<PAGE>

                                                                Exhibit 10.91

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

     THIS AGREEMENT is made and entered into this 27th day of February, between
McLeodUSA Publishing Company, an Iowa corporation ("McLeod"), and Indiana
Directories, Inc., a Michigan Corporation ("IDI"), John Morgan ("Morgan"), Hank
Meijer ("Meijer"), Jack Hendricks ("Hendricks"), Brad Nelson ("Nelson") and
Talking Directories, Inc., a Michigan corporation ("TDI").

                                   RECITALS
                                   --------

     McLeod desires to purchase certain telephone directory business of IDI;
and,

     IDI desires to sell certain of its telephone directory business to McLeod
under the terms and conditions set out below.

     Morgan, Meijer, Hendricks, Nelson and TDI have an interest in concluding
the transactions contemplated by this Agreement and wish to facilitate this
Agreement and its contemplated transactions.

                                   AGREEMENT
                                   ---------

     In consideration of the terms, conditions, promises and mutual covenants in
this Agreement, McLeod, IDI, Morgan, Meijer, Hendricks, Nelson and TDI agree as
follows:

1.   DIRECTORIES AND OTHER ASSETS TO BE PURCHASED
     --------------------------------------------
     1.1. IDI hereby sells and McLeod hereby purchases all of IDI's telephone
     directories shown on the list of directories attached hereto as Exhibit "A"
     and incorporated herein by this reference (the "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
     IDI and all customer lists, contracts and catalogs and marketing materials
     used by IDI in connection with the Directories. This transaction includes
     any patents, trademarks, licenses, copyrights, directory names, brand
     names, trade names, trade dress, propriety information and trade

                                       1
<PAGE>

     secrets, whether registered or subject to being registered, owned by IDI
     and used in connection with the Directories, including specifically and not
     by way of limitation the corporate and trade names "Info Indiana," "INFO
     INDIANA," "Indiana Directories, Inc.," and "U.S. Directories, Inc.," and to
     the extent any such property or rights are not owned by IDI, IDI will
     assign its interest or right to use said property throughout the geographic
     distribution area of the Directories to McLeod. IDI and McLeod will execute
     any federal, state, local and/or other forms necessary to carry out the
     transactions described in this Section.

     1.2. The above described items relating to the Directories on Exhibit "A"
     delivered to a printer for printing before Closing (as described in
     Section 4 below) be delivered to McLeod on or before Closing. The above
     described items relating to the Directories to be delivered to a printer
     for printing after Closing shall be delivered to McLeod on the date each of
     those Directories is delivered to a printer for printing. IDI shall deliver
     to McLeod fifty (50) copies of each of the Directories within ten (10) days
     after each such Directory is published. "Publish" and "publication" as used
     throughout this Agreement means the sale of advertising, acquisition of
     material and information, production of directories and primary
                                                         ---
     distribution of directories.

     1.3. The purchase includes the equipment, including two audiotex equipment
     systems, and furniture identified on the List of Equipment and Furniture
     attached hereto as Exhibit "B" and incorporated herein by this reference.
     IDI agrees to sell and McLeod agrees to buy the equipment and furniture
     listed on Exhibit "B," pursuant to the terms of this Agreement and IDI will
     deliver the equipment and furniture by providing a Bill of Sale, in the
     form attached as Exhibit "C," at Closing and providing possession on April
     1, 1997.

     1.4. This transaction does not include any receivables of IDI, and McLeod
     is not assuming any liabilities of IDI, except the obligations under the
     leases specifically addressed in Section 12 below. IDI is entitled to all
     receivables in connection with all editions of the Directories previously
     published by IDI or to be published IDI with the Publication Dates shown on
     Exhibit "A." If a receivable to which IDI is entitled is not collected by
     IDI, through no fault, error or negligence on the part of IDI or reasonable
     customer dissatisfaction, McLeod

                                       2
<PAGE>

     agrees not to permit the advertiser that generated such unpaid receivable
     to advertise in the next edition of any of the Directories, to be published
     by McLeod, provided IDI provides McLeod written notice of the name,
     address, telephone number of the advertiser and the amount due no later
     than 30 days prior to the Local Market Close date for such Directory, which
     date will be provided by McLeod upon request. McLeod is entitled to all
     receivables generated from the next editions of the Directors published
     after the edition described on Exhibit "A."


2.   CONSIDERATION
     -------------
           The consideration for this Agreement is estimated to be
     $10,660,000.00 (which is 100% of the estimated Net Cash Revenue (as defined
     below) of the Directories as shown on Exhibit "A," plus $150,000.00 for
     equipment and furniture,) subject to any adjustments pursuant to Section 3
     below. The consideration for this Agreement shall be allocated to the
     various assets and the Covenant not to Compete and Confidentiality
     Agreements described in Section 11 below as set forth on the Purchase Price
     Allocation Schedule ("Allocations") attached as Exhibit "D" and
     incorporated herein by this reference. IDI and McLeod shall file their
     respective tax returns and required Internal Revenue Service forms in
     accordance with the Allocations and shall not take any position
     inconsistent with the Allocations. If an examination of the income tax
     returns of IDI or McLeod by the Internal Revenue Service ("Service")
     results in a different allocation of the consideration under Section 1060
     of the Internal Revenue Code of 1986, as amended, however, IDI and McLeod
     shall amend their federal, state and local income tax returns to conform to
     the allocation determined by the Service. IDI and McLeod shall execute any
     federal, state, local and/or other forms required to be filed with respect
     to the Allocations. The consideration, subject to full and complete
     satisfaction of all conditions set out in this Agreement, will be paid as
     follows:


     2.1.  $4,880,000.00 to IDI, $30,000.00 to TDI, $30,000.00 to Morgan,
     $30,000.00 to Meijer, $15,000.00 to Hendricks and $15,000.00 to Nelson, at
     Closing;



                                       3
<PAGE>

     2.2.  $1,000,000.00 into escrow upon execution of this Agreement pursuant
     to the terms of the Escrow Agreement attached as Exhibit "E," and
     incorporated herein by this reference, which will thereafter be paid out
     and applied to the final payment due hereunder pursuant to said Escrow
     Agreement;

     2.3.  $1,500,000.00 to IDI ten (10) days after IDI certifies to McLeod that
     publication of those Directories listed on Exhibit "A" with a Publication
     Date of February, 1997 has been completed in accordance with Section 5
     below;

     2.4.  $500,000.00 to IDI ten (10) days after IDI certifies to McLeod that
     publication of those Directories listed on Exhibit "A" with a Publication
     Date of March, 1997 has been completed in accordance with Section 5 below;

     2.5.  $2,000,000.00 to IDI ten (10) days after IDI certifies to McLeod that
     publication of those Directories listed on Exhibit "A" with a Publication
     Date of April, 1997 has been completed in accordance with Section 5 below;

     2.6.  all remaining unpaid consideration to IDI after publication of all
     Directories has been completed in accordance with Section 5 below, the
     total Net Cash Revenue for all of the Directories combined has been
     determined pursuant to Section 3 below and all terms and conditions of the
     Escrow Agreement have been satisfied, with the final payment adjusted
     pursuant to the provisions of Section 3 below.

3.   NET CASH REVENUE REQUIREMENT
     ----------------------------
           IDI represents and warrants that the total Net Cash Revenue of the
     last edition of each of the Directories shown on Exhibit "A" published by
     IDI (or to be published by IDI, as the case may be) shall be as shown as
     estimated Net Cash Revenue on Exhibit "A." "Net Cash Revenue" shall include
     all contracted for gross revenue in the form of cash paid or accounts
     receivable, including national revenue, but shall exclude cancellations,
     promotional

                                       4
<PAGE>

    discounts, payment plan discounts, cash discounts, and any revenue traded
    for value other than cash or accounts receivables. If the total Net Cash
    Revenue from all the Directories combined is more or less than
    $10,510,000.00, the consideration paid by McLeod, as set out in Section 2
    above, shall be increased or reduced accordingly by one dollar for each one
    dollar the total Net Cash Revenue from the Directories is above or below
    $10,510,000.00. McLeod and IDI shall determine the total net cash revenue
    for the Directories on or before the due date for the final payment set out
    in Section 2.6 above.

4.  CLOSING
    -------

          Closing shall take place at McLeod's offices, 201 Third Avenue S.E.,
    Suite 500, Cedar Rapids, Iowa, forty-eight (48) hours after complete
    satisfaction of the conditions and contingencies described in Sections 7 and
    10 below, but in no event prior to 11:00 a.m., on March 18, 1997 or later
    than 2:00 p.m., on April 1, 1997, or at such other time, date, and place as
    may be agreed by the parties ("Closing").

5.  CONDUCT OF IDI
    --------------

    5.1. Publication of the editions of the Directories set out on Exhibit "A"
    shall be (1) continued and completed by IDI in accordance with past
    practices, (2) completed no later than the fifteenth day of the month
    immediately following the Publication Date 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"), the distribution area,
    the pricing, the credit terms, the quality and size of print and paper, and
    the past general production standards and practices, except as specifically
    noted, described and agreed on Exhibit "F."  IDI shall promptly pay all
    sales and production expenses for editions of the Directories with the
    Publication Dates as shown on Exhibit "A" and for all prior editions of the
    Directories. The above requirements notwithstanding, [a] IDI will have the
    Directories with a Publication Date of April, 1997 delivered to a printer
    for printing no later than April 1, 1997, and [b] IDI will make every effort
    to have the Directories with a Publication Date of May, 1997

                                       5
<PAGE>

delivered to a printer for printing no later than April 1, 1997. If production
work remains on April 1, 1997, however, then McLeod will finish the remaining
production work at the LaPorte, Indiana facilities now occupied by IDI and IDI
will reimburse McLeod $60.00 per page for each page of said remaining production
work finished by McLeod, and IDI will distribute the directories upon
conclusion of said remaining production work. Performance by IDI under this
section shall be excused in the event of strike, interruption of mail or common
carrier service, fire, riot, disaster, act of God or other cause beyond the
reasonable and ordinary control of IDI.

5.2. IDI 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. IDI will have the right to continue to use the audiotex equipment
sold and transferred pursuant to this Agreement at no charge and McLeod, as
owner of said equipment, will service and maintain said equipment beginning on
April 1, 1997.

5.3. If McLeod determines that IDI has failed to complete publication of the
Directories and provision of all elements of audiotex service, as described in
Section 5.2 set out above, McLeod shall have, in addition to any other right it
may have, the right to notify IDI of such failure and request a full refund of
any and all amounts paid for each of the Directories with which such failure is
associated. Upon receipt of such notice IDI will have twenty (20) days to
correct such failure or to offer to compensate McLeod for such failure. If such
failure remains uncorrected after twenty (20) days and McLeod does not accept
any reasonable offer of compensation from IDI, then McLeod shall be entitled to
receive a refund of any and all amounts paid for each of the Directories with
which said remaining failure is associated.

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

                                       6
<PAGE>

6.   PRE-SALES
     ---------

          IDI has made sales for editions of the Directories to be published by
     McLeod ("Pre-Sales"). McLeod will have the right to review and approve any
     such Pre-Sales, but such approval shall not be unreasonably withheld. All
     approved receivables, contracts, cash, trade agreements, artwork, finished
     copies and any other items held by IDI in connection with such approved
     Pre-Sales will be delivered to McLeod on or before Closing, or as soon
     thereafter as is commercially possible and McLeod will publish such Pre-
     Sales. McLeod will pay IDI, in addition to the consideration set out in
     Section 2 above, a commission equal to 15% of the Net Cash Revenue from
     such approved Pre-Sales on or before the date of the last payment due under
     Section 2 above.


7.   REPRESENTATIONS AND WARRANTIES OF IDI
     -------------------------------------

           IDI hereby covenants, represents and warrants to McLeod that:

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

     7.2.  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 IDI and this Agreement constitutes a valid and
     legally binding obligation of IDI enforceable according to its terms. The
     execution and delivery of this Agreement, consummation of the transactions
     contemplated by this Agreement and compliance by IDI 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 IDI'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

                                       7
<PAGE>

which IDI is a party; or, (iii) violate any order, writ, injunction, or decree,
statute, rule or regulation applicable to IDI or any of its property or assets.

7.3.  Payment of Taxes. IDI 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, or has timely filed the necessary documents to
contest the amount of tax due. All filed tax returns are complete, true and
correct in all material respects.

7.4.  No Adverse Conditions. To the best of the knowledge of IDI and its
      ----------------------
officers, directors and shareholders, there are no adverse conditions or
circumstances that may interfere with Mcleod's use and enjoyment of or
opportunity to operate the directory business of IDI to be purchased by McLeod
pursuant to this Agreement.

7.5.  No Omissions or Misrepresentations. To the best of the knowledge of IDI
      -----------------------------------
and its officers, directors and shareholders, no representation, warranty, or
statement of IDI 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.

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

7.7. Consents. IDI has obtained any and all necessary consents with respect to
     ---------
the transaction contemplated by this Agreement.

7.8. Title and liens. IDI on the date of Closing will own and deliver good and
     ----------------
marketable fee title and all right, title and interest, free and clear of any
and all liens or encumbrances, or other interests, in and to all assets, rights,
property, equipment and furniture to be sold and delivered pursuant to this
Agreement.

7.9. Consent of Creditors. IDI has obtained, or will obtain before Closing, all
     ---------------------
necessary consents and releases with respect to the transactions contemplated by
this Agreement from IDI's lenders, said lenders have executed and recorded,
prior to Closing, releases of any and all liens or security interests covering
the Directories and other assets to being purchased by





                                       8


<PAGE>

     McLeod pursuant to this Agreement, and copies of such consents and releases
     will be delivered by IDI to McLeod on or before Closing. A List of Lenders
     prepared by IDI identifying all lenders from whom consents and releases are
     needed is attached as Exhibit "G" and incorporated herein by this
     reference. In the event the conditions set out in this section are not
     satisfied, or are violated, McLeod will so notify IDI. Closing will be
     postponed for a period of not more than fourteen (14) days and IDI will
     satisfy the condition or correct the violation prior to the postponed
     Closing. If the conditions remain unsatisfied or the violations remain
     uncorrected for fourteen days after notice to IDI, 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.

     7.10. Employees. IDI will deliver a list of all current employees of IDI,
           ---------
     and each employees job title or position and date of initial hiring by IDI,
     to McLeod on the date of Public Announcement pursuant to Section 9 below.

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

8.   REPRESENTATIONS AND WARRANTIES OF McLEOD
     ----------------------------------------
     McLeod covenants, represents and warrants to IDI:

     8.1. 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.

     8.2 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 delivery of this Agreement, consummation of the

                                       9
<PAGE>

     transactions contemplated by this Agreement and compliance by McLeod with
     all 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 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.

     8.3.  Authority to do Business. McLeod is a corporation duly authorized to
           -------------------------
     do business in Indiana, Michigan and Ohio and is currently in good standing
     in those states.

     8.4.  No Omissions or Misrepresentations. To the best of the knowledge of
           -----------------------------------
     McLeod and its officers, no representation, warranty, or statement of
     McLeod 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 IDI accurate and not misleading
     in any material respect.

9.   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 announcement of this Agreement or
     the transactions contemplated hereby to the press or general public prior
     to 5:00 p.m., Eastern Time, Tuesday, March 4, 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.

                                      10
<PAGE>

10.  EMPLOYEES AND INDEPENDENT CONTRACTORS
     -------------------------------------
     10.1.  Sales Employees of IDI. A list of employees of IDI who sell
            -----------------------
     advertising or manage those who sell advertising, excluding senior
     executives, is attached as Exhibit "H" and incorporated herein by this
     reference. Beginning upon execution of this Agreement, McLeod will have the
     right and authority to interview all such employees. On the date of Public
     Announcement pursuant to Section 9 above, IDI will provide a current and
     up-to-date list of employees of IDI who sell advertising or manage those
     who sell advertising, except senior executives, (collectively "the Sales
     Force" and individually "member of the Sales Force") and McLeod will
     subsequently offer to employ the Sales Force, pursuant to McLeod's standard
     employment practices and benefits packages for sales employees and sales
     management, and all of IDI's sales support staff. All members of the Sales
     Force hired by McLeod and all sales support staff hired by McLeod will be
     made available by IDI beginning April 1, 1997, or on such earlier dates as
     may be feasible on an individual basis. Payment of any amount under this
     Agreement is contingent on McLeod hiring, as described above, no less than
     ninety percent (90%) of the Sales Force. 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. Within ten (10) days after the date of Public Announcement
     pursuant to Section 9 above, McLeod will notify IDI that (1) the conditions
     are satisfied, (2) the conditions are waived, or (3) the conditions are not
     satisfied and McLeod is declaring this Agreement null and void. If McLeod
     declares this Agreement null and void and receives an immediate return of
     all amounts paid by it, McLeod will not employ and any person who was an
     employee of IDI on the date of Public Announcement pursuant to Section 9
     above for a period of twelve (12) months following such declaration and
     receipt.

     10.2. Other Employees of IDI. IDI represents that it will cease all of its
           -----------------------
     directory production operations in Indiana, including, in particular, those
     at its LaPorte, Indiana facility, and plans to discharge all production
     employees effective April 1, 1997 and all distribution employees effective
     upon completion of distribution of the last edition of the Directories
     published by IDI. IDI will prepare and deliver, at its expense, all notices

                                      11
<PAGE>

     required by state or federal laws or regulations to be given prior to
     closing or shutdown of a plant, including but not limited to those notices
     required by the Worker Adjustment and Retraining Notification Act.
     Beginning upon execution of this Agreement, McLeod has the right, in its
     sole discretion, to interview, and to subsequently hire, any or all of
     IDI's employees unrelated to sales, as McLeod chooses. All employees
     unrelated to sales who are hired by McLeod will be made available by IDI
     beginning no later than April 1, 1997, except employees involved in
     distribution who will be made available upon conclusion of distribution of
     those directories remaining to be distributed on April 1, 1997, but in no
     event later than June 16, 1997.

     10.3.  All Employees of IDI. McLeod is not, as a term or condition of this
            ---------------------
     Agreement, assuming any of IDI's obligations with respect to employment
     contracts or independent contractor contracts, or other agreements with its
     employees, whether written or oral. IDI will assist McLeod in the
     interviewing and hiring of IDI employees by McLeod. IDI, Morgan, Meijer,
     Hendricks, Nelson and TDI will not, without the prior written consent of
     McLeod, interview, offer new employment positions to, or offer to continue
     employment of, IDI's employees who are members of the Sales Force or sales
     support staff, (1) during the interview and hiring process of McLeod; or
     (2) who McLeod hires, or desires to hire, pursuant to this section, for a
     period of three years after April 1, 1997.

11.  NON-COMPETE AGREEMENTS
     ----------------------
     11.1. In consideration of McLeod's purchase of the Directories and payment
     of cash consideration, IDI, Morgan, Meijer, TDI and all officers,
     directors, shareholders and equity holders of IDI and TDI shall execute a
     Covenant Not to Compete and Confidentiality Agreement at Closing
     substantially in the form attached hereto as Exhibit "I." In consideration
     of McLeod's purchase of the Directories and payment of cash consideration,
     Hendricks and Nelson shall execute a Covenant Not to Compete and
     Confidentiality Agreement at Closing substantially in the form attached
     hereto as Exhibit "J."

     11.2.  IDI will assign to McLeod, by Assignment in the form attached hereto
     as Exhibit "K," all of IDI's rights under its Consulting and
     Non-Competition Agreement with Norman

                                      12
<PAGE>

     H. and Barbara A. Steigely, dated November 10, 1994, a copy of which is
     attached as Exhibit "L,"

     11.3. IDI will obtain and deliver to McLeod a Consent to the assignment of
     the Consulting and Non-Competition Agreement with Norman H. and Barbara A.
     Steigely, in the form attached as Exhibit "M," executed by Norman H. and
     Barbara A. Steigely, in accordance with Section 15 of said Consulting and
     Non-Competition Agreement.

     11.4. In the event it becomes necessary for McLeod to take any action to
     enforce the terms of any of the non-compete agreements, other than those
     executed by IDI, IDI will use its best efforts to assist McLeod in proving
     that full and adequate consideration for the non-compete agreements was
     paid to and received by the parties making the agreement not to compete.

12.  LEASES
     ------

     12.1.  IDI and U. S. Directories, Inc. ("USD") are parties to a lease of
     property commonly known as 333 Bosserman Street, LaPorte, Indiana (the
     "LaPorte premises"). IDI represents and warrants it is the sole owner and
     holder of an assignable leasehold interest in the LaPorte premises, free
     and clear of all liens and encumbrances. IDI will assign it's interest in
     its current lease with USD to McLeod and McLeod will negotiate with USD to
     reach a new lease of the premises under terms acceptable to McLeod and
     which will allow IDI to be completely released from all further obligations
     under it's current lease with USD. This Agreement and all transactions
     contemplated hereby are contingent upon IDI, McLeod and USD reaching [a] an
     agreement for the termination of the existing lease between IDI and USD and
     [b] new lease agreement between McLeod and USD on or before April 1, 1997.
     In the event this contingency is not timely satisfied, McLeod will accept
     assignment of the lease from IDI and will assume all of IDI's obligations
     under the lease referred to above.

     12.2.  Flashes Publishers, Inc. and James Z. and Christine E. Sieradzki are
     parties to a lease of property commonly known as Cambridge Office Plaza
     Suite D, 230 Catalpa Road, Suite D, Mishawaka, Indiana (the "Mishawaka
     premises"). IDI represents and warrants it now owns and controls all right,
     title and interest of Flashes Publishers, Inc. in, to and under said lease
     and is the sole holder of an assignable leasehold interest in the Mishawaka
     premises,

                                      13
<PAGE>

free and clear of all liens and encumbrances.  IDI will assign it's interest in
the current lease of the Mishawaka premises to McLeod.  McLeod will accept
assignment of the lease from IDI and will assume all of IDI's obligations
under the lease referred to above.

12.3.  Flashes Publishers, Inc. and Muncie Gateway Center Limited Partnership
are parties to a lease of approximately 1500 square feet of space in the
property commonly known as 400 N. High, Suite 302, Muncie, Indiana (the "Muncie
premises"). IDI represents and warrants it now owns and controls all right,
title and interest of Flashes Publishers, Inc. in, to and under said lease and
is the sole holder of an assignable leasehold interest in the Muncie premises,
free and clear of all liens and encumbrances. IDI will assign it's interest in
the current lease of the Muncie premises to McLeod. McLeod will accept
assignment of the lease from IDI and will assume all of IDI's obligations under
the lease referred to above.

12.4.  INFO America Phone Books, Inc. and OPN Systems, Inc. are parties to a
lease of property commonly known as 6208-B Constitution Drive, Ft. Wayne,
Indiana (the "Ft. Wayne premises").  IDI represents and warrants it now owns and
controls all right, title and interest of INFO America Phone Books, Inc. in, to
and under said lease and is the sole holder of an assignable leasehold interest
in the Ft. Wayne premises, free and clear of all liens and encumbrances.  IDI
will assign it's interest in the current lease of the Ft. Wayne premises to
McLeod.  McLeod will accept assignment of the lease from IDI and will assume all
of IDI's obligations under the lease referred to above.

12.5  IDI and Brite Voice are parties to a lease of in the audiotex equipment
systems described on Exhibit "N" (the "leased audiotex equipment").  IDI
represents and warrants that it is the  sole owner and holder of an assignable
leasehold interest in the leased audiotex equipment, free and clear of all liens
and encumbrances.  IDI will assign it's interest in the current lease of the
leased audiotex equipment to McLeod.  McLeod will accept assignment of said
lease from IDI and will assume all of IDI's obligations under said lease, except
as provided in Section 5.2 above.


                                      14
<PAGE>

13.  INDEMNIFICATION OF McLEOD
     -------------------------

            IDI hereby indemnifies and saves McLeod harmless from and against
     any and all costs, liability, or expenses, including reasonable attorney's
     fees arising out of (i) any material breach of warranty, covenant,
     agreement, or representation made by IDI, Morgan, Meijer or TDI, (ii) any
     material nonfulfillment of any agreement of IDI, Morgan, Meijer or TDI
     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, (iii) any cause of action or expense directly or
     indirectly related to IDI's publication of the editions of the Directories
     published by IDI; and (iv) all actions, suits, proceedings, demands,
     assessments, judgments, costs, and expenses incident to any of the
     foregoing.


14.  INDEMNIFICATION OF IDI
     ----------------------

            McLeod hereby indemnifies and saves IDI harmless from and against
     any and all costs, liability, or expenses, including reasonable attorney's
     fees, arising out of (i) any material breach of warranty, covenant,
     agreement, or representation made by McLeod; (ii) any material
     nonfulfillment of any agreement 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 IDI; and
     (iii) any cause of action or expense directly or indirectly related to
     McLeod's publication of the editions of the Directories published by
     McLeod; and (iv) all actions, suits, proceedings, demands, assessments,
     judgments, costs, and expenses incident to any of the foregoing.


15.  CONFIDENTIAL INFORMATION
     ------------------------

     15.1.  Definition.  For Purposes of this Section, "Confidential
            ----------
     Information" means any information or compilation of information not
     generally known, which is propriety 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 federal state tax
     returns, and the financial terms of this transaction. Information shall be
     treated as Confidential Information


                                      15
<PAGE>

     irrespective of its source and all information that is identified as being
     "confidential," "trade secret," or is identified or marked with any similar
     reference, or any information that IDI treats as confidential or McLeod
     should know is being treated by IDI as confidential, shall be presumed to
     be Confidential Information.

     15.2.  Convenants by Parties.  McLeod, IDI, Morgan, Meijer, Hendricks,
            ---------------------
     Nelson and TDI agree and covenant with respect to all Confidential
     Information received or learned by either of them as follows:

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

            15.2.2. 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;

            15.2.3. 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
            publication of directories by McLeod, including competition with the
            other party or solicitation of the other party's customers; and,

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


16.  MISCELLANEOUS
     -------------

     16.1   Broker or Finder.  The parties represent to each other that no
            ----------------
     person is entitled to any brokerage commission, finder's fee, or any other
     like payment in connection with any


                                      16
<PAGE>

transaction contemplated by this Agreement by reason of the action of any party
to this Agreement.
16.2.      Failure by McLeod. In the event McLeod fails to complete the Closing
           -----------------
of this Agreement as described above through no fault on the part of IDI and
unrelated to any failure of any condition or postponement described in this
Agreement and not as the result of a breach of this Agreement by McLeod, McLeod
will pay to IDI the $1,000,000.00 paid into escrow pursuant to Section 2.2
above, pursuant to the terms of the Escrow Agreement attached as Exhibit "E."
IDI agrees that this payment shall be its sole and exclusive remedy for a
material breach by and failure by McLeod to complete the transactions
contemplated by the Agreement.
16.3.      Severability. If any provisions 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.
16.4.      Applicable Law. This Agreement shall be construed in accordance with
           --------------
the laws selected by choice of law provisions of the state of venue described
below. Venue for any action to enforce this Agreement brought by McLeod shall be
in Kent County, Michigan and venue for any action to enforce this Agreement by
any other party shall be in Linn County, Iowa.
16.5.      Notices. Any notices or other communications required or permitted
           -------
under this Agreement shall be sufficiently given if sent by certified mail,
return receipt requested, addressed as follows:

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

                 IDI:                Indiana Directories, Inc.
                                     c/o Talking Directories, Inc.
                                     5311 Clyde Park Avenue, S.W.
                                     Grand Rapids, MI 49509
                                     Attn: John Morgan


                                      17
<PAGE>

                 TDI:                Talking Directories, Inc.
                                     5311 Clyde Park Avenue, S.W.
                                     Grand Rapids, MI 49509
                                     Attn: John Morgan

                 Morgan:             John Morgan
                                     1615 Beard Drive, S.E.
                                     Grand Rapids, Michigan 49509

                 Meijer:             Hank Meijer
                                     c/o Talking Directories, Inc.
                                     5311 Clyde Park Avenue, S.W.
                                     Grand Rapids, Michigan 49509

                 Nelson:             Brad Nelson
                                     c/o Talking Directories, Inc.
                                     5311 Clyde Park Avenue, S.W.
                                     Grand Rapids, Michigan 49509

                 Hendricks:          Jack Hendricks
                                     c/o Talking Directories, Inc.
                                     5311 Clyde Park Avenue, S.W.
                                     Grand Rapids, Michigan 49509

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

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

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

16.9.  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

                                      18
<PAGE>

     Agreement or any interest herein without the prior written consent of the
     other parties hereto. Assignments without such consent shall be void.



McLeodUSA Publishing Company                    Indiana Directories, Inc.



By: /s/ Arthur L. Christoffersen                By: /s/ John P. Morgan
   ------------------------------------            --------------------------
   Arthur L. Christoffersen, President             John P. Morgan, President



Talking Directories, Inc.



By: /s/ John P. Morgan
   --------------------------



 /s/ John P. Morgan                              /s/ Hendrik G. Meijer
-----------------------------                   ----------------------------
John P. Morgan                                       Hendrik G. Meijer


 /s/ Jack E. Hendricks                           /s/ Brad Nelson
-----------------------------                   ----------------------------
Jack E. Hendricks                                    Brad Nelson











                                      19
<PAGE>

                                  Exhibit "A"

<TABLE>
<CAPTION>
                                                   Last IDI                Minimum      Est. Net
                                Publication        Sales End                Number      Cash Rev
Directory                          Date            Date                Distributed     (in 000's)
---------                     --------------       --------            -----------     ----------
<S>                           <C>                  <C>                 <C>             <C>
1.  Boone                     February, 1997       12/31/96                 21,000           79
2.  St. Joseph (South Bend)   February, 1997       12/27/96                205,000        1,060
3.  Delaware                  February, 1997       01/10/97                 70,000          659
4.  Huntington*               March, 1997          02/14/97                 23,000          111
5.  Kosciusko                 March, 1997          01/21/97                 47,000          364
6.  Whitley*                  March, 1997          02/14/97                 18,000           85
7.  Allen Co. (Ft. Wayne)     April, 1997          02/03/97                200,000        1,800
8.  Henry                     April, 1997          02/21/97                 29,000          116
9.  LaPorte                   April, 1997          02/26/97                 90,000          912
10. Grant (Marion)            April, 1997          03/11/97                 51,000          215
11. Marshall                  May, 1997            03/28/97                 27,000          255
12. Wells/Adams               May, 1997            03/31/97**               22,000          151
13. Jay-Randolph              May, 1997            03/31/97**               13,000           68
-----------------------------------------------------------------------------------------------

<CAPTION>
                                                   First McLeod
                                                 Sales Start Date
                                                 ----------------
<S>                           <C>                <C>                     <C>             <C>
14. Fulton                    June, 1996           04/01/97**               16,000          119
15. Starke                    June, 1996           04/01/97**               16,000           90
16. Porter                    July, 1996           04/01/97**               97,000          446
17. Cass, MI                  July, 1996           04/01/97**               25,000          140
18. Miami/Wabash              September, 1996      05/01/97                 42,000          317
19. DeKalb/Noble              September, 1996      04/01/97**               42,000          228
20. Madison                   September, 1996      04/01/97**               80,000          536
21. Cass, IN                  October, 1996        04/01/97**               28,000          313
22. Elkhart                   November, 1996       05/01/97                100,000          586
23. Howard/Tipton             November, 1996       07/01/97                 78,000          498
24. Berrien, MI               November, 1996       04/01/97**              100,000        1,000
25. Allen/Auglaize, OH        December, 1996       08/01/97                 85,000          246
26. Darke/Mercer, OH          December, 1996       07/01/97                 30,000          116
                                                                         ---------       ------
      TOTALS                                                             1,555,000       10,510
</TABLE>


* combined into one directory in 1997
** estimated dates
<PAGE>

                                  Exhibit "C"

                                 Bill of Sale
                                 ------------

        KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Indiana
Directories, Inc., a Michigan corporation ("IDI"), 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 IDI's right, title and interest
in and to the property described on Exhibit "A," attached to this Bill of Sale
and made a part hereof for all purposes.

        IDI 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 IDI will warrant and defend title to said property
against any and every person claiming rights therein.

        IDI 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 IDI'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 IDI. IDI acknowledges that the foregoing
power is coupled with an interest and shall be irrevocable.

        Dated:  March _____, 1997.


                                       Indiana Directories, Inc.



                                       By:
                                          ---------------------------------
                                           John P. Morgan, President

STATE OF                    )
        --------------------
                            )ss:
COUNTY OF                   )
         -------------------

        On this ____th day of March, 1997, before me, the undersigned, a Notary
Public in and for the State of _____________________, personally appeared John
P. Morgan, 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 he 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>

                                  Exhibit "D"

                      Purchase Price Allocation Schedule
                      ----------------------------------

Purchase Price Allocation Under IRC Section 1060

      Purchase Price                                                 $10,660,000

1.) Paid to Indiana Directories, Inc.

      Class I Assets

              No Class I assets purchased

      Class II assets purchased

              No Class II assets purchased

      Class III Assets

              Machinery & Equipment and Furniture and Fixtures       $   150,000
                                                                     -----------

      Remaining Purchase Price                                       $10,510,000

      Class IV Assets

              Product designs and drawings, catalogs, data, files, records,
              price lists, and other documents relating to suppliers, customer
              lists, contracts, catalogs, marketing materials, patents,
              trademarks, licenses, copyrights, directory names, brand names,
              trade dress, propriety information and trade secrets, existing
              non-compete agreements and all other section 197 intangible assets
              listed in the purchase agreement.                      $10,390,000
                                                                     -----------

      Remaining Purchase Price                                       $   120,000

2.) Paid to others for Covenant not to Compete and Confidentiality
    Agreements

                  Talking Directories, Inc.                          $    30,000
                  John P. Morgan                                          30,000
                  Hendrik Meijer                                          30,000
                  Brad Nelson                                             15,000
                  Jack Hendricks                                          15,000

      Remaining Purchase Price                                       $       -0-
<PAGE>

                                 Exhibit "E"

                               Escrow Agreement
                               ----------------

THIS AGREEMENT is by and between Norwest Bank Iowa, N.A., Cedar Rapids, Iowa
(the "Escrow Agent"), McLeodUSA Publishing Company, an Iowa corporation
("McLeod"), and Indiana Directories, Inc., a Michigan corporation ("IDI"):

       WHEREAS, McLeod has, of even date herewith, purchased certain telephone
directory business from IDI pursuant to a Sale and Purchase Agreement between
McLeod and IDI dated February 21, 1997 (the "Sale Agreement"); and

       WHEREAS, pursuant to the Sale Agreement $1,000,000.00 of the purchase
price has been deposited in escrow with the terms set out below; and

       WHEREAS, the Escrow Agent is willing to hold and disburse such funds, in
accordance with this Agreement.

       NOW THEREFORE, the parties hereto agree as follows:

       1.  McLeod has established, with Escrow Agent, Escrow Account No.
4030507660, (the "Escrow Account") and has, even date herewith, deposited the
sum of $1,000,000.00 into the Escrow Account in accordance with the terms of the
Sale Agreement.

       2.  If IDI notifies the Escrow Agent that McLeod failed to complete the
Closing of the Sale Agreement through no fault or breach on the part of IDI and
unrelated to any failure of any condition or postponement described in this
Agreement and not as the result of a breach of this Agreement by McLeod, the
Escrow Agent shall disburse the entire balance in the Escrow Account to IDI;
provided, however, before a disbursement is made to McLeod due to any such
notice, McLeod shall be given written notice and shall have (10) days to notify
the Escrow Agent that it disputes such disbursement.  In such event, no
distribution shall be made to IDI and Section 8 below shall control the dispute.

       3.  Subject to Section 4 below, the balance in the Escrow Account,
including interest, shall be paid directly to IDI or its designee within fifteen
(15) days after McLeod and IDI jointly certify that all invoices for all
expenses of the Directories have been submitted for payment and paid and that
primary distribution of the Directories has been completed pursuant to the Sale
Agreement.  All invoices and any other necessary documentation shall be
presented to James Haddad of McLeod, who shall direct the Escrow Agent to
advance funds for payment of same.

       4.  Pursuant to the Sale Agreement, if the net cash revenue for the
Directories is less than $10,510,000.00, the consideration paid by McLeod to IDI
for the Directory shall reduce in a dollar-for-dollar basis.  Any such reduction
is to be repaid to McLeod from the balance remaining in the escrow account after
payment of all printing and distribution costs for the Directories.  Therefore,
if McLeod notifies the Escrow Agent that the consideration to be paid to IDI
should reduce pursuant to the terms of the Sales Agreement, the amount of such
reduction shall be disbursed from the escrow

<PAGE>

account to McLeod after payment of all printing and distribution costs for the
Directory; provided, however, before a disbursement is made to McLeod due to any
such notice of a reduction in the consideration to be paid to IDI, IDI shall be
given written notice of a reduction and shall have ten (10) days to notify the
Escrow Agent that it disputes such disbursement.  In such event, no distribution
shall be made to McLeod and Section 8 below shall control the dispute.

        5.      During the time the funds are held in the Escrow Account, the
Escrow Agent shall, at the direction of McLeod and IDI, invest such funds in
savings or time deposits, U.S. government securities, securities guaranteed by
the United States, Certificates of Deposit with maturities approved by McLeod
and IDI, or shares of a Money Market Fund, and all accrued interest shall be
paid to IDI together with the last disbursement to IDI under this Escrow
Agreement.

        6.      The Escrow Agent shall not be liable for any error in judgment
or for any act done or omitted by it in good faith, or for anything that it may,
in good faith, do or refrain from doing in connection herewith, nor will any
liability be incurred by the Escrow Agent if, in the event of any dispute or
question as to the construction of this Agreement, it acts in accordance with
the written opinion of its legal counsel.

        7.      The Escrow Agent is authorized to act upon any document believed
by it to be genuine and signed by the proper party or parties and will incur no
liability in so acting.

        8.      If either party disputes any disbursement by the Escrow Agent
under this Agreement, the Escrow Agent shall promptly refer the dispute to the
American Arbitration Association for Settlement by arbitration in accordance
with the Association's rules, unless it is settled by mutual agreement of McLeod
and IDI.  As part of any such arbitration award, the arbitrator may establish
his fee and expenses in connection therewith, which the unsuccessful party shall
pay.  Any award shall be a conclusive determination of the matter and shall be
binding upon all parties.  Arbitration proceedings shall be held in Cedar
Rapids, Iowa, unless the parties hereto agree on another location.

        9.      IDI and McLeod hereby agree to hold the Escrow Agent harmless
from any and all claims, liabilities, losses, actions, suits or proceedings at
law or in equity, or any other expenses, fees or charges of any character or
nature, that it may incur or with which it may be threatened by reason of its
acting as Escrow Agent, and against any and all expenses, including attorney
fees and the cost of defending any action, suit or proceeding or resisting any
claim, interpleader or otherwise, or any other expenses, that may be incurred by
the Escrow Agent by reason of disputes arising under this Escrow Agreement.

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

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

                        IDI:            Indiana Directories, Inc.
                                        c/o Talking Directories, Inc.
                                        5311 Clyde Park Avenue, S.W.
                                        Grand Rapids, MI 49509
                                        Attn:  John Morgan

                        Escrow Agent:   Norwest Bank Iowa, N.A.
                                        P.O. Box 1967
                                        Cedar Rapids, IA  52406
                                        Attn:  Greg Neumeyer

        11.     The Escrow Agent shall be entitled to a fee of $250.00 per year
for service as Escrow Agent, to be paid to McLeod.

                Dated this 27th day of February, 1997.

McLeodUSA Publishing Company              Indiana Directories, Inc.


By:                                       By:
   -------------------------------------     -----------------------------------
    Arthur L. Christoffersen, President       John Morgan, President


Norwest Bank Iowa, N.A.


By:
   -------------------------------------
    Gregory W. Neumeyer, Vice President
<PAGE>

                                  Exhibit "I"

             Covenant not to Compete and Confidentiality Agreement
             -----------------------------------------------------

McLeodUSA Publishing Company, an Iowa corporation, ("McLeod"), Indiana
Directories, Inc., a Michigan Corporation ("IDI"), John Morgan ("Morgan"), Hank
Meijer ("Meijer"), Jack Hendricks ("Hendricks"), Brad Nelson ("Nelson") and
Talking Directories, Inc., a Michigan corporation ("TDI") have entered into a
Sale and Purchase Agreement dated February 21, 1997 ("the Agreement") which
provides for the execution of this Covenant not to Compete and Confidentiality
Agreement.

In fulfillment of the terms of the Agreement, adequate, good and valuable
consideration recited herein, ______________, IDI and TDI, jointly and
severally, (referred to hereafter as "the undersigned," meaning any one, some or
all of them) enter into this agreement with McLeod, as follows:


1.   For a period of ten (10) years from the date hereof, the undersigned shall
not, within the distribution area of any directory purchased by McLeod from IDI
pursuant to the Agreement, (a) directly or indirectly, as a shareholder,
proprietor, partner, consultant, employee, agent, officer, director, associate,
lender, investor or in any other capacity, engage in the telephone directory
business in competition with McLeod, nor (b) invest in, lend money to, guarantee
loans of, make gifts to, advise or by any other means assist or contract with
any other person or entity in the telephone directory business or to so compete
with McLeod.

2.   The undersigned will not disclose any Confidential Information to others
outside McLeod or use same for any unauthorized purposes without written
approval from an officer of McLeod. "Confidential Information" means any
information or compilation of information not generally known, that is
proprietary to the business of McLeod or IDI or related to McLeod's publication
of any directory which is a subject of the Agreement, and includes, without
limitation, trade secrets, inventions, information pertaining to development,
marketing, sales, accounting, and licensing of the business products and
services, customer lists and contracts, customer information contained in
or related to customer records, papers, correspondence or files and all
financial information contained in federal and state tax returns. Confidential
Information does not include information that is independently developed or
received from a third party unrelated to McLeod or IDI, or information that IDI
or TDI currently uses for or in directories published in other markets by IDI,
_______ or TDI. In addition, the undersigned shall not be in default under this
agreement if the undersigned's disclosure of Confidential Information is
pursuant to a subpoena or other court order.

3.   The parties acknowledge and agree that customer lists and contracts,
customer information and customer trust and good will are the primary assets of
McLeod, are the primary assets previously purchased by McLeod from IDI and are
the primary assets being purchased pursuant to the Agreement.  The parties
desire and agree to protect these interests, assets and information in order to
maintain the adequacy of the consideration for the Agreement, for this agreement
and for the payments made by McLeod pursuant to the Agreement.
<PAGE>

4.   The undersigned acknowledges that (i) McLeod is paying substantial and
valuable consideration for this agreement, (ii) the undersigned will directly
benefit from the transactions contemplated by the Agreement and the terms of the
Agreement, described above, including the receipt of adequate cash consideration
from McLeod for this Covenant not to Compete and Confidentiality Agreement,
(iii) all officers, directors, shareholders and equity holders of IDI and TDI
will benefit directly and financially from the Agreement, (iv) that the terms of
this agreement are reasonable and necessary to protect the legitimate interest
of McLeod and (vi) competition by the undersigned as herein prohibited would
cause substantial loss and expense, irreparable damage and harm to McLeod, its
assignees or successors, which cannot be fully compensated by monetary award.

5.   The parties agree that in the event the provisions of this agreement should
ever be adjudicated to exceed the time or geographic limitations permitted by
law, then such provisions shall be deemed reformed by the parties to this
agreement pursuant to this sentence to the maximum time and geographic
limitation allowed by law.

6.   The undersigned agree that upon a violation of this agreement, McLeod or an
assignee or successor in interest to it, shall have the following rights, which
are cumulative, separate causes of action that may be asserted against the
undersigned, jointly and severally.  McLeod, its successors or assigns, in the
event of violation by the undersigned of this agreement, may:

     6.1.  Commence an action to secure an injunction to enjoin the undersigned
           from violating this agreement;

     6.2.  Commence an action to require the undersigned to specifically perform
           this agreement;

     6.3.  Commence an action to secure a judgment for monetary damages for
           violation of this agreement, including, if applicable, punitive
           damages; or

     6.4.  Commence an action to assert any and all of the rights that McLeod,
           or its successor or assign, may have against the undersigned at such
           time because of any breach of this agreement.

     6.5.  In addition, McLeod, its successor or assignee, may secure reasonable
           attorney's fees and costs incurred as a result of judgment, order or
           injunction being rendered against the undersigned.

7.   No delay or omission by McLeod in exercising any right under this agreement
shall operate as a waiver of that or any other right. A waiver or consent given
by McLeod on any one occasion shall be effective only in that instance and shall
not be construed as a bar or waiver of any right on any other occasion. In case
any provision of this agreement shall be invalid, illegal, or otherwise
unenforceable, the parties shall negotiate in good faith with respect to a
substitute provision, such unenforceable provision will be deemed severable and
all remaining provisions will remain in full force and effect.

8.   The parties hereto expressly consent to the use of multiple counterparts
each of which shall constitute an original and all of which together will
constitute one and the same instrument.

<PAGE>

9.   This agreement shall be governed by and construed in accordance of the laws
of the State of Iowa.

Dated: March __, 1997

McLeodUSA Publishing Company            Indiana Directories, Inc.


By:                                     By:
   ---------------------------             -------------------------------

                                        Talking Directories, Inc.


                                        By:
-----------------------------------        -------------------------------
       name



<PAGE>

                                  Exhibit "J"

             Covenant not to Compete and Confidentiality Agreement
             -----------------------------------------------------

McleodUSA Publishing Company, an Iowa corporation, ("McLeod"), Indiana
Directories, Inc., a Michigan Corporation ("IDI"), John Morgan ("Morgan"), Hank
Meijer ("Meijer"), Jack Hendricks ("Hendricks"), Brad Nelson ("Nelson") and
Talking Directories, Inc., a Michigan corporation ("TDI") have entered into a
Sale and Purchase Agreement dated February 21, 1997 ("the Agreement") which
provides for the execution of this Covenant not to Compete and Confidentiality
Agreement.

In fulfillment of the terms of the Agreement, adequate, good and valuable
consideration recited herein, _________________ enters into this agreement with
McLeod, as follows:


1.   For a period of five (5) years from the date hereof, the undersigned shall
not, within the distribution area of any directory currently being published by
McLeod upon conclusion of the transactions described in the Agreement, including
those being purchased by McLeod from IDI pursuant to the Agreement, (a) directly
or indirectly, as a shareholder, proprietor, partner, consultant, employee,
agent, officer, director, associate, lender, investor or in any other capacity,
engage in the telephone directory business in competition with McLeod, nor (b)
invest in, lend money to, guarantee loans of, make gifts to, advise or by any
other means assist or contract with any other person or entity in the telephone
directory business or to so compete with McLeod.

2.   The undersigned will not disclose any Confidential Information to others
outside McLeod or use same for any unauthorized purposes without written
approval from an officer of McLeod. "Confidential Information" means any
information or compilation of information not generally known, that is
proprietary to the business of McLeod or IDI or related to McLeod's publication
of any directory which is a subject of the Agreement, and includes, without
limitation, trade secrets, inventions, information pertaining to development,
marketing, sales, accounting, and licensing of the business products and
services, customer lists and contracts, customer information contained in or
related to customer records, papers, correspondence or files and all financial
information contained in federal and state tax returns. Confidential Information
does not include information that is independently developed or received from a
third party unrelated to McLeod or IDI, or information that IDI or TDI currently
uses for or in directories published in other markets by IDI or TDI. In
addition, the undersigned shall not be in default under this agreement if the
undersigned's disclosure of Confidential Information is pursuant to a subpoena
or other court order.

3.   The parties acknowledge and agree that customer lists and contracts,
customer information and customer trust and good will are the primary assets of
McLeod, are the primary assets previously purchased by McLeod from IDI and are
the primary assets being purchased pursuant to the Agreement. The parties desire
and agree to protect these interests, assets and information in order to
maintain the adequacy of the consideration for the Agreement, for this agreement
and for the payments made by McLeod pursuant to the Agreement.
<PAGE>

4.   The undersigned acknowledges that (i) McLeod is paying substantial and
valuable consideration for this agreement, (ii) the undersigned will directly
benefit from the transactions contemplated by the Agreement and the terms of the
Agreement, described above, (iii) the undersigned will receive adequate cash
consideration from McLeod for this Covenant not to Compete and Confidentiality
Agreement, (iv) the undersigned will receive substantial additional cash
consideration from IDI as the result of the undersigned facilitating and
participating in the conclusion of the transactions contemplated by the
Agreement, including, specifically, the execution of this Covenant not to
Compete and Confidentiality Agreement, (v) that the terms of this agreement are
reasonable and necessary to protect the legitimate interests of McLeod and (vi)
competition by the undersigned as herein prohibited would cause substantial loss
and expense, irreparable damage and harm to McLeod, its assignees or successors,
which cannot be fully compensated by monetary award.

5.   The parties agree that in the event the provisions of this agreement
should ever be adjudicated to exceed the time or geographic limitations
permitted by law, then such provisions shall be deemed reformed by the parties
to this agreement pursuant to this sentence to the maximum time and geographic
limitation allowed by law.

6.   The undersigned agree that upon a violation of this agreement , McLeod or
an assignee or successor in interest to it, shall have the following
rights, which are cumulative, separate causes of action that may be asserted
against the undersigned, jointly and severally. McLeod, its successors or
assigns, in the event of violation by the undersigned of this agreement, may:

     6.1  Commence an action to secure an injunction to enjoin the undersigned
     from violating this agreement;

     6.2 Commence an action to require the undersigned to specifically perform
     this agreement;

     6.3  Commence an action to secure a judgment for monetary damages for
     violation of this agreement, including, if applicable, punitive damages;
     or

     6.4  Commence an action to assert any and all of the rights that McLeod,
     or its successor or assign, may have against the undersigned at such time
     because of any breach of this agreement.

     6.5 In addition, McLeod, its successor or assignee, may secure reasonable
     attorney's fees and costs incurred as a result of judgment, order or
     injunction being rendered against the undersigned.

7.   No delay or omission by McLeod in exercising any right under this
agreement shall operate as a waiver of that or any other right. A waiver or
consent given by McLeod on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion. In case any provision of this agreement shall be invalid, illegal, or
otherwise unenforceable, the parties shall negotiate in good faith with respect
to a substitute provision, such unenforceable provision will be deemed severable
and all remaining provisions will remain in full force and effect.

8.   The parties hereto expressly consent to the use of multiple counterparts
each of which shall constitute an original and all of which together will
constitute one and the same instrument.

<PAGE>

9.   This agreement shall be governed by and construed in accordance of the
laws of the State of Iowa.

Dated: March_________, 1997

McLeodUSA Publishing Company


By:_________________________        ___________________________
                                          name