications for allowances of
compensation and reimbursement of expenses), Claims and Equity Interests and
serve such objections upon the holder of the Administrative Expense Claim, Claim
or Equity Interest as to which the objection is made as soon as is practicable,
but in no event later than sixty (60) days after the Effective Date or such
later date as may be approved by the Bankruptcy Court.

      5.5 Distributions Relating to Allowed Insured Claims. Distributions under
the Plan to each holder of an Allowed Insured Claim shall be in accordance with
the treatment provided under the Plan for the Class in which such Allowed
Insured Claim is classified, but solely to the extent that such Allowed Insured
Claim is not satisfied from proceeds payable to the holder thereof under any
pertinent insurance policies and applicable law. Nothing contained in this
Section 5.5 shall constitute or be deemed a


                                       24
<PAGE>
waiver of any Cause of Action that the Debtors or any entity may hold against
any other entity, including, without limitation, insurers under any policies of
insurance.

                                  ARTICLE VI.

                    EXECUTORY CONTRACTS AND UNEXPIRED LEASES

      6.1 Assumption or Rejection of Executory Contracts and Unexpired Leases.

      (a) Executory Contracts and Unexpired Leases. Pursuant to sections 365(a)
and 1123(b)(2) of the Bankruptcy Code, all executory contracts and unexpired
leases that exist between the Debtors and any person shall be deemed assumed by
the Reorganized Debtors as of the Effective Date, except for any executory
contract or unexpired lease (i) which has been assumed pursuant to an order of
the Bankruptcy Court entered prior to the Confirmation Date, (ii) which has been
rejected pursuant to an order of the Bankruptcy Court entered prior to the
Confirmation Date, (iii) as to which a motion for approval of the rejection of
such executory contract or unexpired lease has been Filed and served prior to
the Confirmation Date or (iv) which is set forth in Schedule 6.1(a)(x)
(executory contracts) or Schedule 6.1(a)(y) (unexpired leases), which Schedules
shall be included in the Plan Supplement; provided, however, that the Debtors or
Reorganized Debtors reserve the right, on or prior to the Confirmation Date, to
amend Schedules 6.1(a)(x) or 6.1(a)(y) to delete any executory contract or
unexpired lease therefrom or add any executory contract or unexpired lease
thereto, in which event such executory contract(s) or unexpired lease(s) shall
be deemed to be, respectively, assumed or rejected. The Debtors or Reorganized
Debtors shall provide notice of any amendments to Schedules 6.1(a)(x) or
6.1(a)(y) to the parties to the executory contracts and unexpired leases
affected thereby. The listing of a document on Schedules 6.1(a)(x) and 6.1(a)(y)
shall not constitute an admission by the Debtors or Reorganized Debtors that
such document is an executory contract or an unexpired lease or that the Debtors
or Reorganized Debtors have any liability thereunder.

      (b) Schedules of Rejected Executory Contracts and Unexpired Leases;
Inclusiveness. Each executory contract and unexpired lease listed or to be
listed on Schedules 6.1(a)(x) or 6.1(a)(y) that relates to the use or occupancy
of real property shall include (i) modifications, amendments, supplements,
restatements, or other agreements made directly or indirectly by any agreement,
instrument, or other document that in any manner affects such executory contract
or unexpired lease, without regard to whether such agreement, instrument or
other document is listed on Schedules 6.1(a)(x) or 6.1(a)(y) and (ii) executory
contracts or unexpired leases appurtenant to the premises listed on Schedules
6.1(a)(x) or 6.1(a)(y), including, without limitation, all easements, licenses,
permits, rights, privileges, immunities, options, rights of first refusal,
powers, uses, usufructs, reciprocal easement agreements, vault, tunnel or bridge
agreements or franchises, and any other interests in real estate or rights in
rem relating to such premises to the extent any of the foregoing are executory
contracts or unexpired leases, unless any of the foregoing agreements previously
have been assumed.


                                       25
<PAGE>
      (c) Insurance Policies. Each of the Debtors' insurance policies and any
agreements, documents or instruments relating thereto, including, without
limitation, any retrospective premium rating plans relating to such policies,
are treated as executory contracts under the Plan. Notwithstanding the
foregoing, distributions under the Plan to any holder of a Claim covered by any
of such insurance policies and related agreements, documents or instruments that
are assumed hereunder, shall be in accordance with the treatment provided under
Article IV and Section 5.5 of the Plan. Nothing contained in this Section 6.1(c)
shall constitute or be deemed a waiver of any Cause of Action that the Debtors
may hold against any entity, including, without limitation, the insurer under
any of the Debtors' policies of insurance.

      (d) Approval of Assumption or Rejection of Executory Contracts and
Unexpired Leases. Entry of the Confirmation Order shall constitute (i) the
approval, pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy Code, of
the assumption of the executory contracts and unexpired leases assumed pursuant
to Section 6.1(a) hereof, (ii) the extension of time, pursuant to section
365(d)(4) of the Bankruptcy Code, within which the Debtors may assume or reject
the unexpired leases specified in Section 6.1(a) hereof through the date of
entry of an order approving the assumption or rejection of such unexpired leases
and (iii) the approval, pursuant to sections 365(a) and 1123(b)(2) of the
Bankruptcy Code, of the rejection of the executory contracts and unexpired
leases rejected pursuant to Section 6.1(a) hereof.

      (e) Cure of Defaults. Except as may otherwise be agreed to by the parties,
within sixty (60) days after the Effective Date, the Reorganized Debtors shall
cure any and all undisputed defaults under any executory contract or unexpired
lease assumed pursuant to the Plan in accordance with section 365(b)(1) of the
Bankruptcy Code or in accordance with agreements previously negotiated by the
parties in respect of the reduction of prepetition Claims, as applicable. All
disputed defaults that are required to be cured shall be cured either within
thirty (30) days of the entry of a Final Order determining the amount, if any,
of the Debtors' or Reorganized Debtors' liability with respect thereto, or as
may otherwise be agreed to by the parties.

      (f) Bar Date for Filing Proofs of Claim Relating to Executory Contracts
and Unexpired Leases Rejected Pursuant to the Plan. Claims arising out of the
rejection of an executory contract or unexpired lease pursuant to Section 6.1 of
the Plan must be Filed with the Bankruptcy Court and/or served upon the Debtors
or Reorganized Debtors or as otherwise may be provided in the Confirmation
Order, by no later than thirty (30) days after the later of (i) notice of entry
of an order approving the rejection of such executory contract or unexpired
lease, (ii) notice of entry of the Confirmation Order and (iii) notice of an
amendment to Schedules 6.1(a)(x) or 6.1(a)(y). Any Claims not filed within such
time will be forever barred from assertion against the Debtors, their Estates,
the Reorganized Debtors and their property. Unless otherwise ordered by the
Bankruptcy Court, all Claims arising from the rejection of executory contracts
and unexpired leases shall be treated as General Unsecured Claims under the
Plan.

      6.2 Indemnification Obligations. For purposes of the Plan, the obligations
of the Debtors to defend, indemnify, reimburse or limit the liability of their
present and any


                                       26
<PAGE>
former directors, officers or employees who were directors, officers or
employees, respectively, on or after the Commencement Date against any Claims or
obligations pursuant to the Debtors' certificates of incorporation or bylaws,
applicable state law, Canadian law, provincial law, or specific agreement, or
any combination of the foregoing, shall survive confirmation of the Plan, remain
unaffected thereby, and not be discharged irrespective of whether
indemnification, defense, reimbursement or limitation is owed in connection with
an event occurring before, on or after the Commencement Date.

      6.3 Modified Compensation and Benefit Programs. Except as provided in
Section 6.1(a) of the Plan, all employment and severance practices and policies,
and all compensation and benefit plans, policies, and programs of the Debtors
applicable to their directors, officers or employees, including, without
limitation, all savings plans, retirement plans, health care plans, severance
benefit plans, incentive plans, workers' compensation programs and life,
disability and other insurance plans are treated as executory contracts under
the Plan and are hereby assumed pursuant to sections 365(a) and 1123(b)(2) of
the Bankruptcy Code; provided, however, that the Debtors reserve the right to
modify, subject to the prior approval of the Creditors' Committee, any and all
such compensation and benefit practices, plans, policies, and programs.

      6.4 Retiree Benefits. Payments, if any, due to any person for the purpose
of providing or reimbursing payments for retired employees and their spouses and
dependents for medical, surgical, or hospital care benefits, or benefits in the
event of sickness, accident, disability, or death under any plan, fund, or
program (through the purchase of insurance or otherwise) maintained or
established in whole or in part by the Debtors prior to the Commencement Date
shall be continued for the duration of the period the Debtors have obligated
themselves to provide such benefits. Pursuant to the terms of the Debtors'
retiree benefit plans, the Debtors reserve the right to modify or terminate
benefits under such plans at any time, or from time to time.

      The Debtors will continue to be contributing sponsors of the Retirement
Plans. The Debtors intend to fund the Retirement Plans in accordance with the
minimum funding standards under ERISA, 29 U.S.C. ss. 1082, pay all required PBGC
insurance premiums, 29 U.S.C. ss. 1307, and comply with all requirements of the
Retirement Plans and ERISA. The Retirement Plans are defined benefit pension
plans insured by PBGC under Title IV of ERISA, 29 U.S.C. ss.ss. 1301-1461. No
provision of or proceeding within the Debtors' Chapter 11 Cases, the Plan, or
the Confirmation Order shall in any way be construed as discharging, releasing
or relieving the Debtors, the Reorganized Debtors, or any other party in any
capacity, from any liability with respect to the Retirement Plans or any other
defined benefit pension plan under any law, governmental policy or regulatory
provision. PBGC and the Retirement Plans shall not be enjoined or precluded from
enforcing liability resulting from any of the provisions of the Plan or the
Plan's confirmation.


                                       27
<PAGE>
                                  ARTICLE VII.

                    CONSOLIDATION OF PCI AND THE SUBSIDIARIES

      7.1 Restructuring Transactions. On or prior to the Effective Date, the
following transactions will be consummated by the Debtors in the order set forth
below; provided, however, that none of the following steps shall occur unless
all of the following steps occur and, provided, however, that the holders of
Claims shall receive the distributions provided for in Sections 4.3 and 4.4 of
the Plan.

      (a) On or prior to the Effective Date, PCICC shall continue into a Nova
Scotia company.

      (b) On or prior to the Effective Date, PCICC shall incorporate a Nova
Scotia unlimited liability company as a subsidiary.

      (c) On or prior to the Effective Date, PCA shall form a new corporation
("Newco"), a Delaware corporation.

      (d) PCA shall contribute the stock of PCICC and all of its other
subsidiaries (including PAI) to Newco for shares of Newco.

      (e) PCA shall file Articles of Conversion in Delaware, thus becoming a
limited liability company. This entity will hereinafter be referred to as PCA
LLC.

      (f) PCA LLC shall distribute the stock of Newco to PCI.

      (g) Newco shall be merged into PCI, the survivor being PCI. Pursuant to
the merger, Newco's assets, consisting of the stock of PCICC and the other
Subsidiaries, shall be transferred to PCI.

      (h) PCI shall contribute the stock of PAI to PCA LLC for a membership
interest in PCA LLC having an equivalent value.

      (i) Allowed PCA U.S. Secured Term and Note Claims as of the Record Date,
shall be exchanged for Allowed Secured Claims as of the Record Date relating to
the PCICC Senior Notes, based on the proportion of their Allowed PCA U.S.
Secured Term and Note Claim determined by the formula A x [B/C x 57%] where A is
the amount of a particular holder's Allowed PCA U.S. Secured Term and Note
Claims; B is the aggregate amount of the Allowed Secured Claims relating to
PCICC Senior Notes and C is the aggregate amount of the Allowed Canadian Secured
Term and Note Claims (the exchanged Claims are referred to as the "Exchanged
Allowed PCA U.S. Secured Term and Note Claims" and the Claims which are retained
by the initial holders are referred to as the "Retained Initial Allowed PCA U.S.
Secured Term and Note Claims"), and the holders of Allowed Secured Claims
relating to the PCICC Senior Notes as of the Record Date shall receive their Pro
Rata Share of the Exchanged Allowed PCA U.S. Secured Term and Note Claims and
the holders of the Allowed PCA U.S. Secured Term and Note Claims shall receive
on the exchange from the holders of the Allowed Secured Claims


                                       28
<PAGE>
relating to the PCICC Senior Notes, their Pro Rata Share of the proportion of
the Allowed Secured Claims relating to the PCICC Senior Notes determined by the
formula E x 43% where E is the aggregate Allowed Secured Claims relating to the
PCICC Senior Notes.

      (j) Allowed Secured Claims relating to the PCA Canadian Term Loan
Agreement shall be exchanged for Allowed Secured Claims relating to the PCICC
Senior Notes as of the Record Date, based on the proportion of the Allowed
Secured Claims relating to the PCA Canadian Term Loan Agreement determined by
the formula A x [B/C x 57%] where A is the amount of a particular holder's
Allowed Secured Claim relating to the PCA Canadian Term Loan Agreement, B is the
aggregate amount of the Allowed Secured Claims relating to the PCICC Senior
Notes and C is the aggregate amount of the Allowed Canadian Secured Term and
Note Claims (the exchanged Claims are referred to as the "Exchanged Allowed PCA
Canadian Term Loan Claims" and the Claims which are retained by the initial
holders are referred to as the "Retained Initial Allowed Secured PCA Canadian
Term Loan Claims"), and the holders of the Allowed Secured Claims relating to
the PCICC Senior Notes as of the Record Date shall receive their Pro Rata Share
of the Exchanged PCA Canadian Term Loan Claims and the holders of the Exchanged
PCA Canadian Term Loan Claims shall receive on the exchange from the holders of
the Allowed Secured Claims relating to the PCICC Senior Notes their Pro Rata
Share of the proportion of the Allowed Secured Claims relating to the PCICC
Senior Notes determined by the formula D x [E/F x 57%] where D is the amount of
the Allowed Claims relating to the PCICC Senior Notes, E is the aggregate amount
of the Allowed Secured Claims relating to the PCA Canadian Term Loan Agreement
and F is the aggregate amount of the Allowed Canadian Secured Term and Note
Claims.

      (k) PCI shall contribute to PCA LLC 9,700,000 shares of the New Common
Stock.

      (l) Subject to giving effect to the exchanges provided for in clauses (i)
and (j) above, Allowed PCA U.S. Secured Term and Note Claims shall be
transferred to PCA LLC.

      (m) Holders of the Retained Initial Allowed PCA U.S. Secured Term and Note
Claims shall receive in exchange for those Claims, their proportionate share of
the balance of the 9,700,000 shares of New Common Stock of PCI and New Tranche A
Term Notes that will not be distributed in the distributions provided for in
clauses (o) and (r) below.

      (n) Subject to giving effect to the exchanges provided for in clauses (i)
and (j) above, Allowed Secured Claims relating to the PCA Canadian Term Loan
Agreement shall be transferred to PCA LLC.

      (o) Holders of the Retained Initial Allowed Secured Claims relating to the
PCA Canadian Term Loan Agreement shall receive in exchange for those Claims,
their proportionate share of the (i) 9,700,000 shares of New Common Stock (to be
delivered by PCA LLC) and (ii) the New Tranche A Term Notes (to be issued by PCA
LLC) determined by the formula A/(A+43%) where A is the amount determined by the
formula


                                       29
<PAGE>
C/D x 57%, C is the aggregate amount of the Allowed Secured Claims in respect of
the PCA Canadian Term Loan and D is the aggregate amount of the Allowed Canadian
Secured Term and Note Claims.

      (p) PCICC and the subsidiary incorporated in clause (b) above shall
amalgamate to form PCICC ULC. The transactions occurring subsequent to the
amalgamation described in this clause (p) are conditioned upon the occurrence of
such amalgamation.

      (q) Subject to giving effect to the exchanges provided for in clauses (i)
and (j) above, PCICC ULC shall issue the New Tranche B Notes in exchange for the
Allowed Secured Claims relating to the PCICC Senior Notes.

      (r) Former holders of Exchanged Allowed PCA Canadian Term Loan Claims that
did not receive shares of the New Common Stock and the New Tranche A Term Notes
pursuant to clause (o) above shall receive their proportionate share of the New
Common Stock and the New Tranche A Term Notes based on the same formula used in
clause (o) above to determine the proportionate share received by the holders
mentioned in clause (o) above. Former holders of the Exchanged Allowed PCA U.S.
Secured Term and Note Claims that did not receive shares of the New Common Stock
and the New Tranche A Term Notes pursuant to clause (m) above shall receive
their proportionate share of the New Common Stock and New Tranche A debt after
subtracting the distributions to be made to both the holders of the Retained
Initial Allowed Secured Claims relating to the PCA Canadian Term Loan and the
holders of the Exchanged Allowed PCA Canadian Term Loan Claims.

      (s) PCI shall contribute PCA LLC to PCICC ULC in exchange for preference
stock of PCICC ULC having a fair market value equal to the value of PCA LLC.

      (t) PAI shall be merged into PCA LLC, the survivor being PCA LLC which
shall change its name to PAI LLC.

      (u) All inter-company debts owing by PAI LLC to PCICC ULC shall remain
outstanding and be paid in the ordinary course of business.

      7.2 Order of Transactions. For greater certainty, the approval and
confirmation of the Plan shall constitute the approval of each holder of an
Allowed PCA U.S. Secured Term and Note Claim and of an Allowed Canadian Secured
Term and Note Claim to each transaction listed above (provided, however, that
all such transactions occur) in the order set forth above including, without
limitation, the exchanges provided for in Sections 7.1(i), (j), (l), (m), (n),
(o), (q), and (r) of the Plan without any further action required to be taken by
such holder and each holder irrevocably appoints the Debtors as his agent to
give effect to all of the transactions described in Section 7.1 of the Plan.

      7.3 Approval and Acknowledgment. The approval and confirmation of the Plan
shall constitute an approval and acknowledgement by each of the parties that it
intends that: (a) Section 7.1(a) of the Plan constitutes a plan of
reorganization for U.S. federal income tax purposes; (b) Sections 7.1(e), (i),
(j), (l), (m), (n), (o), (q), and (r) of


                                       30
<PAGE>
the Plan are integrated and constitute a plan of reorganization for U.S. federal
income tax purposes pursuant to which the holders of PCA U.S. Secured Term and
Note Claims and PCA Canadian Term Loan Claims exchange directly with the Debtors
their Initial Allowed Claims(1) for PCI New Common Stock, New Tranche A Term
Notes, and New Tranche B Notes (in each case, which notes are issued by PCI for
U.S. federal income tax purposes); (c) Sections 7.1(i), (j), (l), (n), (p), (q),
and (r) of the Plan are integrated and constitute a plan of reorganization for
U.S. federal income tax purposes pursuant to which the holders of PCICC Senior
Note Claims exchange directly with the Debtors their Initial Allowed Claims for
PCI New Common Stock, New Tranche A Term Notes and New Tranche B Notes (in each
case, which notes are issued by PCI for U.S. federal income tax purposes); (d)
Section 7.1(t) of the Plan constitutes the adoption of a plan of complete
liquidation of PAI into PCI for U.S. federal income tax purposes; and (e) Newco
is a corporation that will engage in no activities other than as related to the
Plan and should be treated in accordance with the principles of Rev. Rul.
73-427. Confirmation of the Plan constitutes the agreement and acknowledgement
by PCI, its Subsidiaries, each of the holders of Allowed PCA U.S. Secured Term
and Note Claims, and each of the holders of Allowed Canadian Secured Term and
Note Claims not to report the transaction for U.S. federal income tax purposes
in a manner that is inconsistent with the prior sentence.

      7.4 Substantive Consolidation. Entry of the Confirmation Order shall
constitute the approval, pursuant to section 105(a) of the Bankruptcy Code,
effective as of the Effective Date, of the substantive consolidation of the
Chapter 11 Cases for all purposes related to the Plan, including, without
limitation, for purposes of voting, confirmation, and distribution. Pursuant to
such order, (i) all assets and liabilities of the Subsidiaries shall be deemed
merged or treated as though they were merged into and with the assets and
liabilities of PCI, (ii) no distributions shall be made under the Plan on
account of Intercompany Claims among the Debtors except as provided in Section
7.1 of the Plan, (iii) all guarantees of the Debtors of the obligations of any
other Debtor shall be deemed eliminated so that any Claim against any Debtor and
any guarantee thereof executed by any other Debtor and any joint or several
liability of any of the Debtors shall be deemed to be one obligation of the
consolidated Debtors, and (iv) each and every Claim filed or to be filed in the
Chapter 11 Case of any of the Debtors shall be deemed filed against the
consolidated Debtors, and shall be deemed one Claim against and obligation of
the consolidated Debtors. Such substantive consolidation shall not (other than
for purposes related to the Plan) affect (i) the legal and corporate structures
of the Reorganized Debtors, subject to the right of the Debtors or Reorganized
Debtors to effect restructurings as provided in Section 7.1 of the Plan, (ii)
Intercompany Claims by and among the Debtors or Reorganized Debtors, (iii)
Subsidiary Equity Interests, and (iv) pre- and post-Commencement Date guarantees
that are required to be maintained (a) in connection with executory contracts or
unexpired leases that were entered into during the Chapter 11 Cases or that have
been or will be assumed or (b) pursuant to the Plan.

----------
(1)   Initial Allowed Claim means, with respect to each creditor, the Allowed
      Claim(s) owned by such creditor prior to the consummation of the
      transactions set forth in Section 7.1 of the Plan.


                                       31
<PAGE>
      7.5 Issuance and Transfers of Common Stock of the Subsidiaries. On the
Effective Date, shares of new common stock of the Reorganized Subsidiaries shall
be issued to Reorganized PCI directly or indirectly so as to recreate the
prepetition corporate structure, subject to Section 7.1 of the Plan.

      7.6 Merger of Corporate Entities. On or as of the Effective Date, as
determined by the Debtors with the consent of the Creditors' Committee, any or
all of the Subsidiaries may be merged into one or more of the Debtors or
dissolved. Upon the occurrence of any such merger, all assets of the merged
entities shall be transferred to and become the assets of the surviving
corporation, and all liabilities of the merged entities, except to the extent
discharged, released or extinguished pursuant to the Plan and the Confirmation
Order, shall be assumed by and shall become the liabilities of the surviving
corporation. All mergers and dissolutions shall be effective as of the Effective
Date pursuant to the Confirmation Order without any further action by the
stockholders or directors of any of the Debtors, the Debtors in Possession or
the Reorganized Debtors.

                                 ARTICLE VIII.

                    PROVISIONS REGARDING CORPORATE GOVERNANCE
                    AND MANAGEMENT OF THE REORGANIZED DEBTORS

      8.1 General. On the Effective Date, the management, control and operation
of the Reorganized Debtors shall become the general responsibility of the
respective Boards of Directors of the Reorganized Debtors, which shall,
thereafter, have the responsibility for the management, control and operation of
the Reorganized Debtors.

      8.2 Meetings of Reorganized PCI Stockholders. In accordance with the
Amended PCI Certificate of Incorporation and the Amended PCI Bylaws, as the same
may be amended from time to time, the first annual meeting of the stockholders
of Reorganized PCI shall be held on a date in 2002 selected by the Board of
Directors of Reorganized PCI, and subsequent meetings of the stockholders of
Reorganized PCI shall be held at least once annually each year thereafter.

      8.3 Directors and Officers of Reorganized Debtors.

      (a)   Boards of Directors.

                  (i) Reorganized PCI. The New Board of Directors of Reorganized
            PCI shall initially comprise five (5) members. Four (4) members of
            the New Board of Directors shall be appointed by the Ad Hoc
            Committee. The fifth member shall be Michael J. Ferris, the Chief
            Executive Officer of the Reorganized Debtors. The size and
            composition of the New Board of Directors may be adjusted to comply
            with NASDAQ listing requirements. Each of the members of the New
            Board of Directors shall serve until the first annual meeting of
            stockholders of Reorganized PCI or their earlier resignation or
            removal in accordance with the


                                       32
<PAGE>
            Amended PCI Certificate of Incorporation or Amended PCI Bylaws, as
            the same may be amended from time to time.

                  (ii) Reorganized Subsidiaries. The initial Board of Directors
            of each of the Reorganized Subsidiaries shall consist of officers or
            employees of Reorganized PCI whose names shall be disclosed prior to
            the date of the Confirmation Hearing. Each of the members of each
            such initial Board of Directors shall serve until the first meeting
            of stockholders of the respective Reorganized Subsidiary or their
            earlier resignation or removal in accordance with the certificate of
            incorporation or bylaws of such Reorganized Subsidiary.

      (b) Officers. The officers of the respective Debtors immediately prior to
the Effective Date shall serve as the initial officers of the respective
Reorganized Debtors on and after the Effective Date. Such officers shall serve
in accordance with any employment agreement with the Reorganized Debtors and
applicable nonbankruptcy law.

      8.4 Amended Bylaws and Amended Certificates of Incorporation. The Amended
PCI Bylaws, the Amended PCI Certificate of Incorporation, and the bylaws and
certificates of incorporation of each of the Reorganized Subsidiaries shall be
amended and restated as of the Effective Date to the extent necessary (a) to
prohibit the issuance of nonvoting equity securities as required by section
1123(a)(6) of the Bankruptcy Code, subject to further amendment of such
certificates of incorporation and bylaws as permitted by applicable law and (b)
to effectuate the provisions of the Plan, in each case without any further
action by the stockholders or directors of the Debtors, the Debtors in
Possession or the Reorganized Debtors.

      8.5 Issuance of New Securities. The issuance of the following securities
and notes by Reorganized PCI, Reorganized PCA, or Reorganized PCICC, as
applicable, is hereby authorized without further act or action under applicable
law, regulation, order or rule. The Confirmation Order shall provide that the
issuance of the following securities and notes shall be exempt from the
registration requirements of the Securities Act of 1933, as amended, in
accordance with section 1145 of the Bankruptcy Code:

      (a)   10,000,000 shares of New Common Stock;

      (b)   the New Tranche A Term Notes;

      (c)   the New Tranche B Notes;

      (d)   the Guarantees; and

      (e)   the New Other Secured Notes.

      8.6 Management Equity Incentive Plan. The MEIP will become effective on
the Effective Date or as soon thereafter as is reasonably practicable and shall
be in substantially the form contained in the Plan Supplement. Unissued shares
of New Common Stock equal to ten percent (10%) of the total number of shares of
New


                                       33
<PAGE>
Common Stock outstanding immediately after the Effective Date shall be reserved
for issuance under the MEIP. The New Board of Directors shall make individual
awards of stock options exercisable into shares of New Common Stock under the
MEIP, and the New Board of Directors shall establish the terms relating thereto
(e.g., among other things, the number of options granted to each participant in
the MEIP, exercise price, and vesting).

                                  ARTICLE IX.

                IMPLEMENTATION AND EFFECT OF CONFIRMATION OF PLAN

      9.1 Means for Implementation of the Plan. In addition to the provisions
set forth elsewhere in the Plan, the following shall constitute the means for
implementation of the Plan:

      (a) Exit Financing. On the Effective Date, the transactions contemplated
by the Exit Facility shall be consummated and thereupon become effective.

      (b) Effectiveness of Securities, Instruments and Agreements. On the
Effective Date, all documents set forth in the Plan Supplement and all other
agreements entered into or documents issued pursuant to the Plan, including,
without limitation, the New Tranche A Term Loan Agreement, the New Tranche A
Term Notes, the New Tranche B Notes Indenture, the New Tranche B Notes, the
Guarantees, the MEIP, the New Common Stock, and/or any agreement entered into or
instrument issued or in connection with any of the foregoing shall become
effective and binding in accordance with their respective terms and conditions
upon the parties thereto and shall be deemed to become effective simultaneously.

      (c) Corporate Action for Reorganized Debtors. On the Effective Date, all
matters provided for under the Plan that would otherwise require approval of the
stockholders, directors or members of one or more of the Debtors or Reorganized
Debtors or their successors in interest under the Plan, including, without
limitation, the issue of preferred stock, the New Common Stock, the New Notes,
the Guarantees, and documents relating thereto, options pursuant to the MEIP,
the amendment and restatement of certificates of incorporation and bylaws of the
Reorganized Debtors, corporate mergers or dissolutions effectuated pursuant to
the Plan, and the election or appointment, as the case may be, of directors and
officers of the Debtors pursuant to the Plan, shall be taken without such
authorizations pursuant to section 303 of the General Corporation Law of the
State of Delaware, in the case of the Debtors and Reorganized Debtors
incorporated in the State of Delaware, and, in the case of Debtors and
Reorganized Debtors organized outside the State of Delaware, pursuant to the
applicable general corporation law of such other jurisdictions. On the Effective
Date or as soon thereafter as is practicable, the Reorganized Debtors shall, if
required, file their amended certificates of incorporation with the Secretary of
State of the state in which each Reorganized Debtor is incorporated, in
accordance with the applicable general corporation law of such states.


                                       34
<PAGE>
      (d) Approval of Agreements. The solicitation of votes on the Plan shall be
deemed a solicitation for the approval of the Plan Documents and all
transactions contemplated by the Plan. Entry of the Confirmation Order shall
constitute approval of the Plan Documents and such transactions, including,
without limitation, the transactions listed in Section 7.1 of the Plan.

      (e) Shelf Registration Statements. Prior to the Effective Date, unless
otherwise agreed by Putnam Investment Management LLC the Reorganized Debtors
shall file with the Securities and Exchange Commission, at their expense, a
"shelf" registration statement or registration statements on the applicable
registration forms (the "Shelf Registration Statements") under the Securities
Act for the offering for resale on a continuous or delayed basis (the "Shelf
Registration" or "Shelf Registrations") of the New Tranche B Notes (and the
Guarantees thereof),the New Tranche A Indenture Notes (and the Guarantees
thereof) and the New Common Stock held by persons who may be deemed to be
"underwriters" (such New Tranche B Notes, New Tranche A Indenture Notes,
Guarantees and New Common Stock are hereinafter referred to collectively as the
"Registerable Securities").

      (f) Cancellation of Existing Securities and Agreements. On the Effective
Date, the PCICC Senior Notes, the PCA Senior Notes, and any or all instruments
evidencing Canadian Secured Term and Note Claims or PCA U.S. Secured Term and
Notes Claims shall be cancelled and extinguished, and the holders thereof shall
have no rights and such instruments shall evidence no rights, except the right
to receive the distributions, if any, to be made to holders of such instruments
under the Plan and pursuant to the implementation of the transactions set forth
in Section 7.1 of the Plan. Except with respect to the performance by the
Indenture Trustees or their agents of the obligations of the Indenture Trustees
under the Plan or in connection with any distribution to be made under the Plan,
effective as of the Effective Date, the Indenture Trustees and their agents,
successors and assigns shall be discharged of all of their obligations
associated with, as the case may be, the PCA Senior Notes Indenture, the PCICC
Senior Notes Indenture, the PCA U.S. Term Loan Agreement, the PCA Canadian Term
Loan Agreement and related agreements and released from all Claims arising in
the Chapter 11 Cases and, effective as of the Effective Date, the PCA Senior
Notes Indenture, the PCICC Senior Notes Indenture, the PCA U.S. Term Loan
Agreement, and the PCA Canadian Term Loan Agreement shall be deemed cancelled,
except that such cancellation shall not impair the rights of either (i) the
holders of PCICC Senior Notes and/or PCA Senior Notes or (ii) the holders of
debt under the PCA U.S. Term Loan Agreement and/or the PCA Canadian Term Loan
Agreement to receive distributions under the Plan or the rights of the Indenture
Trustees under their respective charging liens, if any, pursuant to, as the case
may be, the PCA Senior Notes Indenture, the PCICC Senior Notes Indenture, the
PCA U.S. Term Loan Agreement, and the PCA Canadian Term Loan Agreement to the
extent that any of the Indenture Trustees have not received payment.

      (g) Rights of the Indenture Trustees. The Indenture Trustees shall be
entitled to Administrative Expense Claims as provided for in, and subject to the
restrictions of, this section of the Plan and no Reorganized Debtor shall have
any obligations to any


                                       35
<PAGE>
indenture trustee, including the Indenture Trustees, agent or servicer (or to
any Disbursing Agent replacing such indenture trustee, agent or servicer) for
any fees, costs or expenses except as expressly set forth in this Section
9.1(g). Prior to the Effective Date, the Indenture Trustees shall provide the
Debtors with a statement of the Indenture Trustee Expenses projected through the
Effective Date. Upon the timely receipt of one or more invoices in accordance
with the preceding sentence, the Reorganized Debtors shall, on the Effective
Date, pay the Indenture Trustees' Expenses, in full, in Cash. Notwithstanding
the foregoing, to the extent that the Reorganized Debtors dispute any portion of
the Indenture Trustees' Expenses, the Reorganized Debtors shall reserve Cash on
the Effective Date in such Disputed amount and such dispute shall be presented
to the Bankruptcy Court for adjudication. On the Effective Date, subject to the
payment of the non-Disputed portion of the Indenture Trustees' Expenses and the
establishment of the reserve set forth in the preceding sentence with respect to
any Disputed portion of the Indenture Trustee Expenses, all Liens of the
Indenture Trustees in any distributions shall be forever released and
discharged. Once the Indenture Trustees have completed performance of all of
their duties set forth in the Plan or in connection with any distributions to be
made under the Plan, if any, the Indenture Trustees, and their successors and
assigns, shall be relieved of all obligations as the Indenture Trustees,
respectively, effective as of the Effective Date.

      (h) Surrender of Existing Securities. As a condition precedent to
receiving any distribution pursuant to the Plan, each holder of a Canadian
Secured Term and Note Claim and/or a PCA U.S. Secured Term and Note Claim who
holds such securities in certificated form must surrender such PCICC Senior
Note, PCA Senior Note or other instrument evidencing such Canadian Secured Term
and Note Claim or PCA U.S. Secured Term and Note Claim to the appropriate
Disbursing Agents pursuant to a letter of transmittal furnished by the
Disbursing Agents. Any New Notes to be distributed pursuant to the Plan on
account of any such Claim will, pending such surrender, be treated as an
undeliverable distribution.

      (i) Special Procedures for Lost, Stolen, Mutilated or Destroyed
Instruments. In addition to any requirements under the Debtors' certificate of
incorporation or bylaws, any holder of a Claim evidenced by an instrument that
has been lost, stolen, mutilated or destroyed will, in lieu of surrendering such
instrument, deliver to the Disbursing Agents: (a) evidence satisfactory to the
Disbursing Agents and the Debtors of the loss, theft, mutilation or destruction
and (b) such security or indemnity as may be required by the Disbursing Agents
to hold the Disbursing Agents and the Debtors harmless from any damages,
liabilities or costs incurred in treating such individual as a holder of an
instrument. Upon compliance with this Section 9.1(i), the holder of a Claim
evidenced by any such lost, stolen, mutilated or destroyed instrument will, for
all purposes under the Plan, be deemed to have surrendered such instrument.

      (j) New Tranche A Term Notes Election. The New Tranche A Term Notes shall
be issued by PCA or its successor in interest to such persons as are entitled
thereto pursuant to Section 7.1 of the Plan in the form of a New Tranche A
Indenture Note issued pursuant to the New Tranche A Indenture or a New Tranche A
Loan Note issued pursuant to the New Tranche A Credit Facility (but not a
combination thereof) in


                                       36
<PAGE>
accordance with the following provisions of this Section 9.1(j). Prior to the
Effective Date, the Reorganized Debtors will distribute to each holder of an
Allowed PCA U.S. Secured Term and Note Claim and to each holder of an Allowed
PCA Canadian Secured Term and Note Claim a form (an "Election Form") whereby
each such holder may (subject to the conditions set forth in the Election Form)
elect, with respect to its Pro Rata Share of the New Tranche A Term Notes, to
receive such Pro Rata Share in the form of a New Tranche A Loan Note issued
pursuant to the New Tranche A Credit Facility. Holders of Allowed PCA U.S.
Secured Term and Note Claims and Allowed PCA Canadian Secured Term and Note
Claims that do not return the Election Form or that do not return a properly
completed Election Form within the time and in the manner specified in such
Election Form will be deemed to have irrevocably elected to receive their
respective Pro Rata Shares of the New Tranche A Term Notes in the form of a New
Tranche A Indenture Note issued pursuant to the New Tranche A Indenture. As a
condition to the delivery of New Tranche A Loan Notes, each holder electing to
receive a New Tranche A Loan Note will be required to (i) represent and warrant
that such holder is not an "underwriter" as such term is defined in Section
1145(b)(1) of the Bankruptcy Code and (ii) agree to be bound by the terms with
respect to and the agreements of "Lenders" contained in the New Tranche A Credit
Facility as if such holder were a party thereto. The Reorganized Debtors will be
entitled to determine, in good faith and subject to agreement with such
determination by the Creditors' Committee, as to whether an Election Form has
been properly completed and returned.

      (k) New Tranche B Notes. The New Tranche B Notes shall be in the aggregate
principal amount of $150 million, shall be issued by PCICC or its successor in
interest pursuant to the New Tranche B Notes Indenture, shall bear interest at
ten percent (10.0%) per annum, shall be payable semi-annually and shall mature
on the date seven (7) years after the Effective Date (the "New Tranche B
Notes"). The New Tranche B Notes shall not be redeemable by PCICC or its
successor in interest prior to the fourth (4th) anniversary of the Effective
Date. The New Tranche B Notes shall be redeemable at a price equal to 105% of
the principal amount thereof beginning on the fourth (4th) anniversary of the
Effective Date and until the fifth (5th) anniversary of the Effective Date, at a
price equal to 102.5% of the principal amount thereof beginning on the fifth
(5th) anniversary of the Effective Date and until the sixth (6th) anniversary of
the Effective Date, and at 100% of the principal amount thereof at any time
thereafter. Any such redemption shall include accrued and unpaid interest.

      (l) Liens Securing New Tranche A Term Notes and New Tranche B Notes. The
New Tranche A Term Notes and the New Tranche B Notes shall be secured by (i)
first priority Liens on all of the Reorganized Debtors' real and personal
property, tangible and intangible assets, rights, titles, and interests now
owned or hereinafter acquired, with the exception of (a) those assets of the
Reorganized Debtors that are subject to Liens on accounts receivable, inventory,
and general intangibles that relate thereto pursuant to the Exit Facility, and
(b) those assets of the Reorganized Debtors that are subject to Liens relating
to or arising under the Other Secured Claims; and (ii) second priority Liens on
all assets of the Reorganized Debtors that are subject to other prior Liens
(other than assets of the Reorganized Debtors that are subject to Liens to
secure the Exit Facility, unless the Exit Facility allows for the grant of such
Liens) as of the Effective Date, provided,


                                       37
<PAGE>
however, that any such second priority Liens shall be subject and subordinate to
the enforcement rights of the senior lienholder under the Exit Facility. The New
Tranche A Term Notes and the New Tranche B Notes shall rank senior in right of
payment to all other indebtedness and obligations of the Reorganized Debtors,
with the exception of the Exit Facility, with respect to which the New Tranche A
Term Notes and the New Tranche B Notes shall rank pari passu. On the Effective
Date, the Reorganized Debtors shall execute and deliver to the appropriate New
Indenture Trustee in connection with the New Tranche A Term Loan Agreement and
in connection with the New Tranche B Notes Indenture such documents,
instruments, and agreements entered into in connection therewith. On the
Effective Date, the Reorganized Debtors shall execute and deliver such further
documents, instruments, and agreements necessary to effectuate and further
evidence the terms and conditions of the Plan. The New Tranche A Term Notes and
the New Tranche B Notes shall be further secured by a first priority Lien
(subject to certain agreed upon exceptions) on all of the Reorganized Debtors'
right, title and interest in that certain approximately 8 mile pipeline used for
the transportation of chlorine (the "Pipeline"), which Pipeline is located in
and through a portion of Iberville and Ascension Parishes in the State of
Louisiana and which lies within certain rights of way and servitudes (the
"Servitudes") granted to the Reorganized Debtors, to the extent that the
Reorganized Debtors are able to provide such Lien on the Effective Date under
the terms of the Servitudes. To the extent that the Reorganized Debtors are
unable to provide such a Lien on the Pipeline in its entirety, they shall use
their best efforts to take such actions as are necessary subsequent to the
Effective Date to provide a first priority Lien (subject to certain agreed upon
exceptions) on the Pipeline in its entirety as security for the New Tranche A
Term Notes and the New Tranche B Notes, including, without limitation, obtaining
any necessary consents to the granting of such Lien from the owners of the
servient estates, the surveying of the Pipeline and the recordation of any
rights of the Reorganized Debtors in and to the Servitudes.

      (m) Guarantees. On the Effective Date, each of the Reorganized Debtors,
other than the applicable issuer, will guarantee payment in full when due,
whether at maturity, by acceleration, redemption, or otherwise, and all other
obligations of the respective issuers under the New Tranche A Indenture Notes,
the New Tranche A Loan Notes and the New Tranche B Notes (collectively, the
"Guarantees").

      (n) New Common Stock. The New Common Stock shall have a par value of $.01
per share and such rights with respect to dividends, liquidation, voting and
other matters as are provided for by applicable nonbankruptcy law or in the
Amended PCI Certificate of Incorporation and the Amended PCI Bylaws.

      (o) Listing of New Common Stock. Reorganized PCI shall use reasonable
commercial efforts to cause the shares of New Common Stock to be listed on a
national securities exchange or the Nasdaq National Market.

      (p) Operation of the Debtors in Possession Between the Confirmation Date
and the Effective Date. The Debtors shall continue to operate as Debtors in
Possession, subject to the supervision of the Bankruptcy Court, pursuant to the
Bankruptcy Code during the period from the Confirmation Date through and until
the Effective Date, and


                                       38
<PAGE>
any obligation incurred by the Debtors in Possession during that period shall
constitute an Administrative Expense Claim.

      (q) Administration After the Effective Date. After the Effective Date, the
Reorganized Debtors may operate their businesses, and may use, acquire, and
dispose of their property, free of any restrictions of the Bankruptcy Code and
Bankruptcy Rules, but subject to the continuing jurisdiction of the Bankruptcy
Court as set forth in Article XI of the Plan.

      9.2 Term of Bankruptcy Injunction or Stays. All injunctions or stays
provided for in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy
Code, or otherwise, and in existence on the Confirmation Date, shall remain in
full force and effect until the Effective Date.

      9.3 Revesting of Assets.

      (a) The property of the Estates of the Debtors shall revest in the
Reorganized Debtors on the Effective Date.

      (b) From and after the Effective Date, the Reorganized Debtors may operate
their businesses, and may use, acquire and dispose of property free of any
restrictions imposed under the Bankruptcy Code.

      (c) As of the Effective Date, all property of the Debtors and Reorganized
Debtors shall be free and clear of all Liens, Claims and interests of holders of
Claims and Equity Interests, except as provided in the Plan.

      9.4 Causes of Action. As of the Effective Date, pursuant to section
1123(b)(3)(B) of the Bankruptcy Code, any and all Causes of Action and avoidance
Claims the Debtors and Debtors in Possession are empowered to bring under
sections 502(d), 544, 545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy
Code or applicable non-bankruptcy law, shall become assets of the Reorganized
Debtors, and the Reorganized Debtors shall have the authority to prosecute such
Causes of Action and Avoidance Claims for the benefit of the Estates of the
Debtors. Specifically, the Debtors are reviewing their Schedules, including
payments made in the ninety (90) days prior to the Commencement Date as listed
in Section 3(a) of their Statement of Financial Affairs, and the Debtors and the
Reorganized Debtors reserve the right to identify, pursue and prosecute all
Causes of Action and Avoidance Claims thereunder. The Reorganized Debtors shall
have the authority to compromise and settle, otherwise resolve, discontinue,
abandon or dismiss all Causes of Action and Avoidance Claims without approval of
the Bankruptcy Court.

      9.5 Discharge of Debtors. The rights afforded herein and the treatment of
all Claims and Equity Interests herein shall be in exchange for and in complete
satisfaction, discharge and release of Claims and Equity Interests of any nature
whatsoever, including any interest accrued on such Claims from and after the
Commencement Date, against the Debtors and the Debtors in Possession, or any of
their assets or properties. Except as otherwise provided herein, (a) on the
Effective Date, all such Claims against and Equity


                                       39
<PAGE>
Interests in the Debtors shall be satisfied, discharged and released in full,
and (b) all persons shall be precluded from asserting against the Reorganized
Debtors, their successors, or their assets or properties any other or further
Claims or Equity Interests based upon any act or omission, transaction or other
activity of any kind or nature that occurred prior to the Confirmation Date.

      9.6 Injunction. Except as otherwise expressly provided in the Plan, the
Confirmation Order or a separate Order of the Bankruptcy Court, all entities who
have held, hold or may hold Claims against or Equity Interests in any or all of
the Debtors, are permanently enjoined, on and after the Effective Date, from (a)
commencing or continuing in any manner any action or other proceeding of any
kind with respect to any such Claim or Equity Interest; (b) the enforcement,
attachment, collection or recovery by any manner or means of any judgment,
award, decree or order against the Debtors on account of any such Claim or
Equity Interest; (c) creating, perfecting or enforcing any encumbrance of any
kind against the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Equity Interest; and (d) asserting any
right of setoff, subrogation or recoupment of any kind against any obligation
due from the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Equity Interest. Such injunction shall
extend to successors of the Debtors (including, without limitation, the
Reorganized Debtors) and their respective properties and interests in property.

                                   ARTICLE X.

                            EFFECTIVENESS OF THE PLAN

      10.1 Conditions Precedent to Effectiveness. The Plan shall not become
effective unless and until the following conditions shall have been satisfied or
waived pursuant to Section 10.3 of the Plan:

      (a) The Confirmation Order shall authorize and direct that the Debtors and
the Reorganized Debtors take all actions necessary or appropriate to enter into,
implement and consummate the contracts, instruments, releases, leases and other
agreements or documents created in connection with the Plan, including those
actions contemplated by the provisions of the Plan set forth in Section 9.1 of
the Plan.

      (b) The Confirmation Order shall be in form and substance reasonably
satisfactory to the Creditors' Committee and shall have become a Final Order.

      (c) The statutory fees owing to the United States Trustee shall have been
paid in full.

      (d) All Plan Documents shall be in a form reasonably satisfactory to the
Debtors, the Reorganized Debtors, and the Creditors' Committee.

      (e) The Exit Facility shall have been entered into by all parties thereto
and all conditions to the initial draw thereunder shall have been satisfied in
accordance with the terms thereof.


                                       40
<PAGE>
      (f) The CCAA Order shall have been issued in a form and substance
reasonably acceptable to the Creditors' Committee, shall not have been reversed,
stayed, modified or amended, and shall have become final, binding, and
nonappealable.

      (g) The Shelf Registration Statements shall have become effective.

      (h) All other actions, authorizations, consents and regulatory approvals
required (if any) and all Plan Documents necessary to implement the provisions
of the Plan shall have been obtained, effected or executed in a manner
acceptable to the Debtors and the Creditors' Committee or, if waivable, waived
by the Person or Persons entitled to the benefit thereof.

      10.2 Effect of Failure of Conditions.

      If each condition to the Effective Date has not been satisfied or duly
waived within sixty (60) days after the Confirmation Date, then (unless the
period for satisfaction or waiver of conditions has been extended at the option
of the Debtors for a period not exceeding 120 days) upon motion by any party in
interest, made before the time that each of the conditions has been satisfied or
duly waived and upon notice to such parties in interest as the Bankruptcy Court
may direct, the Confirmation Order will be vacated by the Bankruptcy Court;
provided, however, that notwithstanding the Filing of such motion, the
Confirmation Order may not be vacated if each of the conditions to the Effective
Date is either satisfied or duly waived before the Clerk enters a Final Order
granting such motion. If the Confirmation Order is vacated pursuant to this
Section 10.2, the Plan shall be deemed null and void in all respects, including
without limitation the discharge of Claims pursuant to section 1141 of the
Bankruptcy Code and the assumptions or rejections of executory contracts and
unexpired leases provided for herein, and nothing contained herein shall (1)
constitute a waiver or release of any Claims by, or Claims against, the Debtors
or (2) prejudice in any manner the rights of the Debtor.

      10.3 Waiver of Conditions to Confirmation and Effective Date.

      Each of the conditions to Confirmation and the Effective Date may be
waived in whole or in part by the Debtors and the Creditors' Committee at any
time, without notice or an Order of the Bankruptcy Court. The failure to satisfy
or to waive any condition may be asserted by the Debtors or the Creditors'
Committee regardless of the circumstances giving rise to failure of such
condition to be satisfied (including any action or inaction by the Debtors). The
failure of the Debtors or the Creditors' Committee to exercise any of the
foregoing rights will not be deemed a waiver of any other rights, and each such
right will be deemed an ongoing right that may be asserted at any time.

      10.4 Effects of Plan Confirmation.

      (a) Limitation of Liability. Neither the Debtors, the Reorganized Debtors,
the Creditors' Committee, the Ad Hoc Committee, U.S. Trust nor any of their
respective post-Commencement Date employees, officers, directors, agents or
representatives, or any Professional (which, for the purposes of this Section
10.4(a), shall include any Canadian counsel of the Debtors, the Reorganized
Debtors, the Ad Hoc Committee, or


                                       41
<PAGE>
the Creditors' Committee) employed by any of them, shall have or incur any
liability to any Person whatsoever, including, specifically, any holder of a
Claim, under any theory of liability (except for any Claim based upon willful
misconduct or gross negligence), for any act taken or omission made in good
faith directly related to formulating, preparing, disseminating, implementing,
confirming or consummating the Plan, the Confirmation Order, or any contract,
instrument, release, or other agreement or document created or entered into, or
any other act taken or omitted to be taken in connection with the Plan, provided
that nothing in this paragraph shall limit the liability of any Person for
breach of any express obligation it has under the terms of the Plan or under any
agreement or other document entered into by such Person either after the
Commencement Date or in accordance with the terms of the Plan or for any breach
of a duty of care owed to any other Person occurring after the Effective Date.
In all respects, the Debtors, the Reorganized Debtors, the Creditors' Committee,
the Ad Hoc Committee, and each of their respective members, officers, directors,
employees, advisors and agents shall be entitled to rely upon the advice of
counsel with respect to their duties and responsibilities under the Plan.
Nothing contained herein shall bar public investors from bringing direct, rather
than derivative, claims against officers, directors, and other third parties.

      (b) Releases. Except as otherwise provided in the Plan or the Confirmation
Order, on the Effective Date, the Debtors will release unconditionally, and
hereby are deemed to release unconditionally (i) each of the Debtors' officers,
directors, shareholders, employees, consultants, attorneys, accountants,
financial advisors and other representatives, (ii) the Creditors' Committee and,
solely in their capacity as members of representatives of the Creditors'
Committee, each member, consultant, attorney, accountant or other representative
of the Creditors' Committee, (iii) the Ad Hoc Committee and, solely in their
capacity as members or representatives of the Ad Hoc Committee, each member,
consultant, attorney, accountant or other representative of the Ad Hoc
Committee, (iv) the Indenture Trustees, (v) all holders of Canadian Secured Term
and Note Claims and/or PCA U.S. Secured Term and Notes Claims who may be
entitled to receive distribution of property pursuant to the Plan, and (vi) if a
holder votes its Claim to accept the Plan, such holder of a Pioneer 2000 Group
Claim and, in each case, any affiliate of such persons (the persons specified in
clauses (i), (ii), (iii), (iv), (v), and (vi) are referred to collectively as
the "Debtors' Releasees"), from any and all Claims, direct actions, causes of
action, demands, rights, damages, judgments, debts, obligations, assessments,
compensations, costs, deficiencies or other expenses of any nature whatsoever
(including, without limitation, attorneys' fees), whether fixed or contingent,
liquidated or unliquidated, direct or indirect, known or unknown which the
Debtors ever had, now have, or hereafter can, shall or may have, in law, equity
or otherwise, for, upon or arising out of or by reason of any fact, event,
circumstance, matter, cause or thing whatsoever taking place on or prior to the
Effective Date in any way relating to the Debtors' Releasees, the Debtors, the
Chapter 11 Cases or the Plan, including Claims or Causes of Action under Chapter
5 of the Bankruptcy Code. If and to the extent that the Bankruptcy Court
concludes that the Plan cannot be confirmed with any portion of the foregoing
releases, then the Debtors, with the prior consent of the Creditors' Committee,
reserve the right to amend the Plan so as to give effect as much as possible to
the foregoing releases, or to delete them; provided, however, that the foregoing
releases shall not apply to any Claims, direct actions, Causes of Action,


                                       42
<PAGE>
demands, rights, damages, judgments, debts, obligations, assessments,
compensations, costs, deficiencies or other expenses of any nature whatsoever
(including, without limitation, attorneys' fees) in the case of fraud.

      (c) Mutual Releases. On the Effective Date, the Debtors, the Debtors in
Possession, the members of the Creditors' Committee, the members of the Ad Hoc
Committee, and the Indenture Trustees shall be deemed to have released each
other, its, and such other's affiliates, principals, officers, directors,
attorneys, accountants, financial advisors, advisory affiliates, employees, and
agents from any and all Claims, direct actions, Causes of Action, demands,
rights, damages, judgments, debts, obligations, assessments, compensations,
costs, deficiencies or other expenses of any nature whatsoever (including,
without limitation, attorneys' fees), whether fixed or contingent, liquidated or
unliquidated, direct or indirect, known or unknown which they ever had, now
have, or hereafter can, shall or may have, in law, equity or otherwise, for,
upon or arising out of or by reason of any fact, event, circumstance, matter,
cause or thing whatsoever taking place on or prior to the Effective Date in any
way relating to the Debtors, the Debtors in Possession, the members of the
Creditors' Committee, the Ad Hoc Committee, the Indenture Trustees, the Chapter
11 Cases, or the Plan; provided, however, that the foregoing mutual release
shall not apply to any Claims, direct actions, Causes of Action, demands,
rights, damages, judgments, debts, obligations, assessments, compensations,
costs, deficiencies or other expenses of any nature whatsoever (including,
without limitation, attorneys' fees) (i) arising under or based on the Plan, the
Plan Documents, or any other document, instrument or agreement to be executed or
delivered thereunder or (ii) in the case of fraud. If and to the extent that the
Bankruptcy Court concludes that the Plan cannot be confirmed with any portion of
the foregoing releases, then the Debtors, with the prior consent of the
Creditors' Committee, reserve the right to amend the Plan so as to give effect
as much as possible to the foregoing mutual releases, or to delete them.

                                  ARTICLE XI.

                            RETENTION OF JURISDICTION

      The Bankruptcy Court shall have exclusive jurisdiction of all matters
arising out of, and related to, the Chapter 11 Cases and the Plan pursuant to,
and for the purposes of, sections 105(a) and 1142 of the Bankruptcy Code and
for, among other things, the following purposes:

      (a) To hear and determine pending applications for the assumption or
rejection of executory contracts or unexpired leases, if any are pending, and
the allowance of Claims resulting therefrom;

      (b) To determine any and all adversary proceedings, applications and
contested matters, including, without limitation, adversary proceedings and
contested matters arising in connection with the prosecution of Avoidance
Claims;


                                       43
<PAGE>
      (c) To hear and determine any objection to Administrative Expense Claims,
Claims or Equity Interests;

      (d) To enter and implement such Orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified or vacated;

      (e) To issue such Orders in aid of execution and consummation of the Plan,
to the extent authorized by section 1142 of the Bankruptcy Code;

      (f) To consider any amendments to or modifications of the Plan, to cure
any defect or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including, without limitation, the Confirmation Order;

      (g) To hear and determine all applications for compensation and
reimbursement of expenses of Professionals under sections 330, 331 and 503(b) of
the Bankruptcy Code;

      (h) To hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan;

      (i) To recover all assets of the Debtors and property of the Debtors'
Estates, wherever located;

      (j) To hear and determine matters concerning state, local and federal
taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code;

      (k) To make any determinations relating to or enforce any provisions of
the Plan governed by the Protocol;

      (l) To hear any other matter not inconsistent with the Bankruptcy Code;
and

      (m) To enter a final decree closing the Chapter 11 Cases.

                                  ARTICLE XII.

                            MISCELLANEOUS PROVISIONS

      12.1 Effectuating Documents and Further Transactions. Each of the Debtors
or Reorganized Debtors is authorized to execute, deliver, file or record such
contracts, instruments, releases, indentures and other agreements or documents
and take such actions as may be necessary or appropriate to effectuate and
further evidence the terms and conditions of the Plan and any notes or
securities issued pursuant to the Plan.

      12.2 Exemption from Transfer Taxes. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of notes or equity
securities under the Plan, the creation of any mortgage, deed of trust or other
security interest, the making or assignment of any lease or sublease, or the
making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan, including,


                                       44
<PAGE>
without limitation, any merger agreements or agreements of consolidation, deeds,
bills of sale or assignments executed in connection with any of the transactions
contemplated under the Plan shall not be subject to any stamp, real estate
transfer, mortgage recording or other similar tax.

      12.3 Termination of Committee. The appointment of the Creditors' Committee
shall terminate on the later of the Effective Date and the date of the hearing
to consider applications for final allowances of compensation and reimbursement
of expenses.

      12.4 Post-Confirmation Date Fees and Expenses. From and after the
Confirmation Date, the Debtors and Reorganized Debtors shall, in the ordinary
course of business and without the necessity for any approval by the Bankruptcy
Court, pay the reasonable fees and expenses of Professional persons thereafter
incurred by the Debtors and Reorganized Debtors, including, without limitation,
those fees and expenses incurred in connection with the implementation and
consummation of the Plan.

      12.5 Payment of Statutory Fees. All fees payable pursuant to section 1930
of the title 28 of the United States Code, as determined by the Bankruptcy Court
at the Confirmation Hearing, shall be paid in Cash equal to the amount of such
fees on the Effective Date. The Reorganized Debtors shall timely pay
post-confirmation quarterly fees assessed pursuant to 28 U.S.C. ss. 1930(a)(6)
until such time as the Bankruptcy Court enters a final decree closing these
Chapter 11 Cases, or enters an Order either converting these Chapter 11 Cases to
cases under Chapter 7 or dismissing these Chapter 11 Cases. After confirmation,
the Reorganized Debtors shall file with the Bankruptcy Court and shall transmit
to the United States Trustee a true and correct statement of all disbursements
made by the Reorganized Debtors for each month, or portion thereof, that these
Chapter 11 Cases remain open in a format prescribed by the United States
Trustee.

      12.6 Amendment or Modification of the Plan. Alterations, amendments or
modifications of the Plan may be proposed in writing by the Debtors, subject to
the prior approval of the Creditors' Committee, at any time prior to the
Confirmation Date, provided that the Plan, as altered, amended or modified,
satisfies the conditions of sections 1122 and 1123 of the Bankruptcy Code, and
the Debtors shall have complied with section 1125 of the Bankruptcy Code.

      12.7 Severability. In the event that the Bankruptcy Court determines,
prior to the Confirmation Date, that any provision in the Plan is invalid, void
or unenforceable, such provision shall be invalid, void or unenforceable with
respect to the holder or holders of such Claims or Equity Interests as to which
the provision is determined to be invalid, void or unenforceable. The
invalidity, voidness or unenforceability of any such provision shall in no way
limit or affect the enforceability and operative effect of any other provision
of the Plan.

      12.8 Revocation or Withdrawal of the Plan. The Debtors, subject to the
prior approval of the Creditors' Committee, reserve the right to revoke or
withdraw the Plan prior to the Confirmation Date. If the Debtors revoke or
withdraw the Plan prior to the Confirmation Date, then the Plan shall be deemed
null and void. In such event, nothing


                                       45
<PAGE>
contained herein shall constitute or be deemed a waiver or release of any claims
by or against the Debtors or any other person or to prejudice in any manner the
rights of the Debtors or any person in any further proceedings involving the
Debtors.

      12.9 Binding Effect. The Plan shall be binding upon and inure to the
benefit of the Debtors, the holders of Claims and Equity Interests, and their
respective successors and assigns, including, without limitation, the
Reorganized Debtors.

      12.10 Notices. All notices, requests and demands to or upon the Debtors or
the Reorganized Debtors to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed, addressed as follows:

        If to the Debtors:

        Pioneer Companies, Inc.
        700 Louisiana Street, Suite 4300
        Houston, Texas  77002
        Attn:  Kent Stephenson, Esq.
        Telephone:  (713) 570-3257
        Facsimile:  (713) 223-9202

        with copies to:

        Weil, Gotshal & Manges LLP               Weil, Gotshal & Manges LLP
        700 Louisiana, Suite 1600                100 Crescent Court, Suite 1300
        Houston, Texas  77002                    Dallas, Texas  75201
        Attn:  Alan Shore Gover, Esq.            Attn:  Robert C. Feldman, Esq.
        Telephone:  (713) 546-5000               Telephone:  (214) 746-7700
        Facsimile:  (713) 224-9511               Facsimile:  (214) 746-7777

        Dewey Ballantine LLP                     Kaye Scholer LLP
        1301 Avenue of the Americas              311 S. Wacker Drive, Suite 6200
        New York, New York  10019-6092           Chicago, IL  60606
        Attn:  Michael J. Sage, Esq.             Attn:  Richard G. Smolev, Esq.
        Telephone:  (212) 259-8000               Telephone:  (312) 583-2330
        Facsimile:  (212) 259-6333               Facsimile:  (312) 583-2360

      12.11 Governing Law. Except to the extent the Bankruptcy Code, Bankruptcy
Rules or other federal law is applicable, or to the extent an exhibit to the
Plan provides otherwise, the rights and obligations arising under the Plan shall
be governed by, and construed and enforced in accordance with, the laws of the
State of New York, without giving effect to the principles of conflicts of law
of such jurisdiction.

      12.12 Withholding and Reporting Requirements. In connection with the
consummation of the Plan, the Debtors or the Reorganized Debtors, as the case
may be,


                                       46
<PAGE>
shall comply with all withholding and reporting requirements imposed by any
federal, state, local or foreign taxing authority and all distributions
hereunder shall be subject to any such withholding and reporting requirements.

      12.13 Plan Supplement. Forms of the documents relating to the Amended PCI
Certificate of Incorporation, the Amended PCI Bylaws, the New Notes, the New
Tranche A Term Loan Agreement, the New Tranche B Notes Indenture, Schedules
6.1(a)(x) and 6.1(a)(y) referred to in Section 6.1 of the Plan, the MEIP, and
all other material agreements related thereto, shall be contained in the Plan
Supplement and Filed with the Clerk of the Bankruptcy Court at least five (5)
days prior to the Voting Deadline. Forms of the documents relating to the Exit
Facility shall be contained in the Plan Supplement and Filed with the Clerk of
the Bankruptcy Court at least ten (10) days prior to the Voting Deadline. Upon
its filing with the Bankruptcy Court, the Plan Supplement may be inspected in
the office of the Clerk of the Bankruptcy Court during normal court hours.
Holders of Claims or Equity Interests may obtain a copy of the Plan Supplement
upon written request to PCI in accordance with Section 12.12 of the Plan or by
telephonic request as set forth in the notice to be served in conjunction with
the Filing of the Plan Supplement.

      12.14 Voting for Purposes of the Canadian Plan. The holders of Allowed PCA
U.S. Secured Term and Note Claims and Allowed U.S. Deficiency Claims voting on
the Plan shall be deemed to have cast the same vote (whether accepting or
rejecting the Plan) on the Canadian Plan in the same aggregate amount as an
Unsecured Creditor (as defined in the Canadian Plan) under the Canadian Plan.
The holders of Allowed Canadian Secured Term and Note Claims voting on the Plan
shall be deemed to have cast the same vote (whether accepting or rejecting the
Plan) on the Canadian Plan in the same amount as a Secured Creditor (as defined
in the Canadian Plan) under the Canadian Plan. The holders of Allowed Canadian
Deficiency Claims voting on the Plan shall be deemed to have cast the same vote
(whether accepting or rejecting the Plan) on the Canadian Plan in the same
amount as an Unsecured Creditor (as defined in the Canadian Plan) under the
Canadian Plan. The holders of Allowed Unsecured Claims against PCICC voting on
the Plan shall be deemed to have cast the same vote (whether accepting or
rejecting the Plan) for the Canadian Plan in the same amount as an Unsecured
Creditor (as defined in the Canadian Plan) under the Canadian Plan.

      12.15 Allocation of Plan Distributions Between Principal and Interest. To
the extent that any Allowed Claim entitled to a distribution under the Plan is
comprised of indebtedness and accrued but unpaid interest thereon, such
distribution shall be allocated to the principal amount of the Claim first and
then, to the extent the consideration exceeds the principal amount of the Claim,
to accrued but unpaid interest.

      12.16 Headings. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.

      12.17 Exhibits/Schedules. All exhibits and schedules to the Plan,
including the Plan Supplement, are incorporated into and are a part of the Plan
as if set forth in full herein.


                                       47
<PAGE>
      12.18 Filing of Additional Documents. On or before substantial
consummation of the Plan, the Debtors, subject to the prior approval of the
Creditors' Committee, shall File with the Bankruptcy Court such agreements and
other documents as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan.

      12.19 No Admissions. Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by any entity with
respect to any matter set forth herein.

Dated: Houston, Texas
       September 21, 2001

                                        PIONEER COMPANIES, INC.,
                                        a Delaware corporation
                                        (for itself and on behalf
                                        of each of the Subsidiaries)


                                        By: /s/ Michael J. Ferris
                                            ----------------------------------
                                            Name:  Michael J. Ferris
                                            Title: President and Chief Executive
                                                   Officer

                                       48
<PAGE>
                                EXHIBIT A TO PLAN

                                  CANADIAN PLAN