<PAGE>

                                                                   EXHIBIT 10.90

                          SALE AND PURCHASE AGREEMENT
                          ---------------------------

This Agreement is made this 27th day of January, 1997, by and between McLeodUSA
Publishing Company, formerly known as Telecom*USA Publishing Company, an Iowa
corporation ("McLeod"), Fronteer Financial Holdings, Ltd., a Colorado
corporation ("Fronteer"), Classified Directories, Inc., a North Dakota
corporation ("Classified"), Larry A. Scott ("Scott"), James Greff ("Greff"),
Randall L. Gowin ("Gowin"), Edwin Dressler ("Dressler") and certain directors,
officers and shareholders of Fronteer.

McLeod and Fronteer entered into a Sale and Purchase Agreement dated April 27,
1995 ("the Idaho Sale Agreement"), also executed by Scott, Greff, Dressler and
Gowin. McLeod and Fronteer entered into an Option Agreement dated April 27, 1995
("the Option Agreement"). Scott, Greff, Dressler and Gowin are the principal and
only shareholders, directors and officers of Classified. McLeod and Scott
entered into a Covenant not to Compete and Confidentiality Agreement dated May
5, 1995, pursuant to terms of the Idaho Sale Agreement and agreed to enter into
a separate Covenant not to Compete and Confidentiality Agreement pursuant to
terms of the Option Agreement. McLeod and Greff entered into a Covenant not to
Compete and Confidentiality Agreement dated May 2, 1995, pursuant to terms of
the Idaho Sale Agreement. McLeod and Dressler entered into a Covenant not to
Compete and Confidentiality Agreement dated May 5, 1995, pursuant to terms of
the Idaho Sale Agreement and agreed to enter into a separate Covenant not to
Compete and Confidentiality Agreement pursuant to terms of the Option Agreement.
McLeod and Gowin entered into a Covenant not to Compete and Confidentiality
Agreement dated April 28, 1995, pursuant to terms of the Idaho Sale Agreement
and agreed to enter into a separate Covenant not to Compete and Confidentiality
Agreement pursuant to terms of the Option Agreement.

The parties desire to modify the various agreements described or mentioned above
(referred to collectively as "the Various Agreements"). The parties have agreed
to modify certain rights, obligations, terms and conditions of the Various
Agreements pursuant to this Agreement and as set out in this Agreement.

McLeod and Classified desire to purchase certain telephone directory business of
Fronteer. Fronteer desires to sell certain of its telephone directory business
to McLeod and Classified under the terms and conditions set out below. The
parties desire to fully resolve all rights and duties regarding Fronteer's
telephone directories listed on Exhibit "A" attached hereto and incorporated
herein (collectively referred to as the "Directories").

In consideration of the representations set out above and the following
covenants, promises and representations, the parties agree as follows:

1.   VARIOUS AGREEMENTS
     ------------------
     This Agreement modifies, replaces and supplements certain rights and
     obligations of the parties as set out in the Various Agreements and to the
     extent any of the terms of this Agreement conflict with any of the terms of
     the Various Agreements this Agreement controls. In the event

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     this Agreement is declared null and void pursuant to any provision of this
     Agreement, all rights, obligations, terms and conditions of the Various
     Agreements shall remain in full force and effect without any modifications,
     replacements or supplements.

2.   DIRECTORIES TO BE PURCHASED BY McLEOD
     -------------------------------------
     Fronteer hereby sells and McLeod hereby purchases Fronteer's telephone
     directories designated on Exhibit "A" as being purchased by McLeod, and, in
     the event McLeod is required to pay the consideration due from Classified
     pursuant to Section 5 below, the Durum Triangle directory listed on Exhibit
     "A," (referred to as the "McLeod Purchase Directories"), including all
     product designs and drawings (subject to the rights of advertising
     subscribers or third parties in such literary property), catalogs, data,
     files, records, price lists, and other documents relating to suppliers of
     Fronteer, and all customer lists and contracts, catalogs and marketing
     materials, and contract lead systems used by Fronteer in connection with
     the McLeod Purchase Directories. This transaction includes all patents,
     trademarks, licenses, copyrights, brand names, and trade names (whether
     registered or subject to being registered), including specifically and not
     by way of limitation, the name "Fronteer Directory Company" all proprietary
     information and all trade secrets used or owned by Fronteer, except (1) the
     licenses, copyrights and directory names used in connection with the "Durum
     Triangle," "Souris River," and "Southeast North Dakota" directories, and
     (2) the following corporate names: Fronteer Financial Holdings, Fronteer
     Personnel Service and Fronteer Marketing Group.

     The purchase specifically includes Fronteer's audiotex and similar
     equipment associated with or used in connection with the McLeod Purchase
     Directories or audiotex services identified in the McLeod Purchase
     Directories, such equipment being listed on Exhibit "B" attached hereto and
     incorporated herein, which Fronteer warrants is not presently in need of
     and on Closing (as described below) will not be in need of maintenance or
     service work. Such equipment shall be delivered by Bill of Sale in the form
     attached as Exhibit "C." After Closing, Fronteer will use such audiotex
     equipment is accordance with the provisions of Section 8 of this Agreement,
     but McLeod will perform all maintenance and service work on such audiotex
     equipment.

     The above-described items relating to the McLeod Purchase Directories
     published by Fronteer prior to Closing shall be delivered to McLeod on or
     before Closing. The above-described items relating to the McLeod Purchase
     Directories to be published by Fronteer after Closing shall be delivered to
     McLeod on the date each of the McLeod Purchase Directories is delivered to
     a printer for printing. Fronteer shall deliver to McLeod fifty (50) copies
     of the Fargo directory at Closing and fifty (50) copies of each of the
     other Directories within ten (10) days after each such Directory is
     published.

     This transaction does not include any receivables of Fronteer, and McLeod
     is not assuming any liabilities of Fronteer. Fronteer is entitled to all
        ---
     receivables in connection with the Directories from the editions listed on
     Exhibit "A" and prior editions of the Directories sold, published and
     delivered by Fronteer. McLeod is entitled to all receivables generated from
     all future editions of the McLeod Purchase Directories.

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3.   DIRECTORIES TO BE PURCHASED BY CLASSIFIED
     -----------------------------------------
     Fronteer hereby sells and Classified hereby purchases Fronteer's Durum
     Triangle directory, designated on Exhibit "A" as being purchased by
     Classified, including all product designs and drawings (subject to the
     rights of advertising subscribers or third parties in such literary
     property), catalogs, data, files, records, price lists, and other documents
     relating to suppliers of Fronteer for the Durum Triangle directory, and all
     customer lists and contracts, catalogs and marketing materials, and
     contract lead systems used by Fronteer in connection with the Durum
     Triangle directory. This transaction includes any licenses, copyrights and
     the directory name used by Fronteer in connection with the Durum Triangle
     directory, but specifically does not include any right to use in any manner
     the name "Fronteer" or "Fronteer Directory Company."

     The above described items relating to the Durum Triangle directory shall be
     delivered to the purchaser of the Durum Triangle directory on the date of
     payment of consideration for the Durum Triangle directory. Fronteer shall
     deliver to the purchaser of the Durum Triangle directory fifty (50) copies
     of the Durum Triangle directory within ten (10) days after the Durum
     Triangle directory is published.

     McLeod hereby assigns to Classified its right, title and interest in or to
     the Souris River and Southeast North Dakota directories and, in the event
     Classified pays the cash consideration for the Durum Triangle directory, in
     and to the Durum Triangle directory.

     This transaction does not include any receivables of Fronteer, and
     Classified is not assuming any liabilities of Fronteer. Fronteer is
                   ---
     entitled to all receivables in connection with the Directories from the
     editions listed on Exhibit "A" and prior editions of the Directories sold,
     published and delivered by Fronteer. Classified is entitled to all
     receivables generated from all future editions of the directories purchased
     by Classified.

4.   PAYMENT BY OF CONSIDERATION BY McLEOD
     -------------------------------------
     The cash consideration from McLeod for this Agreement is estimated to be
     $4,000,000.00, which is based upon estimated net cash revenue of
     $3,700,000.00 from the first six directories listed on Exhibit "A", plus
     $300,000.00 over and above said estimated net cash revenue, and is subject
     to the adjustment requirements of Section 6 below. $1,000,000.00 of the
     consideration from McLeod will be allocated and paid to the
     officers/shareholder/directors of Fronteer in exchange for the Covenant not
     to Compete and Confidentiality Agreements described and required below, and
     the remaining consideration will be allocated and paid to Fronteer. The
     consideration from McLeod will be paid, subject to the conditions set out
     in Sections 10, 13, 14 & 21 below, as follows:

          (1)  $1,000,000.00 to Fronteer on March 1, 1997, to be paid in the
     form of $500,000.00 in cash and $500,000.00 by payoff of the full amount of
     the promissory note given to McLeod by Fronteer pursuant to the Option
     Agreement, which will then be marked by McLeod as paid on March 1, 1997,

          (2)  $1,000,000.00 to officers/shareholders/directors, in the
     percentage amounts shown on Exhibit "D," within five (5) business days
     after the later of [a] the date when Fronteer certifies to

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     McLeod that Fronteer has completed publication and distribution of the
     Fargo and Badlands (Dickinson) directories listed on Exhibit "A," or [b]
     March 1, 1997,

          (3)  $900,000.00 to Fronteer within five (5) business days after
     Fronteer certifies to McLeod that Fronteer has completed publication and
     distribution of the fifth directory listed on Exhibit "A," and,

          (4)  all remaining unpaid consideration to Fronteer within five (5)
     business days after [a] Fronteer certifies that all McLeod Purchase
     Directories have been published and distributed, and, [b] the total net
     cash revenue for the McLeod Purchase Directories has been determined
     pursuant to Section 6 below, with the final payment adjusted pursuant to
     the provisions of Section 6 below.

5.   PAYMENT OF CONSIDERATION BY CLASSIFIED
     --------------------------------------
     The cash consideration from Classified for this Agreement is equal to the
     net cash revenue from the April, 1997 edition of the Durum Triangle
     directory listed on Exhibit "A." Twenty-five percent (25%) of the
     consideration from Classified will be allocated and paid to the
     officers/shareholder/directors of Fronteer listed, and in the percentage
     amounts shown, on Exhibit "D" in exchange for the Covenant not to Compete
     and Confidentiality Agreements described and required below, and the
     remaining consideration will be allocated and paid to Fronteer. The
     consideration from Classified will be paid to Fronteer within fourteen (14)
     days after Fronteer certifies that publication and distribution of the
     Durum Triangle directory has been completed and the total net cash revenue
     for the Durum Triangle directory has been determined pursuant to Section 6
     below, adjusted pursuant to the provisions of Section 6 below.

     In the event Classified fails to timely pay consideration to Fronteer in
     accordance with this section, Fronteer will notify McLeod of such fact and
     McLeod will pay to Fronteer the consideration due from Classified within
     fourteen (14) days of said notice. Upon payment by McLeod, (1) Fronteer
     will convey to McLeod all right, title and interest in the Durum Triangle
     directory, (2) the Durum Triangle directory will thereafter be treated as
     though it were one of the McLeod Purchase Directories and McLeod will have
     the same rights with respect to the Durum Triangle directory as Classified
     had to the Durum Triangle directory and as it has in and to the McLeod
     Purchase Directories, and, (3) all rights of Classified in and to the Durum
     Triangle directory will be terminated and Classified will have no further
     right, title or interest in or to the Durum Triangle directory.

6.   NET CASH REVENUE REQUIREMENT
     ----------------------------
     Fronteer represents and warrants that the net cash revenue of the editions
     of each of the Directories listed on Exhibit "A" was, or will, be as shown
     on Exhibit "A." Net cash revenue shall include all contracted for gross
     revenue in the form of cash paid or accounts receivable (reduced by any
     commissions or share paid to any telephone company), including national
     revenue, but shall exclude cancellations, promotional discounts, payment
     plan/cash discounts, and any revenue traded for value other than cash or
     accounts receivables for each directory. If the net cash revenue from any
     directory listed on Exhibit "A" is more or less than as shown on Exhibit
     "A," the consideration paid, as set out in Section 4 or 5 above, as
     applicable, shall be increased or reduced

                                                                          page 4
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     accordingly by one dollar for each dollar the net cash revenue for such
     directory is above or below that shown on Exhibit "A". McLeod and Fronteer
     shall determine the net cash revenue for each of the McLeod Purchase
     Directories upon certification of completion of each such directory by
     Fronteer as described in Section 8 below and such determination shall be
     acceptable to McLeod, in its sole discretion. Fronteer and the purchaser of
     the Durum Triangle directory shall determine the net cash revenue for the
     Durum Triangle directory upon certificate of completion of such directory
     by Fronteer as described in Section 8 below.

7.   CLOSING
     -------
     Closing shall take place at Fronteer's offices at 216 North 23 Street,
     Bismarck, North Dakota, at 2:00 p.m., c.s.t., on January 27, 1997, or at
     such other time, date, and place as may be agreed by the parties
     ("Closing").

8.   CONDUCT OF FRONTEER
     -------------------
     All sales, production and distribution of the Directories set out on
     Exhibit "A" shall be (1) continued and completed by Fronteer, (2) completed
     no later than the last day of the month immediately following the month of
     publication set out on Exhibit "A," and (3) continued and completed in the
                                         ---
     same manner as the last published editions of such Directories, including
     but not limited to, the number of Directories printed and distributed (as
     set out on Exhibit "A" or, where no number is set out, the number will be
     the same number of directories as printed and distributed during the
     immediately preceding calendar year), the distribution area, the pricing,
     the credit terms, the quality and size of print and paper, and the general
     production standards. Fronteer shall promptly pay all sales and production
     expenses for said editions of the Directories and for all prior editions of
     the Directories.

     Fronteer shall, at its cost, continue to provide all information, updates,
     data and telephone lines for audiotex service described in, related to or
     associated with any of the Directories for one year after the date each of
     the Directories is published, in the same manner as provided in the prior
     edition of each such directory. Fronteer will have the right to continue to
     use the audiotex equipment sold and transferred pursuant to this Agreement
     at no charge.

     If McLeod determines, in its sole discretion, that Fronteer has failed to
     complete all sales, production and distribution of the Directories and
     provision of all elements of audiotex service, as set out above, McLeod
     shall have, in addition to any other right it may have, the right to
     terminate this Agreement, declare this Agreement null and void and receive
     a full refund of any and all of the purchase price previously paid.

     Beginning on the date hereof, McLeod shall have the right to conduct an
     investigation of Fronteer and its telephone directory business as McLeod
     deems necessary. Fronteer shall cooperate fully with McLeod in such
     investigation.

9.   PRE-SALES
     ---------
     Fronteer may have made sales for editions of the McLeod Purchase
     Directories to be published by McLeod ("Pre-Sales"), but will make no more
     Pre-Sales after Closing. McLeod will have the right

                                                                          Page 5
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     to review and approve any such Pre-Sales, but such approval shall not be
     unreasonably withheld. All approved receivables, contracts, cash, trade
     agreements, finished copies and any other items held by Fronteer in
     connection with such approved Pre-Sales will be delivered on or before
     Closing, or as soon thereafter as is commercially possible. McLeod will pay
     Fronteer, in addition to the consideration set out in Section 4 above, a
     commission equal to 25% of the net cash amount of such approved Pre-Sales
     on or before the date of the last payment due under Section 4 above.

10.  REPRESENTATIONS AND WARRANTIES OF FRONTEER
     ------------------------------------------
     Fronteer hereby covenants, represents and warrants to the other parties
     that:

     Due Organization. Fronteer is a corporation duly organized, validly
     ----------------
     existing, and in good standing under the laws of the State of Colorado and
     has the power and authority, corporate and otherwise, to own its properties
     and conduct the business in which it is presently engaged.

     Authorization of Agreement. The execution and delivery of this Agreement
     --------------------------
     and consummation of the transactions contemplated by this Agreement have
     been duly and validly authorized by all necessary corporate action on the
     part of Fronteer and this Agreement constitutes a valid and legally binding
     obligation of Fronteer enforceable according to its terms. The execution
     and delivery of this Agreement, consummation of the transactions
     contemplated by this Agreement and compliance by Fronteer with all the
     provisions of this Agreement will not (i) violate any provision of the
     terms of any applicable law, rule, or regulation of any governmental body
     having jurisdiction; (ii)conflict with or result in a breach of any
     provision of Fronteer's Articles of Incorporation or Bylaws or constitute a
     default under any of the terms, conditions, or provisions of, or result in
     the breach of, or accelerate or permit the acceleration of the performance
     required by any note, bond, mortgage, indenture, license, agreement, or
     other instrument or obligation of any nature whatsoever to which Fronteer
     is a party; or (iii) violate any order, writ, injunction, decree, statute,
     rule, or regulation applicable to Fronteer or any of its property or
     assets.

     Payment of Taxes. Fronteer has filed all federal, state, and local tax
     ----------------
     returns required to be filed, and has made timely payment of all taxes
     shown by those returns to be due and payable. All filed tax returns are
     complete, true and correct in all material respects.

     No Adverse Conditions. There are no adverse conditions or circumstances
     ---------------------
     that may interfere with the use and enjoyment of or opportunity to operate
     the directory business of Fronteer to be purchased and sold pursuant to
     this Agreement.

     No Omissions or Misrepresentations. No representation, warranty or
     -----------------------------------
     statement of Fronteer contains any misrepresentation or misstates any
     material fact or omits to state any material fact necessary to make each
     representation or warranty or statement in this Agreement, or in any
     certificates or other instruments furnished or to be furnished to McLeod,
     accurate and not misleading in any material respect.

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     Investigation by McLeod. No investigation conducted by McLeod shall
     -----------------------
     affect the representations and warranties of Fronteer herein, and each such
     representation and warranty shall survive the execution and closing hereof.

     Title and liens. Fronteer on the date of delivery will own and deliver
     ---------------
     good and marketable title and all right, title and interest, free and clear
     of any and all liens or encumbrances, in and to all assets, rights and
     equipment to be sold and delivered pursuant to this Agreement.

     Consent of Creditors. Fronteer has obtained, or will obtain no later than
     --------------------
     February 28, 1997, any and all necessary consents with respect to the
     transactions contemplated by this Agreement, including and not limited to
     all necessary consents and/or necessary releases from all of Fronteer's
     lenders and said lenders have executed prior to Closing, or will execute no
     later than February 28, 1997, a release of any and all liens or security
     interests covering the Directories and the audiotex equipment being
     purchased pursuant to the terms of this Agreement, such consents are
     attached hereto as Exhibit "E." In the event the conditions set out in this
     section are not satisfied, or are violated in the sole opinion of McLeod,
     McLeod may declare this Agreement null and void and shall be entitled to an
     immediate return of all amounts paid by it pursuant to this Agreement.

     Publication Agreements. Fronteer is a party to agreements with
     ----------------------
     telecommunications carriers listed on Exhibit "F," attached hereto and
     incorporated herein, in connection with the McLeod Purchase Directories and
     copies of those agreements, or written explanation of the agreements if
     oral, are attached to Exhibit "F."

     Corporate Actions. Fronteer shall take such action and shall file all
     -----------------
     documents necessary to comply with all federal, state and local laws and
     regulations which may require shareholder or director consent or approval
     of this Agreement or the transactions contemplated or required by this
     Agreement.

     Sales Force. Fronteer presently employs ten individuals in a position
     -----------
     involving the sale of advertising in the Directories, which includes nine
     sales representatives and one sales manager and all individuals employed in
     a position involving the sale of advertising in the Directories are listed
     on Exhibit "G."

11.  REPRESENTATIONS AND WARRANTIES OF McLEOD
     ----------------------------------------
     McLeod covenants, represents and warrants to the other parties:

     Due Organization. McLeod is a corporation duly organized, validly existing,
     ----------------
     and in good standing under the laws of the State of Iowa and has the power
     and authority, corporate and otherwise, to own its properties and conduct
     the business in which it is presently engaged.

     Authorization of Agreement. The execution and delivery of this Agreement
     --------------------------
     and consummation of the transactions contemplated by this Agreement have
     been duly and validly authorized by all necessary corporate action on the
     part of McLeod and this Agreement constitutes a valid and legally binding
     obligation of McLeod enforceable according to its terms. The execution and

                                                                          page 7

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     delivery of this Agreement, consummation of the transactions contemplated
     by this Agreement and compliance by McLeod with all the provisions of this
     Agreement will not (i) violate any provision of the terms of any applicable
     law, rule, or regulation of any governmental body having jurisdiction; (ii)
     conflict with or result in a breach of any provision of McLeod's Articles
     of Incorporation or Bylaws or constitute a default under any of the terms,
     conditions, or provisions of, or result in the breach of, or accelerate or
     permit the acceleration of the performance required by any note, bond,
     mortgage, indenture, license, agreement, or other instrument or obligation
     of any nature whatsoever to which McLeod is a party; or (iii) violate any
     order, writ, injunction, decree, statute, rule, or regulation applicable to
     McLeod or any of its property or assets.

12.  REPRESENTATIONS AND WARRANTIES OF CLASSIFIED
     --------------------------------------------
     Classified covenants, represents and warrants to the other parties that:

     Due Organization. Classified is a corporation duly organized, validly
     ----------------
     existing, and in good standing under the laws of the State of North Dakota
     and has the power and authority, corporate and otherwise, to own its
     properties and conduct the business in which it is presently engaged.

     Authorization of Agreement. The execution and delivery of this Agreement
     --------------------------
     and consummation of the transactions contemplated by this Agreement have
     been duly and validly authorized by all necessary corporate action on the
     part of Classified and this Agreement constitutes a valid and legally
     binding obligation of Classified enforceable according to its terms. The
     execution and delivery of this Agreement, consummation of the transactions
     contemplated by this Agreement and compliance by Classified with all the
     provisions of this Agreement will not (i) violate any provision of the
     terms of any applicable law, rule, or regulation of any governmental body
     having jurisdiction; (ii) conflict with or result in a breach of any
     provision of Classified's Articles of Incorporation or Bylaws or constitute
     a default under any of the terms, conditions, or provisions of, or result
     in the breach of, or accelerate or permit the acceleration of the
     performance required by any note, bond, mortgage, indenture, license,
     agreement, or other instrument or obligation of any nature whatsoever to
     which Classified is a party; or (iii) violate any order, writ, injunction,
     decree, statute, rule, or regulation applicable to Classified or any of its
     property or assets.

     Scope of Directories. Classified will not expand the white page coverage,
     --------------------
     yellow page coverage or distribution area of the Souris River, Southeast
     North Dakota or Durum Triangle directories beyond that of the last edition
     of the Souris River, Southeast North Dakota or Durum Triangle directories
     published by Fronteer, except, if any telecommunications carrier which is a
     party to a written, valid, binding and enforceable Publication Agreement
     with Classified as of the date of this Agreement purchases additional
     exchanges, and a copy of the Publication Agreement with such carrier has
     been delivered to McLeod on or before February 28, 1997, then, to the
     limited extent of such purchase, the listings associated with the exchanges
     so purchases may be added to the white pages and yellow pages of the Souris
     River, Southeast North Dakota or Durum Triangle directory and the
     subscribers associated with the exchanges so purchased may be added to the
     distribution area of the same directory.

                                                                          page 8

<PAGE>

     Employees of other parties. Classified will not hire, interview, solicit,
     --------------------------
     or attempt to interview or hire any individual employed in any capacity,
     now or hereafter, by Fronteer or McLeod.

13.  ASSIGNMENT OF AGREEMENT AND RIGHTS
     ----------------------------------
     Fronteer will deliver an assignment to McLeod, in the form attached as
     Exhibit "H," of the Publication Agreements with telecommunications carriers
     described in Section 10 above and listed on Exhibit "F," accompanied by
     fully executed consents to the assignment, in the form attached as Exhibit
     "I," executed by no less than five of those seven telecommunications
     carriers, including specifically those associated with the Bismarck/Mandan
     Metro directory, no later than February 28, 1997. Fronteer will assign any
     and all rights and privileges it may have in any non-compete agreements it
     now has to the fullest extent such agreements apply to the distribution
     area of any directories published by McLeod, including the McLeod Purchase
     Directories. Fronteer will assign all its right, title and interest in the
     intellectual property, proprietary information and trade secrets described
     in Section 2 to McLeod at Closing, and McLeod hereby grants a limited
     license to Fronteer to use such property and information to complete the
     publication of the Directories in accordance with this Agreement and the
     collection of receives generated by such publication. In the event the
     conditions set out in this section are not satisfied, or are violated in
     the sole opinion of McLeod, McLeod may declare this Agreement null and
     void and shall be entitled to an immediate return of all amounts paid by it
     pursuant to this Agreement.

14.  EMPLOYEES AND INDEPENDENT CONTRACTORS
     -------------------------------------
     McLeod has the right to interview and hire all of the Fronteer sales force
     identified on Exhibit "G" and plans and desires to do so. Fronteer will
     assist McLeod in said interviewing and hiring. Payment of any amount under
     this Agreement is contingent on McLeod hiring, no later than February 28,
     1997, no less than seven of nine sales representatives and the sales
     manager listed on Exhibit "G," under arrangements for the same to begin
     employment with McLeod no later than seven days after the close of sales by
     Fronteer in the Bismarck/Mandan Metro directory. McLeod will not, as a term
     or condition of this Agreement, assume any of Fronteer's obligations with
     respect to employment contracts or independent contractor contracts, if
     any, and is not doing so by this Agreement. Classified will not, as a term
     and condition of this Agreement, interview or hire any employees of
     Fronteer. In the event the conditions set out in this section are not
     satisfied, or are violated in the sole opinion of McLeod, McLeod may
     declare this Agreement null and void and shall be entitled to an immediate
     return of all amounts paid by it pursuant to this Agreement.

15.  PUBLIC ANNOUNCEMENT
     -------------------
     Except to the extent disclosure, filing, reporting or announcement of this
     Agreement is required by law, including any rules or regulations of any
     applicable governmental, regulatory or stock exchange agency or authority,
     (i) no party shall make any public announcement of this Agreement or the
     transactions contemplated hereby prior to March 1, 1997, and (ii) after
     that date public announcement may be made only after notification the
     content of such announcement has been approved by the other parties hereto,
     which approval will not be unreasonably withheld.

                                                                          page 9
<PAGE>

16.  NON-COMPETE AGREEMENTS
     ----------------------

     In favor of McLeod. In consideration of McLeod's purchase of the McLeod
     ------------------
     Purchase Directories, McLeod's payment of cash consideration, McLeod's
     assignment of rights in and to the Souris River, Southeast North Dakota and
     possibly Durum Triangle directories and McLeod's execution of a Covenant
     not to Compete and Confidentiality Agreement as described below, Scott,
     Greff, Dressler and Gowin each execute, jointly with execution by
     Classified, a Covenant Not to Compete and Confidentiality Agreement at
     Closing substantially in the form attached hereto as Exhibit "J," and
     Fronteer and all other Directors, Officers and Shareholders listed on
     Exhibit "D" will each execute a Covenant Not to Compete and Confidentiality
     Agreement substantially in the form attached hereto as Exhibit "K."
     Fronteer will assign to McLeod, in the form attached as Exhibit "H," any
     and all non-competition agreements or covenants binding upon any of
     Fronteer's sales representatives or sales managers to the fullest extent
     such non-competition agreements apply to the current distribution areas of
     any directories published by McLeod, including the directories purchased by
     McLeod pursuant to this Agreement.

     In Favor of Classified. In consideration of Classified's possible purchase
     ----------------------
     of the Durum Triangle directory and execution of a Covenant not to Compete
     and Confidentiality Agreement, McLeod will execute at Closing a Covenant
     not to Compete and Confidentiality Agreement in favor of Classified
     substantially in the form attached as Exhibit "L."

17.  INDEMNIFICATION OF McLEOD
     -------------------------
     Fronteer hereby indemnifies and saves McLeod harmless from and against any
     and all costs, liability, or expenses, including reasonable attorneys'
     fees, arising out of (i) any breach of warranty, covenant, agreement, or
     representation made by Fronteer; (ii) any nonfulfillment of any agreement,
     conditions or covenants of Fronteer under this Agreement or any
     misrepresentation in or omission from this Agreement or from any
     certificates or other instrument furnished or to be furnished to McLeod;
     and (iii) all actions, suits, proceedings, demands, assessments, judgments,
     costs, and expenses incident to any of the foregoing.

     Classified, Scott, Greff, Dressler and Gowin, jointly and severally, hereby
     indemnify and hold McLeod harmless from and against any and all costs,
     liability, or expenses, including reasonable attorneys' fees, arising out
     of (i) any breach of warranty, covenant, agreement, or representation made
     by any of them; (ii) any nonfulfillment of any condition or covenant under
     this Agreement, or any misrepresentation in or omission from this
     Agreement, or any certificates or other instrument furnished or to be
     furnished to McLeod, by any of them; (iii) any cause of action or expense
     directly or indirectly related to Classified's sale, publication or
     distribution of directories published by Classified; and (iv) all actions,
     suits, proceedings, demands, assessments, judgments, costs, and expenses
     incident to any of the foregoing.

18.  INDEMNIFICATION OF FRONTEER
     ---------------------------
     McLeod hereby indemnifies and saves Fronteer harmless from and against any
     and all costs, liability, or expenses, including reasonable attorneys'
     fees, arising out of (i) any breach of warranty, covenant, agreement, or
     representation made by McLeod; (ii) any nonfulfillment of any agreement,
     condition or covenant of McLeod under this Agreement or any
     misrepresentation in or
                                                                         page 10
<PAGE>

     omission from this Agreement or from any certificates or other instrument
     furnished or to be furnished to Fronteer; and (iii) all actions, suits,
     proceedings, demands, assessments, judgments, costs, and expenses incident
     to any of the foregoing.

     Classified, Scott, Greff, Dressler and Gowin, jointly and severally, hereby
     indemnify and hold Fronteer harmless from and against any and all costs,
     liability, or expenses, including reasonable attorneys' fees, arising out
     of (i) any breach of warranty, covenant, agreement, or representation made
     by any of them; (ii) any nonfulfillment of any condition or covenant under
     this Agreement, or any misrepresentation in or omission from this
     Agreement, or any certificates or other instrument furnished or to be
     furnished to Fronteer, by any of them; (iii) any cause of action or expense
     directly or indirectly related to Classified's sale, publication or
     distribution of directories published by Classified; and (iv) all actions,
     suits, proceedings, demands, assessments, judgments, costs, and expenses
     incident to any of the foregoing.

19.  INDEMNIFICATION OF CLASSIFIED
     -----------------------------
     McLeod hereby indemnifies and saves Classified harmless from and against
     any and all costs, liability, or expenses, including reasonable attorneys'
     fees, arising out of (i) any breach of warranty, covenant, agreement, or
     representation made by McLeod; (ii) any nonfulfillment of any agreement,
     condition or covenant of McLeod under this Agreement or any
     misrepresentation in or omission from this Agreement or from any
     certificates or other instrument furnished or to be furnished to
     Classified; and (iii) all actions, suits, proceedings, demands,
     assessments, judgments, costs, and expenses incident to any of the
     foregoing.

20.  CONFIDENTIAL INFORMATION
     ------------------------

     Definition. For purposes of this Section, "Confidential Information" means
     ----------
     any information or compilation of information not generally known, which is
     proprietary to the business, and includes, without limitation, trade
     secrets, inventions, and information pertaining to development, marketing,
     sales, accounting, and licensing of the business products and services,
     customer information contained in customer records, working papers or
     correspondence files, all financial information contained in federal and
     state tax returns, and the financial terms of this transaction. Information
     shall be treated as Confidential Information irrespective of its source and
     all information that is identified by Fronteer, McLeod or Classified as
     being "confidential", "trade secret", or is identified or marked with any
     similar reference, or any information that Fronteer, McLeod or Classified
     should know is being treated by Fronteer, McLeod or Classified as
     confidential, shall be presumed to be Confidential Information.

     Covenants by Parties. McLeod, Classified, Scott, Greff, Dressler, Gowin and
     --------------------
     Fronteer agree and covenant with respect to all Confidential Information
     received or learned by any of them as follows:

               A.  that they will treat as confidential all Confidential
     Information made available to them or any of their employees, agents or
     representatives;

                                                                         page 11
<PAGE>

          B.  that they will maintain the same in a secure place and limit
     access to the Confidential Information to those employees, agents and
     representatives to whom it is necessary to disclose the Confidential
     Information in furtherance of the transactions contemplated by this
     Agreement;

          C.  that they and their employees, agents and representatives will not
     copy any Confidential Information (unless authorized), disclose any
     Confidential Information to any unauthorized party, or use any Confidential
     Information for any purpose other than the publication of the directories
     purchased pursuant to this Agreement, including competition with the other
     party or solicitation of the other party's customers; and

          D. that each party will assume liability for any breach of this
     paragraph by him or it, or any of its employees, agents or representatives.

21.  PRODUCTION SERVICES
     -------------------
     Following the Closing, McLeod will negotiate with Marlow Lindblom at
     Fronteer to finalize an white page production agreement between McLeod and
     Fronteer for Fronteer to produce the white page listings of the
     telecommunications carriers who have executed consents pursuant to Section
     13 for a period of three years. The agreement will include the provisions
     that only Dennis W. Olson or Marlow Lindblom will have direct contact with
     the telecommunications carriers, that the agreement is non-assignable and
     non-delegable without prior written consent of all parties to that
     agreement, and that the agreement can be canceled by McLeod in its sole
     discretion in the event of a change in control in Fronteer to anyone other
     than a group including Dennis W. Olson or Marlow Lindlom. Fronteer may also
     provide production services for Classified for production of the Souris
     River, Southeast North Dakota and possibly Durum Triangle directories to be
     published by Classified, limited as described in Section 12. Except as
     provided in this Section 20, Fronteer will no longer publish the
     Directories.

22.  INVESTIGATION CONDITION
     -----------------------
     McLeod's obligations hereunder are expressly contingent upon McLeod's
     successful completion of its investigation of Fronteer's telephone
     directory business, as set out in Section 8 above.

23.  MISCELLANEOUS
     -------------

     Broker or Finder. The parties represent that no person is entitled to any
     ----------------
     brokerage commission, finder's fee, or any other like payment in connection
     with any transaction contemplated by this Agreement by reason of the action
     of any party to this Agreement.

     Severability. If any provision of this Agreement is held for any reason to
     ------------
     be unenforceable by a court of competent jurisdiction, the remainder of
     this Agreement shall, nevertheless, remain in full force and effect.

<PAGE>

Applicable Law. This Agreement shall be construed in accordance with the laws of
--------------
the State of Iowa. Venue for any action to enforce this Agreement shall be in
Iowa or in North Dakota, at the option of the party filing such action.

Notices. Any notices or other communications required or permitted under this
-------
Agreement shall be sufficiently given if sent by certified mail, return receipt
requested, postage prepaid, addressed as follows:

McLeod:             McLeodUSA Publishing Company
                    P.O. Box 3162
                    Cedar Rapis, IA 52406-3162
                    Attn: Arthur L. Christoffersen, President

Fronteer:           Fronteer Financial Holdings, Ltd.
                    P.O. Box 5542
                    Bismarck, ND 58502
                    Attn: Dennis W. Olson, President

Classified:         Classified Directories, Inc.
                    1500 East Front Street
                    Bismarck, ND 58504
                    Attn: Larry Scott

Scott               Larry A. Scott
                    532 Macom Drive
                    Bismarck, ND 58504

Greff               James Greff
                    3039 Greenwood Drive
                    Bismarck, ND 58501

Gowin               Randall L. Gowin
                    1932 Adams Lane
                    Bismarck, ND 58501

Dressler            Edwin Dressler
                    610 Easy Street
                    Bismarck, ND 58504


Captions. The captions and Section numbers in this Agreement are for convenience
--------
of reference only and shall not limit or otherwise affect the meaning hereof

Signatures. The parties hereto expressly consent to the use of facsimile
----------
signatures and agree that such facsimile signatures shall be binding as
originals. The parties hereto expressly consent to the

                                                                         page 13
<PAGE>

use of multiple counterparts each of which shall constitute and original and all
of which together will constitute one and the same instrument.

Survival. Each and every provision, representation and warranty of this
--------
Agreement shall survive the execution and closing hereof and shall remain
binding on the parties hereto until all performance called for hereunder is
complete.

Binding Effect. This Agreement and all of the provisions hereof shall be binding
--------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party hereto may make any
assignment of this Agreement or any interest herein without the prior written
consent of the other parties hereto. Assignments without such consent shall be
void.


Executed effective the date first written above.


McLeodUSA Publishing Company                   Fronteer Directory Company, Ltd.

By:/s/ Arthur L. Christoffersen                By:/s/ Dennis W. Olson
   -----------------------------                  -----------------------------
   Arthur L. Christoffersen, President            Denis W. Olson, President

                                                                         page 14
<PAGE>

Executed the date first above written.

/s/ Dennis W. Olson                           /s/ Roland Haux
----------------------                        -------------------
Dennis W. Olson                               Roland Haux


/s/ Marlow E. Lindblom                        /s/ James B. Qualls
----------------------                        -------------------
Marlow E. Lindblom                            James B. Qualls


/s/ Calvin Helgeson                           /s/ Lance L. Olson
----------------------                        -------------------
Calvin Helgeson                               Lance L. Olson

                                                                         page 16
<PAGE>

Executed the date first above written.


                                                       /s/ Edwin Dressler
                                                       ---------------------
Classified Directories, Inc.                               Edwin Dressler



By:/s/ Larry Scott                                     /s/ Larry A Scott
   -----------------------                             --------------------
   Larry Scott, President                              Larry A. Scott



/s/ James Greff                                        /s/ Randall L. Gowin
--------------------------                             --------------------
James Greff                                            Randall L. Gowin

                                                                         page 16
<PAGE>

                                  EXHIBIT "A"
                                  -----------

<TABLE>
<CAPTION>
                                            MINIMUM      NET CASH       BEING
                           DISTRIBUTION     NUMBER       REVENUE      PURCHASED
DIRECTORY                      DATE         DISTRIBUTED  (IN 000'S)      BY
---------                  ------------     -----------  ----------   ---------
<S>                        <C>              <C>          <C>          <C>
1. Fargo                   December,1996    177,000      1,240        McLeod

2. Badlands (Dickinson)    January, 1997     37,000        380        McLeod

3. Jamestown               February, 1997    18,000        127        McLeod

4. Valley City             March, 1997       11,000         69        McLeod

5. Bismarck/Mandan Metro   June, 1997       140,000      1,474        McLeod

6. Williston Basin         July, 1997        66,000        410        McLeod

--------------------------------------------------------------------------------

 Durum Triangle            April, 1997       34,000        270       Classified

--------------------------------------------------------------------------------

 Souris River              October,1996     110,000        N/A       N/A

 Southeast ND              September, 1996   30,000        N/A       N/A
</TABLE>

                                                                         page 17
<PAGE>

                                  EXHIBIT "B"
                                  -----------

                              AUDIOTEX EQUIPMENT
                              ------------------

<TABLE>
<CAPTION>
     Description And Serial Number                Directory     Current location
     -----------------------------                ---------     ----------------
<S>                                             <C>             <C>
1.   BVS 2000 Chassis 48 hr/16 Lines            Bismarck Metro  Bismarck
       S#B77489                                                 216 N 23rd ST
     Okidata 320 S# 30701023881                                 Bismarck, ND
     1.2 Meter Satellite Dish and
       Receiver     WY -185 S#0J013600215

2.    None.

3.    None.

4.    None.

5.   BVS 2000 Chassis 48 hr/16 Lines            Fargo Metro     1323 23 St South
       S#                                                       Suite E
     Okidata 320    S#                                          Fargo, ND
     1.2 Meter Satellite Dish and
       Receiver
     WY - 185 S#

6.    None.

--------------------------------------------------------------------------------

1.    None
</TABLE>

                                                                         page 18
<PAGE>

                                  EXHIBIT "C"
                                  -----------

                                 BILL OF SALE
                                 ------------

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned, FRONTEER FINANCIAL
HOLDINGS, LTD., a Colorado corporation ("Fronteer"), for and in consideration of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt of
which is hereby acknowledged, does hereby bargain, sell, grant, convey, assign
and transfer to MCLEODUSA PUBLISHING COMPANY, an Iowa corporation ("McLeod"),
its successors and assigns forever, all of the Fronteer's right, title and
interest in and to the property described on Exhibit "A," printed on the back of
this Bill of Sale and made a part hereof for all purposes.

     Fronteer covenants and agrees that it is the lawful owner of the above
described property, free and clear of all liens, claims, charges or other
encumbrances, and that Fronteer will warrant and defend title to said property
against any and every person claiming rights therein.

     Fronteer further covenants and agrees that if it shall be necessary or
desirable at any time after the date hereof to do, execute, acknowledge or
deliver any further acts, deeds, assignments, transfers, conveyances, powers of
attorney, or other assurances, to bargain, sell, grant, convey, transfer or
assign to McleodUSA the property transferred hereby, McLeod shall be empowered
as Fronteer's attorney-in-fact to do, execute, acknowledge, and deliver any and
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, or other assurances for and on behalf of Fronteer. Fronteer
acknowledges that the foregoing power is coupled with an interest and shall be
irrevocable.

     Dated: January 27, 1997.

                                          FRONTEER FINANCIAL HOLDINGS, LTD.


                                          By:___________________________________
                                              Dennis W. Olson, President


STATE OF NORTH DAKOTA)
                     )ss:
COUNTY OF____________)

     On this ____th day of January, 1997, before me, the undersigned, a Notary
Public in and for the State of North Dokota, personally appeared Dennis W.
Olson, to me personally known, who being by me duly sworn, did say that he is
the president, of the corporation executing the within and foregoing instrument,
that no seal has been procured by the corporation; that said instrument was
signed on behalf of the corporation by authority of its Board of Directors; and
that Dennis W. Olson as such officer acknowledged the execution of the foregoing
instrument to be voluntary act and deed of the corporation, by it and by him
voluntarily executed.


                                     _____________________________
                                          Notary Public

                                                                         page 19
<PAGE>

                                  EXHIBIT "D"
                                  -----------

      ALLOCATION OF CONSIDERATION TO DIRECTORS, OFFICERS AND SHAREHOLDERS
      -------------------------------------------------------------------
  AGREEING TO EXECUTE COVENANTS NOT TO COMPETE AND CONFIDENTIALITY AGREEMENTS
  ---------------------------------------------------------------------------


     Name                        Percentage of payment
     ----                        ---------------------

Dennis W. Olson                          31.25%

Marlow Lindblom                          21.25%

Roland Haux                              17.50%

Larry Scott                              10.00%

Lance Olson                               6.25%

James B. Qualls                           6.25%

Edwin Dressler                            2.50%

Randall Gowin                             2.50%

Calvin "Kelly" Helgeson                   2.50%

                                                                         page 20

<PAGE>

                                  EXHIBIT "E"
                                  -----------

                            CONSENTS FROM CREDITORS
                            -----------------------



               Bismark National Bank
               322 East Main
               Bismarck, ND 58531



               The First National Bank
               Biwabik Branch
               P.O. Box 209
               Biwabik, MN 55708



                                                                         page 21
<PAGE>

                                  EXHIBIT "F"
                                  ----------

                  AGREEMENTS WITH TELECOMMUNICATIONS CARRIERS
                  -------------------------------------------
        (COPIES, OR EXPLANATIONS IF ORAL, ARE ATTACHED TO THIS EXHIBIT)


1. BEK Communications Cooperative

2. West River Telecommunications Cooperative

3. Midstate Telephone Co.

4. Northwest Communications Cooperative

5. Noonan Farmers Telephone Co.

6. Reservation Telephone Cooperative

7. Consolidated Telephone Cooperative

8.

9.

10.

                                                                         page 22