POP Pope & Talbot

Pope & Talbot, Inc. (NYSE:POP) today announced that it entered into a forbearance agreement with its senior secured lenders to extend access to liquidity provided by the revolving credit facility under its senior secured credit agreement for six weeks while it continues to explore options to improve its balance sheet. The forbearance agreement requires the Company to expand those efforts during the six-week forbearance period to include soliciting offers to purchase all or substantially all of the Company�s assets or equity interests. As Pope & Talbot previously disclosed would be likely, it is out of compliance with a financial covenant in its senior secured credit agreement calculated as of June 30, 2007. The covenant requires the Company to maintain a certain minimum EBITDA � generally earnings before interest, taxes, depreciation and amortization with certain additional modifications as set forth in the credit agreement. The Company was unable to generate the EBITDA required under its credit agreement for the four-quarter period ended June 30, 2007 and therefore is in default under the credit agreement. Pope & Talbot expects to report earnings for the second quarter of 2007 and file its Form 10-Q quarterly report on August 9, 2007. Pope & Talbot has entered into a forbearance agreement dated as of July 31, 2007 with its secured lenders. Pursuant to the agreement, the lenders have agreed that, until September 17, 2007, the Company will continue to have access to its revolving credit facility with total availability of $67 million. The agreement also provides for default rate interest to be paid effective July 1, 2007 and a forbearance fee, and for the implementation of a mechanism, similar to that which exists in other corporate asset-based loans, through which cash in the Company�s deposit accounts will be used to repay borrowings under the revolving credit facility on a daily basis and correspondingly increase availability under the facility. Although the Company may seek further forbearance or other relief from its senior lenders when the current agreement expires on September 17, 2007, it cannot provide any assurance that it will be successful in obtaining such further forbearance or other relief, or as to the terms upon which such forbearance or other relief may be granted. Even if the Company is successful in obtaining additional covenant relief, it will continue to be challenged in its ability to maintain adequate levels of liquidity relative to the size of its operations. Accordingly, the Company is continuing to explore alternatives to strengthen its balance sheet and generate cash, including one or more possible asset sales or other capital infusions, and is analyzing its ability to restructure its debt and other liabilities. The Company has retained Rothschild Inc. to assist in those efforts. Caution Regarding Forward-Looking Statements: This press announcement and other Company communications may contain statements relating to future performance of the Company that are forward-looking statements. These statements relate to the Company's future plans, objectives, expectations and intentions and may be identified by words like "believe," "expect," "may," "will," "should," "seek," or "anticipate," and similar expressions. The Company cautions readers that any such forward-looking statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks including, but not limited to, risks associated with future financial results and liquidity including the Company's continued ability to finance its operations in the normal course, the continuation of the forbearance agreement without the occurrence of a termination event thereunder or the potential necessity for additional forbearance agreements, the possibility that the Company may need to commence bankruptcy proceedings, fluctuation of the borrowing base and other limitations that may affect the Company's ability to borrow under its revolving credit facilities or otherwise, the Company's relationship with and payment terms provided by its trade creditors, additional financing requirements, the results of renegotiating certain key commercial agreements, the effect of commodity and raw material prices, foreign currency fluctuations, the effect of U.S. housing market conditions and other uncertainties previously detailed in the Company's filings with the SEC. Due to these uncertainties, there is an inherent risk that actual results will differ materially from any forward-looking statements. The Company is under no obligation to (and expressly disclaims any such obligation to) update or alter any forward-looking statements whether as a result of new information, future events or otherwise.