Document:

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                                                                    EXHIBIT 4.46

                                                                  EXECUTION COPY

                    WAIVER dated as of August 29, 2001 (this "Waiver"), to the
                    Credit Agreement (the "Credit Agreement") dated as of
                    May 31, 2000, as amended pursuant to a First Amendment dated
                    as of December 7, 2000 and a Second Amendment dated as of
                    January 11, 2001, among McLEODUSA INCORPORATED, a Delaware
                    corporation (the "Borrower"); the lenders party thereto (the
                    "Lenders"); THE CHASE MANHATTAN BANK, a New York banking
                    corporation, as administrative agent (in such capacity, the
                    "Administrative Agent") and as collateral agent (in such
                    capacity, the "Collateral Agent"); Salomon Smith Barney
                    Inc., as syndication agent (in such capacity, the
                    "Syndication Agent"); and Bank of America, N.A. and Goldman
                    Sachs Credit Partners L.P., as co-documentation agents (in
                    such capacities, the "Co-Documentation Agents").

     The Borrower has requested that the Lenders waive certain provisions of the
Credit Agreement, and the Lenders are willing so to waive such provisions on the
terms and subject to the conditions set forth herein. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.

     Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION 1.  Waiver of Section 6.09(a).  Pursuant to Section 9.02(b) of the
                 -------------------------
Credit Agreement, the undersigned Required Lenders and the Borrower hereby waive
the provisions of Section 6.09(a) of the Credit Agreement to the extent (but
only to the extent) necessary to permit the Borrower to issue (i) 275,000 shares
of the Borrower's Series D Preferred Stock, par value $0.01 per share, in
exchange for and in cancellation of 275,000 shares of Series B Preferred Stock
and (ii) 125,000 shares of the Borrower's Series E Preferred Stock, par value
$0.01 per share, in exchange for and in cancellation of, 125,000 shares of
Series C Preferred Stock, pursuant to a Stock Purchase Agreement dated as of
August 29, 2001 among the Borrower and certain purchasers named therein.

     SECTION 2.  Representations and Warranties.  To induce the other parties
                 ------------------------------
hereto to enter into this Waiver, the Borrower represents and warrants to each
of the Lenders, the Administrative Agent and the Collateral Agent that, as of
the Waiver Effective Date:

     (a)  The representations and warranties set forth in Article III of the
Credit Agreement are true and correct in all material respects on and as of the
Waiver Effective Date with the same effect as though made on and as of the
Waiver Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date.

     (b)  After giving effect to the agreements and waivers herein, no Default
or Event of Default has occurred and is continuing.
<PAGE>

     SECTION 3.  Effectiveness.  This Waiver shall become effective on the date
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(the "Waiver Effective Date") that the Administrative Agent shall have received
counterparts of this Waiver that, when taken together, bear the signatures of
the Borrower and the Required Lenders.

     SECTION 4.  Effect of Waiver.  Except as expressly set forth herein, this
                 ----------------
Waiver shall not by implication or otherwise limit, impair, constitute a waiver
of or otherwise affect the rights and remedies of the Lenders, the
Administrative Agent or the Collateral Agent under the Credit Agreement or any
other Loan Document, and shall not alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other provision of the Credit Agreement or any other
Loan Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle the
Borrower to a consent to, or a waiver, amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained
in the Credit Agreement or any other Loan Document in similar or different
circumstances. This Waiver shall apply and be effective only with respect to the
provisions of the Credit Agreement specifically referred to herein.

     SECTION 5.  Counterparts.  This Waiver may be executed in any number of
                 ------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Delivery
of any executed counterpart of a signature page of this Waiver by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.

     SECTION 6.  Applicable Law.  THIS WAIVER SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 7.  Headings.  The headings of this Waiver are for purposes of
                 --------
reference only and shall not limit or otherwise affect the meaning hereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed by their duly authorized officers, all as of the date and year first
above written.

                              McLEODUSA INCORPORATED

                                 by
                                   -----------------------------------------
                                   Name:
                                   Title:

                              Acknowledgement and Agreed:

                              EACH OF THE SUBSIDIARIES
                              LISTED AS SUBSIDIARY GUARANTORS
                              ON SCHEDULE I TO THE
                              SUBSIDIARY GUARANTEE AGREEMENT,

                                 by
                                   -----------------------------------------
                                   Name:
                                   Title:  Authorized Officer
<PAGE>

                              THE CHASE MANHATTAN BANK,
                              individually and as Agent

                                 by
                                   -----------------------------------------
                                   Name:
                                   Title:

                              Name of Institution:
                                                  --------------------------

                                 by
                                   -----------------------------------------
                                   Name:
                                   Title:<PAGE>

                                                                    EXHIBIT 4.47

                        FORM OF SERIES D PREFERRED STOCK

                                FACE OF SECURITY

Series D Preferred Stock                                Series D Preferred Stock

Number                                                  Shares

                         [McLeodUSA Incorporated logo]

Incorporated under the laws of                          See Reverse for Certain
the State of Delaware                                   Definitions and
                                                        Restrictions

                                                        CUSIP 582266 50 8

                                    SERIES D
                          CONVERTIBLE PREFERRED STOCK
                          (PAR VALUE $0.01 PER SHARE)
                  (LIQUIDATION PREFERENCE $2,500.00 PER SHARE)

This certifies that

Is the registered owner of

             FULLY PAID AND NON-ASSESSABLE PREFERRED SECURITIES OF
                             McLeodUSA Incorporated
designated the Series D Convertible Preferred Stock (par value $0.01 per share)
(liquidation preference $2,500.00 per share) (the "Series D Preferred Stock").
The shares of Series D Preferred Stock are transferable on the books and records
of the Registrar, in person or by a duly authorized attorney, upon surrender of
this certificate duly endorsed and in proper form for transfer. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Series D Preferred Stock represented hereby are issued and
shall in all respects be subject to the provisions of the Certificate of
Designation of the Powers, Preferences and Relative, Participating, Optional and
other Special Rights of Series D Convertible Preferred Stock and Qualifications,
Limitations and Restrictions thereof dated September 30, 2001, as the same may
be amended from time to time (the "Certificate of Designation").  Capitalized
terms used herein but not defined shall have the meaning given them in the
Certificate of Designation.  The Company will provide a copy of the Certificate
of Designation to a Holder without charge upon written request to the Company at
its principal place of business.
<PAGE>

Reference is hereby made to select provisions of the Series D Preferred Stock
set forth on the reverse hereof, and to the Certificate of Designation, which
select provisions and the Certificate of Designation shall for all purposes have
the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of
Designation and is entitled to the benefits thereunder.

This certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.

WITNESS the facsimile signatures of the duly authorized officers of the Company.

Dated:

McLeodUSA Incorporated

/s/ Randall Rings, Secretary

/s/ Clark E. McLeod, Chairman
<PAGE>

                              REVERSE OF SECURITY

                             McLeodUSA Incorporated

          The shares of Series D Preferred Stock evidenced by this certificate
shall be redeemable as provided in the Certificate of Designation and the
Company's Amended and Restated Certificate of Incorporation. The shares of
Series D Preferred Stock evidenced by this certificate shall be convertible into
the Company's Class A Common Stock in the manner and according to the terms set
forth in the Certificate of Designation.

          The company is authorized to issue more than one class or series of
stock.  As required under Delaware law, the Company shall furnish to any Holder
upon request and without charge, a full summary statement of the designations,
voting rights, preferences, limitations and special rights of the shares of each
class or series authorized to be issued by the Company so far as they have been
fixed and determined and the authority of the Board of Directors to fix and
determine the designations, voting rights, preferences, limitations and special
rights of the classes and series of securities of the Company.

          The shares of Series D Preferred Stock represented by this certificate
have not been registered under the Securities Act of 1933, as amended (the "1933
Act"), or under any applicable state laws. The shares of Series D Preferred
Stock represented by this certificate have been acquired by the registered owner
hereof for investment and not with a view to or for sale in connection with any
distribution thereof within the meaning of the 1933 Act.  The shares may not be
sold, pledged, transferred or assigned except in a transaction which is exempt
under the provisions of the 1933 Act or any applicable state securities laws, or
pursuant to an effective registration statement or in a transaction otherwise in
compliance with applicable federal and state securities laws.

          The sale, pledge, transfer, assignment or other disposition of the
shares of Series D Preferred Stock represented by this certificate is restricted
by and subject to the provisions of a Stock Purchase Agreement dated as of
September 30, 2001, a copy of which is available upon request for inspection at
the offices of the Company.  Any such request should be addressed to the
Secretary of the Company.

          The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as through they were written out in full
according to applicable laws or regulations:

          TEN COM --   as tenants in common
          TEN ENT --   as tenants by the entireties
          JT TEN --    as joint tenants withright
                       of survivorship and not as
                       tenants in common
<PAGE>

          UNIF GIFT MIN ACT --                   Custodian
                              -------------------         ----------------------
                                    (Cust)                        (Minor)
               under Uniform Gift to Minors
               Act
                  -------------------------
                          (State)

FOR VALUE RECEIVED,                               , hereby sells, assigns and
                   ------------------------------
transfers unto

Please insert social security or other
Identifying number of assignee

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 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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                                                                Shares
----------------------------------------------------------------
of the Series D Preferred Stock represented by this Certificate, does hereby
irrevocably constitute and appoint
                                  ----------------------------------------------
                                                                 agent to
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transfer the said Series D Preferred Stock on the books of the Corporation with
full power of substitution in the premises.

Dated
     ----------------------------

                                      X
                                        --------------------------------

                                      X
                                        --------------------------------
                                      NOTICE: THE SIGNATURE(S) TO THIS
                                      ASSIGNMENT MUST CORRESPOND WITH THE
                                      NAME(S) AS WRITTEN UPON THE FACE OF THIS
                                      CERTIFICATE IN EVERY PARTICULAR, WITHOUT
                                      ALTERATION OR ENLARGEMENT OR ANY CHANGE
                                      WHATEVER.

SIGNATURE(S) GUARANTEED:

By
  -----------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.)

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