Aug 07, 2007. /Lesprom Network/. Pope & Talbot, Inc. announced on August 6, 2007 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 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. Pope & Talbot is a pulp and wood products business. The company is based in Portland, Oregon and trades on the New York Stock Exchange. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim.