EXHIBIT 10.47

                             STOCKHOLDERS' AGREEMENT

       This  Stockholders'  Agreement  (this  "Agreement") is entered into as of
November 18, 1998, by and among McLeodUSA  Incorporated,  a Delaware corporation
(the "Company");  IES Investments  Inc., an Iowa corporation  ("IES");  Clark E.
McLeod  ("McLeod");  Mary E. McLeod (together with McLeod,  the "McLeods");  and
Richard  A.  Lumpkin   ("Lumpkin")  and  each  of  the  former  shareholders  of
Consolidated  Communications  Inc. ("CCI") and certain permitted  transferees of
the former  CCI  shareholders  in each case who are listed in  Schedule I hereto
(the "CCI Shareholders"). IES, the McLeods, Lumpkin and the CCI Shareholders are
referred to herein collectively as the "Principal Stockholders" and individually
as a "Principal Stockholder."

       WHEREAS,  the  Company,  the  Principal  Stockholders  and certain  other
stockholders  are parties to a Stockholders'  Agreement  entered into as of June
14,  1997,  as  amended  on  September  19,  1997 (the  "Original  Stockholders'
Agreement");

       WHEREAS, Section 3 of the Original Stockholders' Agreement has expired in
accordance  with its terms and certain other  provisions  thereof will expire in
accordance with their terms; and

       WHEREAS, the Company and the Principal  Stockholders deem it to be in the
best interests of the Company and its stockholders to enter into a new agreement
to continue to provide for the  continuity  and  stability  of the  business and
policies of the Company on the terms and conditions hereinafter set forth;

       NOW,  THEREFORE,  for and in  consideration  of the  foregoing and of the
mutual covenants and agreements  contained  herein,  the parties hereto agree as
follows:


1.     VOTING AGREEMENT

       1.1    Board of Directors

       For the period  commencing  on the Voting  Agreement  Effective  Date (as
defined in Section 1.2) and ending on the Expiration Date (as defined in Section
1.2),  each Principal  Stockholder,  for so long as such  Principal  Stockholder
beneficially and continuously owns at least four million  (4,000,000)  shares of
the
<PAGE>

Company's  Class A common  stock,  $.01 par value per share (the "Class A Common
Stock"),  subject to adjustment  pursuant to Section 5.1, shall take or cause to
be taken all such action within their  respective  power and authority as may be
required:

              (a)    to establish and maintain the authorized  size of the Board
                     of Directors of the Company  (the "Board of  Directors"  or
                     the "Board") at up to eleven (11) directors;

              (b)    to  cause  to be  elected  to the  Board  one (1)  director
                     designated  by IES,  for so long  as IES  beneficially  and
                     continuously owns at least four million  (4,000,000) shares
                     of the Class A Common Stock (subject to adjustment pursuant
                     to Section 5.1);

              (c)    to cause Lumpkin to be elected to the Board, for so long as
                     Lumpkin and the CCI Shareholders  collectively beneficially
                     and  continuously  own at least  four  million  (4,000,000)
                     shares of the Class A Common Stock  (subject to  adjustment
                     pursuant to Section 5.1);

              (d)    to cause to be elected to the Board three (3) directors who
                     are executive officers of the Company designated by McLeod,
                     for so long as the McLeods  collectively  beneficially  and
                     continuously own at least four million  (4,000,000)  shares
                     of the Class A Common Stock (subject to adjustment pursuant
                     to Section 5.1);

              (e)    to cause to be elected to the Board a director or directors
                     nominated  by the Board to replace a director or  directors
                     designated  pursuant  to  paragraphs  (b) through (d) above
                     upon the earlier to occur of such designated  director's or
                     directors'   resignation   (and  the   acceptance  of  such
                     resignation  by the  Board)  and  the  expiration  of  such
                     director's or  directors'  term as a result of any party or
                     parties  identified in paragraphs  (b) through (d) above no
                     longer   beneficially   owning   at  least   four   million
                     (4,000,000)  shares


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<PAGE>

                     of the Class A Common Stock (subject to adjustment pursuant
                     to Section 5.1) at any time during the period commencing on
                     the  Voting  Agreement  Effective  Date and  ending  on the
                     Expiration  Date; it being understood that within three (3)
                     business days  following  such time as the party or parties
                     identified  in  paragraphs  (b) through (d) above no longer
                     beneficially  and  continuously  own at least four  million
                     (4,000,000)  shares of the Class A Common Stock (subject to
                     adjustment  pursuant to Section  5.1)  during such  period,
                     such  party or  parties  shall use its or their  respective
                     best efforts to cause the director or directors  designated
                     by  such  party  or  parties  to  tender  their   immediate
                     resignation  to the Board  which  the  Board may  accept or
                     reject; and

              (f)    to cause to be elected to the Board, if and as nominated by
                     the Board, up to six (6) non-employee directors;

provided, however, notwithstanding any other provision of this Agreement, if any
Principal Stockholder hereto would not be entitled to have a director elected to
the  Board  with  respect  to such  Principal  Stockholder  under  the  Original
Stockholders'  Agreement but would be entitled to have a director elected to the
Board with respect to such Principal Stockholder pursuant to Section 1.1 of this
Agreement  except that the Voting  Agreement  Effective  Date  hereunder has not
occurred,  then this Agreement  shall be applied with respect to the election of
the director of such Principal  Stockholder as if the Voting Agreement Effective
Date has occurred and each party hereto shall act under this  Agreement to cause
the election of the director of such Principal Stockholder.

       The parties hereto agree that Section 1.1 and Section 1.2 of the Original
Stockholders'  Agreement  shall  terminate  and be of no  force or  effect  with
respect to the rights and  obligations  of the parties hereto amongst each other
as of the Voting Agreement  Effective Date. For purposes of Section 1.1, Lumpkin
and all of the  CCI  Shareholders  shall  be  deemed  to be a  single  Principal
Stockholder,  and a CCI Shareholder shall be deemed to own shares "continuously"
as long as the shares of such CCI  Shareholder are owned by such CCI Shareholder
or by a CCI Permitted Transferee (as defined in Section 3.1).


       1.2    Definitions

       For purposes of this  Agreement,  the  following  terms have the meanings
indicated:

              (a) "Affiliate" and "Associate" shall have the respective meanings
              ascribed to such terms in Rule 12b-2 under the Securities Exchange
              Act of 1934, as amended (the "Exchange Act").

              (b) A person shall be deemed the  "Beneficial  Owner" of and shall
              be deemed to "beneficially own" any securities:

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<PAGE>

                     (i)    which such person or any of such person's Affiliates
                            or Associates, directly or indirectly, has the right
                            to  acquire   (whether  such  right  is  exercisable
                            immediately  or only  after  the  passage  of  time)
                            pursuant   to   any   agreement,    arrangement   or
                            understanding  (whether or not in writing),  or upon
                            the exercise of conversion rights,  exchange rights,
                            other rights, warrants or options, or otherwise;

                     (ii)   which such person or any of such person's Affiliates
                            or Associates, directly or indirectly, has the right
                            to vote or dispose of or has "beneficial  ownership"
                            of (as  determined  pursuant to Rule 13d-3 under the
                            Exchange Act),  including pursuant to any agreement,
                            arrangement  or  understanding,  whether  or  not in
                            writing; or

                     (iii)  which   are   beneficially   owned,    directly   or
                            indirectly, by any other person (or any Affiliate or
                            Associate  thereof) with which such person or any of
                            such  person's  Affiliates  or  Associates  has  any
                            agreement,  arrangement or understanding (whether or
                            not in  writing),  for  the  purpose  of  acquiring,
                            holding,   voting  or   disposing   of  any   voting
                            securities of the Company.

                     For purposes of the  definition of  "Beneficial  Owner" and
                     "beneficially  own," the terms  "agreement,"  "arrangement"
                     and "understanding" shall not include this Agreement or the
                     Original Stockholders' Agreement.

              (c) "Expiration Date" shall mean December 31, 2001.

              (d) "Voting  Agreement  Effective  Date" shall mean the date which
              falls  on the  earliest  to occur  of (i) the  termination  of the
              Original Stockholders'  Agreement,  (ii) the expiration of Section
              1.1 of the Original Stockholders' Agreement in accordance with its
              terms and (iii)  MWR  Investments  Inc.  ("MWR")  no longer  being
              entitled to have a director designated by MWR elected to the Board
              in accordance  with the terms and conditions of Section 1.1 of the
              Original Stockholders' Agreement.


2.     STANDSTILL

       IES hereby agrees that, prior to the Expiration Date, neither IES nor any
Affiliate of IES will (and IES will not assist or encourage others to), directly
or

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<PAGE>

indirectly,  acquire or agree, offer, seek or propose to acquire, or cause to be
acquired, ownership (including, but not limited to, beneficial ownership) of any
securities  issued by the Company or any of its  subsidiaries,  or any rights or
options to acquire such ownership (including from a third party),  except (a) to
the extent expressly set forth in this Agreement, (b) as consented prior thereto
in writing by the Board of Directors,  (c) upon conversion of any Class B common
stock,  $.01 par value per  share,  of the  Company  into  Class A Common  Stock
pursuant  to the  terms  thereof,  (d)  with  respect  to  transfers  of  equity
securities  between or among IES and IES's  wholly  owned  subsidiaries,  parent
corporation,  or other wholly owned subsidiaries of such parent corporation,  or
(e) with respect to the grant, vesting or exercise of stock options.


3.     TRANSFERS OF SECURITIES

       3.1    Restrictions on Transfers

       (a) Except as otherwise provided in this Section 3.1 or Section 3.2, each
Principal  Stockholder  hereby  severally agrees that until the Expiration Date,
such Principal  Stockholder  will not offer,  sell,  contract to sell, grant any
option  to  purchase,   or  otherwise   dispose  of,   directly  or  indirectly,
("Transfer"),  any equity  securities  of the  Company  or any other  securities
convertible  into or  exercisable  for  such  equity  securities  ("Securities")
beneficially  owned by such Principal  Stockholder  without submitting a written
request to, and receiving the prior written  consent of, the Board of Directors,
provided, however, that any CCI Shareholder may transfer Securities to any other
CCI Shareholder,  the spouse of a CCI Shareholder,  or a lineal  descendant of a
CCI  Shareholder (or a trust for the primary benefit of any one or more of a CCI
Shareholder,  the spouse of a CCI Shareholder,  or a lineal  descendant of a CCI
Shareholder  or a  partnership  or limited  liability  company owned and managed
solely by one or more CCI  Shareholders,  spouses of CCI Shareholders and lineal
descendants of CCI Shareholders), or, in the case of a CCI Shareholder that is a
trust,  to any  beneficiary of such trust (or a trust for the primary benefit of
such beneficiary or a partnership or limited liability company owned and managed
solely by one or more CCI  Shareholders,  spouses of CCI Shareholders and lineal
descendants of CCI  Shareholders),  in each case provided that (i) such transfer
is  done  in  accordance  with  the  transfer  restrictions  applicable  to such
Securities  under  federal  and state  securities  laws and (ii) the  transferee
agrees to be bound by the terms hereof as a Principal  Stockholder  with respect
to the shares being transferred  pursuant to this Section, and any such transfer
shall not  constitute a "Transfer"  for purposes of this Agreement (any such CCI
transferee pursuant to this proviso, a "CCI Permitted Transferee"). In the event
that the  Board  of  Directors  consents  to any  Transfer  of  Securities  by a
Principal  Stockholder  pursuant  to  the  written  request  of  such  Principal
Stockholder (a "Transferring  Stockholder") and except as otherwise  provided in
Section  3.1(b)  and  Section  3.2,  each  other  Principal  Stockholder  shall,


                                      -5-
<PAGE>


notwithstanding  the  provisions  of this  Section  3.1(a),  have  the  right to
Transfer a percentage  of the total number of Securities  beneficially  owned by
such  Principal  Stockholder  equal to the  percentage  of the  total  number of
Securities beneficially owned by the Transferring  Stockholder that the Board of
Directors has consented may be Transferred by such Transferring Stockholder. The
parties  acknowledge that any Transfer  pursuant to this Section 3.1(a) to which
the Board of Directors has consented may be in connection with, or as part of, a
private  placement  by the  Company  of,  or other  transaction  involving,  its
Securities.

       (b) In addition to the provisions of Section  3.1(a),  commencing for the
quarter ending  December 31, 1998 and ending on the  Expiration  Date, the Board
shall  determine  prior to the  public  release  of the  Company's  consolidated
financial results with respect to the end of each financial  reporting  quarter,
the aggregate  number,  if any, of shares of Class A Common Stock (not to exceed
in the aggregate one hundred fifty thousand  (150,000)  shares of Class A Common
Stock per quarter,  subject to  adjustment  pursuant to Section 5.1) that may be
Transferred by the Principal  Stockholders  (the "Transfer  Amount")  during the
period commencing on the third (3rd) business day and ending on the twenty-third
(23rd) business day following such public release of the Company's  quarterly or
annual financial results or such other trading period designated or permitted by
the Board with  respect to the purchase  and sale of its  Securities  (each such
period, a "Transfer Period").  Notwithstanding the provisions of Section 3.1(a),
each Principal  Stockholder  shall be entitled to Transfer  during each Transfer
Period,  provided such Transfer is effected in  accordance  with all  applicable
federal and state  securities  laws,  a number of shares of Class A Common Stock
equal to thirty-three and one-third percent (33 1/3%) of the Transfer Amount, if
any,  for such  Transfer  Period  (rounding  down in the case of any  fractional
amount). Any portion of any Principal Stockholder's share of the Transfer Amount
that such Principal  Stockholder elects not to transfer during a Transfer Period
shall be  reallocated  equally among the remaining  Principal  Stockholders  who
intend to Transfer  shares of Class A Common Stock during such Transfer  Period,
and such  remaining  Principal  Stockholders  shall be entitled to Transfer such
additional  shares of Class A Common Stock during the Transfer Period,  provided
such Transfer is effected in accordance  with all  applicable  federal and state
securities  laws. In no event shall any portion of a Transfer Amount that is not
utilized by a Principal  Stockholder  during a Transfer Period be reallocated or
otherwise credited to any subsequent  Transfer Periods.  The parties acknowledge
that the Company has determined that the Transfer Amount that may be Transferred
by the Principal  Stockholders  during the Transfer Period for the quarter ended
September 30, 1998 pursuant to this Section  3.1(b) shall be an aggregate of one
hundred fifty thousand (150,000) shares of Class A Common Stock.

       (c) Commencing for the quarter ending December 31, 1998 and ending on the
Expiration  Date,  the  Company  shall give each  Principal  Stockholder  prompt
written  notice  (in any  event no  later  than  fifty  (50)  days  prior to the


                                      -6-
<PAGE>

beginning  of  the  applicable  Transfer  Period)  of its  determination  of any
Transfer Amount.  Within seven (7) days of receipt of such notice, any Principal
Stockholder  that desires to Transfer shares of Class A Common Stock during such
Transfer  Period  pursuant to Section 3.1(b) shall provide written notice to the
Company of the number of shares such Principal  Stockholder desires to Transfer.
Not later than seven (7) days after receipt of such responses, the Company shall
notify all  remaining  Principal  Stockholders  of any  Principal  Stockholder's
election not to Transfer the total number of shares of Class A Common Stock that
such Principal  Stockholder is entitled to Transfer during such Transfer Period.
Any Principal  Stockholder that desires to Transfer additional shares of Class A
Common Stock equal to all or part of the remaining  Transfer Amount shall notify
the Company within seven (7) days of receipt of the Company's second notice. The
Company shall  allocate the  remaining  Transfer  Amount in accordance  with the
provisions  of  Section  3.1(b)  and  shall  notify  the  appropriate  Principal
Stockholders  of such  allocation  no  later  than ten  (10)  days  prior to the
beginning of the Transfer Period.

       (d)  For  purposes  of  this  Section  3.1,  Lumpkin  and  all of the CCI
Shareholders shall be deemed to be a single Principal Stockholder.

       3.2    Registration Rights

       (a) In the event that the Board of Directors consents pursuant to Section
3.1(a) to a Principal  Stockholder's  request for a Transfer  and in  connection
therewith,  the  Company  agrees to  register  Securities  with  respect to such
Transfer under the Securities  Act of 1933, as amended (the  "Securities  Act"),
the  Company  shall  grant  each other  Principal  Stockholder  the  opportunity
(subject to reduction in the event the registered  Transfer is  underwritten) to
register for Transfer  under the Securities Act a percentage of the total number
of Securities  beneficially  owned by such  Principal  Stockholder  equal to the
percentage  of  the  total  number  of  Securities  beneficially  owned  by  the
Transferring  Stockholder that such Transferring  Stockholder is registering for
Transfer  under the  Securities  Act,  on the same terms and  conditions  as the
Transferring Stockholder (each Principal Stockholder registering,  or indicating
a desire to register,  any  Securities  for Transfer  under the  Securities  Act
pursuant to this Section 3.2 being a "Registering Transferor").

       (b) To the extent that the Company  grants  pursuant to Section  3.1(b) a
Principal Stockholder the opportunity to register shares of Class A Common Stock
for  Transfer  under the  Securities  Act,  the  Company  shall grant each other
Principal  Stockholder  the  opportunity  (subject to reduction in the event the
registered  Transfer is  underwritten)  to register an equal number of shares of
Class A Common Stock for Transfer under the Securities Act on the same terms and
conditions.

       (c) In the event the Company  proposes to register  any shares of Class A
Common  Stock  under the  Securities  Act  pursuant to an  underwritten 


                                      -7-
<PAGE>

primary offering (other than pursuant to a registration statement on Form S-4 or
Form S-8 or any successor forms thereto or other form which would not permit the
inclusion of the shares of Class A Common Stock of the Principal  Stockholders),
the Company, as determined by the Board of Directors,  shall give written notice
to all Principal  Stockholders  of its intention to effect such a  registration.
Following any such notice,  the Board of Directors  shall undertake to determine
the  aggregate  number,  if any,  of shares of Class A Common  Stock held by the
Principal  Stockholders  (not to exceed in the  aggregate  on a per year basis a
number of shares of Class A Common Stock equal to fifteen  percent  (15%) of the
total  number  of  shares  of Class A  Common  Stock  beneficially  owned by the
Principal  Stockholders as of December 31, 1998, subject to adjustment  pursuant
to Section 5.1) to be registered by the Company  under the  Securities  Act (the
"Registrable  Amount") for Transfer by the Principal  Stockholders in connection
with such offering. If the Board determines to register shares of Class A Common
Stock held by the Principal  Stockholders  pursuant to this Section 3.2(c),  the
Company will promptly give written notice of such determination to all Principal
Stockholders, and thereupon the Company will use commercially reasonable efforts
to effect the  registration of that portion of the  Registrable  Amount that the
Registering  Transferors  indicate  a  desire  to  register.  In the  event  the
Registering  Transferors  indicate  a desire to  register  a number of shares of
Class A Common Stock that, in the aggregate, exceeds the Registrable Amount, the
number of shares of Class A Common Stock that each Registering  Transferor shall
be entitled to register  shall be reduced to the extent such number exceeds such
Registering Transferor's pro rata share of the Registrable Amount based upon the
ratio of the total number of Securities  beneficially  owned by such Registering
Transferor to the total number of Securities beneficially owned by all Principal
Shareholders.  To the  extent  any  portion of the  Registrable  Amount  remains
unallocated after such reductions, each Registering Transferor who has indicated
a desire to register additional shares of Class A Common Stock shall be entitled
to  register  an  additional  amount  of  Class A  Common  Stock  equal  to such
Registering  Transferor's pro rata portion of the remaining  Registrable  Amount
based upon the ratio of the total  number of  Securities  beneficially  owned by
such Registering Transferor to the total number of Securities beneficially owned
by  all  Registering  Transferors  who  have  indicated  a  desire  to  register
additional shares of Class A Common Stock. The reallocation  procedure described
in the preceding  sentence shall be repeated until the entire Registrable Amount
is allocated. All terms, conditions and rights with respect to such registration
(including  but not  limited  to any  determination  to reduce  the  Registrable
Amount) shall be determined by the Board,  provided that (i) the representations
and  warranties  of a  Principal  Stockholder  shall be  customary  taking  into
account,  among other  things,  the nature of the  offering  and such  Principal
Stockholder's  relationship  with the  Company,  and (ii) the  Company  shall be
responsible  for all  expenses  with  respect  to such  registration  other than
underwriting  discounts and commissions allocable to the Class A Common Stock of
the Registering Transferors,  which underwriting discounts and commissions shall
be the responsibility of the Registering Transferors.



                                      -8-
<PAGE>

       (d) In addition to the  registration  rights granted pursuant to Sections
3.2(a),  (b) and (c), no more  frequently  than once during each of the calendar
years  ending  December  31,  1999,  2000 and 2001 (each  such year,  an "Annual
Period"),  and upon either (i) the  receipt of a written  request of one or more
Principal  Stockholders or (ii) a determination  by the Board of Directors,  the
Board shall undertake to determine the Registrable  Amount, if any, for Transfer
by the Principal  Stockholders.  If the Board  determines to register  shares of
Class A Common Stock held by the Principal Stockholders pursuant to this Section
3.2(d),  the Company will promptly give written notice of such  determination to
all Principal  Stockholders,  and  thereupon  the Company will use  commercially
reasonable efforts to effect the registration of that portion of the Registrable
Amount that the Registering  Transferors  indicate a desire to register.  In the
event the  Registering  Transferors  indicate  a desire to  register a number of
shares of Class A Common Stock that, in the aggregate,  exceeds the  Registrable
Amount,  the  number  of shares of Class A Common  Stock  that each  Registering
Transferor  shall be entitled  to  register  shall be reduced to the extent such
number exceeds such  Registering  Transferor's pro rata share of the Registrable
Amount based upon the ratio of the total number of Securities beneficially owned
by such  Registering  Transferor to the total number of Securities  beneficially
owned  by  all  Principal  Stockholders.  To  the  extent  any  portion  of  the
Registrable Amount remains  unallocated after such reductions,  each Registering
Transferor who has indicated a desire to register  additional  shares of Class A
Common  Stock shall be entitled  to  register  an  additional  amount of Class A
Common  Stock equal to such  Registering  Transferor's  pro rata  portion of the
remaining  Registrable  Amount  based  upon the  ratio of the  total  number  of
Securities beneficially owned by such Registering Transferor to the total number
of  Securities  beneficially  owned  by all  Registering  Transferors  who  have
indicated a desire to register  additional  shares of Class A Common Stock.  The
reallocation  procedure  described in the preceding  sentence  shall be repeated
until the entire  Registrable  Amount is allocated.  All terms,  conditions  and
rights  with  respect to such  registration  (including  but not  limited to any
determination  to reduce the  Registrable  Amount)  shall be  determined  by the
Board,  provided  that (i) the  representations  and  warranties  of a Principal
Stockholder  shall be customary  taking into account,  among other  things,  the
nature of the offering and such Principal  Stockholder's  relationship  with the
Company, and (ii) the Company shall be responsible for all expenses with respect
to such registration  other than underwriting  discounts and commissions,  which
underwriting  discounts  and  commissions  shall  be the  responsibility  of the
Registering Transferors.

       (e) If the Board  establishes  a  committee  (a "Pricing  Committee")  to
authorize  and  approve  the  price  and any  other  terms  of any  Transfer  of
Securities  registered  under the Securities Act pursuant to this Section 3.2 in
which  Lumpkin  or  any  CCI  Shareholder  is  participating  as  a  Registering
Transferor,  the  Company  will use its best  efforts  to  cause  Lumpkin  to be
nominated to such Pricing

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<PAGE>

Committee.  Notwithstanding any other provision of this Agreement, to the extent
the Company has undertaken to register Securities of the Principal  Stockholders
pursuant to this  Section  3.2, the Company may  subsequently  determine  not to
register such  Securities  and may either not file a  registration  statement or
otherwise  withdraw or abandon a registration  statement  previously  filed with
respect to the registration of such Securities.

       (f)  For  purposes  of  this  Section  3.2,  Lumpkin  and  all of the CCI
Shareholders shall be deemed to be a single Principal Stockholder.


4.     REPRESENTATIONS AND WARRANTIES


    4.1 Representations and Warranties of Non-individual Stockholders

       Each non-individual Principal Stockholder hereby represents and warrants,
as of the date of this  Agreement,  to the Company  and to each other  Principal
Stockholder as follows:

       4.1.1  Authorization

       Such Principal Stockholder has taken all action necessary for it to enter
into this Agreement and to consummate the transactions contemplated hereby.

       4.1.2  Binding Obligation

       This  Agreement  constitutes  a  valid  and  binding  obligation  of such
Principal  Stockholder,  enforceable in accordance with its terms, except to the
extent that such  enforceability may be limited by bankruptcy,  insolvency,  and
similar laws  affecting the rights and remedies of creditors  generally,  and by
general principles of equity and public policy; and each document and instrument
to be executed by such Principal  Stockholder pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of such Principal  Stockholder,  enforceable  in accordance  with its
terms (with the aforesaid exceptions).


   4.2 Representations and Warranties of Individual Stockholders

       Each Principal  Stockholder  who is an individual  hereby  represents and
warrants,  as of the date of this  Agreement,  to the  Company and to each other
Principal Stockholder as follows:

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<PAGE>

       4.2.1  Power and Authority

       Such Principal Stockholder has the legal capacity and all other necessary
power and authority necessary to enter into this Agreement and to consummate the
transactions contemplated hereby.

       4.2.2  Binding Obligation

       This  Agreement  constitutes  a  valid  and  binding  obligation  of such
Principal  Stockholder,  enforceable in accordance with its terms, except to the
extent that such  enforceability may be limited by bankruptcy,  insolvency,  and
similar laws  affecting the rights and remedies of creditors  generally,  and by
general principles of equity and public policy; and each document and instrument
to be executed by such Principal  Stockholder pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of such Principal  Stockholder,  enforceable  in accordance  with its
terms (with the aforesaid exceptions).


   4.3 Representations and Warranties of the Company

       The  Company  hereby  represents  and  warrants,  as of the  date of this
Agreement, to each Principal Stockholder as follows:

       4.3.1 Authorization

       The Company has taken all corporate action necessary for it to enter into
this Agreement and to consummate the transactions contemplated hereby.

       4.3.2 Binding Obligation

       This Agreement constitutes a valid and binding obligation of the Company,
enforceable  in  accordance  with its  terms,  except  to the  extent  that such
enforceability  may be limited  by  bankruptcy,  insolvency,  and  similar  laws
affecting  the  rights  and  remedies  of  creditors  generally,  and by general
principles of equity and public  policy;  and each document and instrument to be
executed  by the  Company  pursuant  hereto,  when  executed  and  delivered  in
accordance with the provisions  hereof,  shall be a valid and binding obligation
of the Company,  enforceable  in  accordance  with its terms (with the aforesaid
exceptions).


5.   MISCELLANEOUS

   5.1      Effect of Changes in Capitalization

       All share  amounts of the  Company's  capital  stock  referred to in this
Agreement  shall  be   appropriately   and   proportionally   adjusted  for  any


                                      -11-
<PAGE>

recapitalization,  reclassification,  stock  split-up,  combination  of  shares,
exchange  of shares,  stock  dividend or other  distribution  payable in capital
stock, or other increase or decrease in such shares effected  without receipt of
consideration by the Company, occurring after the date of this Agreement.

       5.2    Additional Actions and Documents

       Each of the  parties  hereto  hereby  agrees to take or cause to be taken
such  further  actions,  to execute,  deliver and file or cause to be  executed,
delivered and filed such further  documents and instruments,  and to obtain such
consents,  as may be  necessary  or as may be  reasonably  requested in order to
fully effectuate the purposes,  terms and conditions of this Agreement,  whether
before, at or after the effective time of this Agreement.

       5.3    Entire Agreement; Amendment

       This Agreement  constitutes the entire agreement among the parties hereto
as of the date hereof with respect to the matters  contemplated  herein,  except
with respect to Sections 1.1, 1.2.1,  1.2.2,  1.2.3 and to the extent applicable
Section 1.2.4 of the Original  Stockholders'  Agreement  which Sections shall be
superseded  on the terms  contemplated  hereby  with  respect  to the rights and
obligations of the parties hereto amongst each other as of the Voting  Agreement
Effective Date. No amendment,  modification or discharge of this Agreement shall
be valid or binding  unless set forth in writing and duly  executed by the party
against whom enforcement of the amendment, modification, or discharge is sought.

       5.4    Limitation on Benefit

       It is the  explicit  intention  of the  parties  hereto that no person or
entity other than the parties hereto is or shall be entitled to bring any action
to enforce any provision of this  Agreement  against any of the parties  hereto,
and the covenants, undertakings and agreements set forth in this Agreement shall
be solely for the  benefit  of, and shall be  enforceable  only by, the  parties
hereto or their respective successors, heirs, executors,  administrators,  legal
representatives and permitted assigns.

       5.5    Binding Effect; Specific Performance

       This  Agreement  shall be binding  upon and shall inure to the benefit of
the  parties  hereto  and  their  respective   successors,   heirs,   executors,
administrators,  legal  representatives  and permitted  assigns.  No party shall
assign this Agreement  without the written  consent of the other parties hereto;
and such consent shall not be  unreasonably  withheld.  The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance 

                                      -12-
<PAGE>

with the  terms  hereof  and that the  parties  shall be  entitled  to  specific
performance  of the terms  hereof,  in addition to any other remedy at law or in
equity.

       5.6    Governing Law

       This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes  relating  thereto,  shall be governed  by and  construed  in
accordance  with  the  laws of  Delaware  (excluding  the  choice  of law  rules
thereof).

       5.7    Notices

       All notices,  demands,  requests, or other communications which may be or
are  required  to be given,  served,  or sent by any  party to any  other  party
pursuant to this Agreement  shall be in writing and shall be  hand-delivered  or
mailed by first-class,  registered or certified mail, return receipt  requested,
postage prepaid, or transmitted by telegram, telecopy, facsimile transmission or
telex, addressed as follows:

              (i)    If to the Company or to the McLeods:

                     McLeodUSA Incorporated
                     McLeodUSA Technology Park
                     6400 C Street, SW, P.O. Box 3177
                     Cedar Rapids, IA  52406-3177
                     Attention:  Randall Rings
                     Facsimile:  (319) 298-7901

              (ii)   If to IES:

                     IES Investments Inc.
                     200 1st Street SE
                     Cedar Rapids, IA 52401
                     Attention:  James E. Hoffman
                     Facsimile:  (319) 398-4204

              (iii)  If to Lumpkin or any CCI Shareholder:

                     P.O. Box 1234
                     Mattoon, IL  61938
                     Attention:  Richard A. Lumpkin
                     Facsimile:  (217) 234-9934


                                      -13-
<PAGE>



                     with a copy to :

                     Schiff Hardin & Waite
                     6600 Sears Tower
                     Chicago, Illinois  60606
                     Attention:  David R. Hodgman, Esq.
                     Facsimile:  (312) 258-5600


       Each party may  designate by notice in writing a new address to which any
notice,  demand,  request or communication may thereafter be so given, served or
sent.  Each  notice,   demand,   request,   or  communication   which  shall  be
hand-delivered,  mailed,  transmitted,  telecopied  or  telexed  in  the  manner
described  above, or which shall be delivered to a telegraph  company,  shall be
deemed sufficiently given,  served, sent, received or delivered for all purposes
at such time as it is delivered to the addressee (with the return  receipt,  the
delivery receipt, or the answerback being deemed conclusive,  but not exclusive,
evidence  of such  delivery)  or at such  time as  delivery  is  refused  by the
addressee upon presentation.


       5.8    Termination

       Notwithstanding  any other  provision  of this  Agreement,  if during any
Annual Period the Board of Directors has not provided a Principal  Stockholder a
reasonable  opportunity  to  Transfer  Securities  pursuant  to  Section  3.2 or
consented  to the written  request of such  Principal  Stockholder  or otherwise
provided such Principal Stockholder a reasonable  opportunity to Transfer (other
than a transfer by a CCI Shareholder to a CCI Permitted  Transferee) pursuant to
Section  3.1(a) an  aggregate  number of shares of Class A Common Stock equal to
not less than  fifteen  percent  (15%) of the total  number of shares of Class A
Common Stock beneficially owned by such Principal Stockholder as of December 31,
1998,  subject to  adjustment  pursuant  to  Section  5.1,  then such  Principal
Stockholder may terminate this Agreement as it applies to such terminating party
by providing  written  notice of  termination to all other parties no later than
ten (10) business days  following the end of such Annual  Period,  such that all
rights and obligations  hereunder shall cease, and this Agreement shall be of no
further force or effect, with respect to the terminating party. Unless otherwise
previously  terminated  by the Principal  Stockholders  pursuant to this Section
5.8, this Agreement shall terminate on the Expiration Date. For purposes of this
Section  5.8,  Lumpkin and all of the CCI  Shareholders  shall be deemed to be a
single Principal Stockholder.

       5.9    Publicity

       Each of the Principal  Stockholders  will use its reasonable best efforts
to consult  with the  Company  prior to issuing  any press  release,  making any
filing


                                      -14-
<PAGE>

with any governmental entity or national securities exchange or making any other
public  dissemination of information by such Principal  Stockholder within which
this Agreement or the contents hereof are referenced or described.

       5.10   Appointment of Representative

       Each of the CCI  Shareholders  hereby  appoints  Lumpkin,  with  power of
substitution,  as its  exclusive  agent to act on its behalf with respect to any
and all actions to be taken under or amendments or  modifications  to be made to
this Agreement (the  "Representative").  The Representative  shall take, and the
CCI Shareholders agree that the  Representative  shall take, any and all actions
which  the  Representative  believes  are  necessary  or  advisable  under  this
Agreement for and on behalf of each of the CCI Shareholders, as fully as if each
of the CCI  Shareholders  were  acting  on its own  behalf,  including,  without
limitation,  dealing with the Company and the other parties  hereto with respect
to all matters  arising  under this  Agreement,  entering  into any amendment or
modification to this Agreement deemed advisable by the Representative and taking
any and all other actions  specified in or contemplated  by this Agreement.  The
Company  and the  other  parties  hereto  shall  have the right to rely upon all
actions taken or not taken by the Representative pursuant to this Agreement, all
of which  actions or  omissions  shall be legally  binding  upon each of the CCI
Shareholders.

       5.11   Execution in Counterparts

       To  facilitate  execution,  this  Agreement  may be  executed  in as many
counterparts  as may be  required;  and it  shall  not  be  necessary  that  the
signatures  of, or on behalf  of,  each  party,  or that the  signatures  of all
persons required to bind any party, appear on each counterpart;  but it shall be
sufficient  that the  signature  of, or on behalf of,  each  party,  or that the
signatures of the persons  required to bind any party,  appear on one or more of
the  counterparts.  All  counterparts  shall  collectively  constitute  a single
agreement.  It shall not be  necessary  in  making  proof of this  Agreement  to
produce  or  account  for more  than a number  of  counterparts  containing  the
respective signatures of, or on behalf of, all of the parties hereto.


                                      -15-
<PAGE>


       IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement,  or have caused this  Agreement to be duly  executed and delivered on
their behalf, as of the day and year first hereinabove set forth.



MCLEODUSA INCORPORATED                            IES INVESTMENTS INC.


By:  /s/ J. Lyle Patrick                          By:  /s/ James E. Hoffman     
     Name:  J. Lyle Patrick                           Name:  James E. Hoffman
     Title: Group Vice President,                    Title:  President
            Chief Financial Officer and
            Treasurer

    /s/  Clark E. McLeod                              /s/  Mary E. McLeod       
Clark E. McLeod                                   Mary E. McLeod


   /s/  Richard A. Lumpkin                            /s/  Gail G. Lumpkin      
Richard A. Lumpkin                                Gail G. Lumpkin


Margaret Lumpkin Keon Trust                       Mary Lee Sparks Trust
dated May 13, 1978                                dated May 13, 1978


   /s/  Margaret Lumpkin Keon                         /s/  Mary Lee Sparks      
Margaret Lumpkin Keon, as Trustee                 Mary Lee Sparks, as Trustee


                                                      /s/  Steve L. Grissom     
                                                  Steven L. Grissom, as Trustee

    /s/  Mary Lee Sparks                     
Mary Lee Sparks


                                      -16-
<PAGE>







The twelve trusts  created  under the Mary Green  Lumpkin Gallo Trust  Agreement
dated December 29, 1989 one for the benefit of each of:
      Joseph John Keon III,  Katherine  Stoddert Keon, Lisa Anne Keon,  Margaret
      Lynley Keon,  Pamela Keon Vitale,  Susan Tamara Keon DeWyngaert,  Benjamin
      Iverson Lumpkin,  Elizabeth Arabella Lumpkin, Anne Romayne Sparks, Barbara
      Lee Sparks, Christina Louise Sparks, and John Woodruff Sparks


Bank One, Texas, N.A., Trustee

         /s/ Frank A. Glispin               
By:  Frank A. Glispin, Vice President       




The twelve trusts  created  under the Richard  Adamson  Lumpkin  Grandchildren's
Trust dated September 5, 1980, one for the benefit of each of:
      Joseph John Keon III,  Katherine  Stoddert Keon, Lisa Anne Keon,  Margaret
      Lynley Keon,  Pamela Keon Vitale,  Susan Tamara Keon DeWyngaert,  Benjamin
      Iverson Lumpkin,  Elizabeth Arabella Lumpkin, Anne Romayne Sparks, Barbara
      Lee Sparks, Christina Louise Sparks, and John Woodruff Sparks

Bank One, Texas, N.A., Trustee

         /s/ Frank A. Glispin               
By:  Frank A. Glispin, Vice President       


                                      -17-
<PAGE>


The three trusts  established by Richard  Adamson  Lumpkin under Trust Agreement
dated February 6, 1970, one for the benefit of each of:
      Richard Anthony Lumpkin,
      Margaret Anne Keon, and
      Mary Lee Sparks

Bank One, Texas, N.A., Trustee

/s/ Frank A. Glispin                                 
By: Frank A. Glispin, Vice President                 

The twelve 1990 Personal Income Trusts established by Margaret L. Keon, Mary Lee
Sparks,  and Richard A. Lumpkin,  each dated April 20, 1990, one for the benefit
of each of:
      Joseph John Keon III,  Katherine  Stoddert Keon, Lisa Anne Keon,  Margaret
      Lynley Keon,  Pamela Keon Vitale,  Susan Tamara Keon DeWyngaert,  Benjamin
      Iverson Lumpkin,  Elizabeth Arabella Lumpkin, Anne Romayne Sparks, Barbara
      Lee Sparks, Christina Louise Sparks, and John Woodruff Sparks

   /s/  David R. Hodgman                             
David R. Hodgman, Trustee

   /s/  Steve L. Grissom                             
Steven L. Grissom, Trustee


                                      -18-
<PAGE>


                                   SCHEDULE I


Richard A. Lumpkin

Gail G. Lumpkin

Margaret  Lumpkin Keon,  as Trustee under the Margaret  Lumpkin Keon Trust dated
May 13, 1978

Mary Lee Sparks and Steven L. Grissom,  as Trustees of the Mary Lee Sparks Trust
dated May 13, 1978

Bank One,  Texas,  N.A., as Trustee of the twelve trusts  created under the Mary
Green Lumpkin Gallo Trust Agreement dated December 29, 1989, one for the benefit
of each of Joseph  John Keon  III,  Katherine  Stoddert  Keon,  Lisa Anne  Keon,
Margaret Lynley Keon, Pamela Keon Vitale, Susan Tamara Keon DeWyngaert, Benjamin
Iverson Lumpkin,  Elizabeth Arabella Lumpkin,  Anne Romayne Sparks,  Barbara Lee
Sparks, Christina Louise Sparks, and John Woodruff Sparks

Bank One, Texas, N.A., as Trustee of the twelve trusts created under the Richard
Adamson  Lumpkin  Grandchildren's  Trust dated  September  5, 1980,  one for the
benefit of each of Joseph  John Keon III,  Katherine  Stoddert  Keon,  Lisa Anne
Keon,  Margaret Lynley Keon,  Pamela Keon Vitale,  Susan Tamara Keon DeWyngaert,
Benjamin  Iverson  Lumpkin,  Elizabeth  Arabella  Lumpkin,  Anne Romayne Sparks,
Barbara Lee Sparks, Christina Louise Sparks, and John Woodruff Sparks

Bank One,  Texas,  N.A., as Trustee of the three trusts  established  by Richard
Adamson  Lumpkin under the Trust  Agreement  dated February 6, 1970, one for the
benefit of each of Richard  Anthony  Lumpkin,  Margaret Anne Keon,  and Mary Lee
Sparks

David R. Hodgman and Steven L. Grissom,  as Trustees of the twelve 1990 Personal
Income Trusts  established by Margaret L. Keon, Mary Lee Sparks,  and Richard A.
Lumpkin,  each dated April 20, 1990,  one for the benefit of each of Joseph John
Keon III, Katherine Stoddert Keon, Lisa Anne Keon,  Margaret Lynley Keon, Pamela
Keon Vitale, Susan Tamara Keon DeWyngaert,  Benjamin Iverson Lumpkin,  Elizabeth
Arabella  Lumpkin,  Anne Romayne Sparks,  Barbara Lee Sparks,  Christina  Louise
Sparks, and John Woodruff Sparks


                                      -19-