Exhibit 10f

AGREEMENT

This Agreement (this "Agreement") is entered into effective as of July 24, 2002,
by and among Touch America Holdings, Inc., a Delaware corporation (the
"Company"), and Jerrold P. Pederson ("Pederson").

Recitals

A. The Montana Power Company and Pederson entered into an agreement dated July
21, 1999 (the "CIC Agreement") to provide benefits to Pederson under certain
circumstances.

B. In conjunction with the Company's and Pederson's negotiation and execution of
an employment agreement (the "Employment Agreement"), the parties now wish to
resolve certain issues concerning the respective rights and obligations arising
under the CIC Agreement as a result of the transactions approved by the
Company's shareholders and consummated on February 15, 2002 (the "Transaction").

C. The execution of the Employment Agreement is a condition to the execution of
this Agreement.

NOW, THEREFORE

, in consideration of the foregoing and the mutual promises and covenants
contained herein, the parties hereby agree as follows:

1. Payment to Pederson; Pederson Release. Upon execution of this Agreement and,
except as provided in Section 2 of this Agreement, in full and complete
satisfaction of the Company's obligations to Pederson arising under Sections 1
and 2 of the CIC Agreement as a result of the Transaction, the Company will,
within five days of the date of this Agreement, pay Pederson $1,164,000 (the
"CIC Payment"). The payment shall be by check made payable to Pederson or by
wire transfer to an account designated in writing by Pederson. Pederson
acknowledges and agrees that (i) the CIC Payment is in full and complete
satisfaction of any and all of the Company's obligations under Sections 1 and 2
of the CIC Agreement arising as a result of the Transaction or otherwise, (ii)
he shall not be entitled to any further payment under the CIC Agreement as a
result of any future transactions involving the Company, and (iii) the Company
(or any successor or assignee of the Company) shall have no further obligation
to Pederson except as specifically contemplated by Section 2 of this Agreement.

2. Remaining Company Obligations to Pederson under the CIC Agreement. Except for
the Company's obligations to Pederson under Sections 3 and 5 of the CIC
Agreement, which shall remain in full force and effect following the payment to
Pederson under Section 1, the Company (nor any successor or assignee) shall have
no further obligation to Pederson under the CIC Agreement.

 

 

3. General Provisions.

(a) This Agreement constitutes the full and entire understanding and agreement
between the parties with respect to the subject matter hereof and, except as set
forth in this Agreement, supersedes all prior agreements with respect to the
subject matter hereof. This Agreement may not be altered or amended, except by a
writing executed by the party against whom such alteration or amendment is to be
enforced.

(b) This Agreement shall be deemed incorporated into, and a part of, the CIC
Agreement.

(c) This Agreement is made under and shall be governed by and construed in
accordance with the laws of the State of Montana, without regard to principles
of conflicts of laws.

IN WITNESS WHEREOF

, the parties hereto have executed this Agreement.

TOUCH AMERICA HOLDINGS, INC.

 

By: ____________________________________
Robert P. Gannon

Its: Chairman of the Board & Chief Executive

Officer

 

 

JERROLD P. PEDERSON

______________________________________
Jerrold P. Pederson