Document:

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                                                                Exhibit No. 4(d)

                             SUB-ADVISORY CONTRACT

     Agreement made as of March 1, 2001 ("Contract") between MITCHELL HUTCHINS
ASSET MANAGEMENT INC., a Delaware corporation ("Mitchell Hutchins"), and
Massachusetts Financial Services Company, a Delaware corporation ("Sub-
Adviser").

                                 RECITALS
                                 --------

  (1)  Mitchell Hutchins has entered into an Investment Management and
       Administration Agreement, dated March 1, 2001 ("Management Agreement"),
       with PaineWebber Managed Investments Trust ("Trust"), an open-end
       management investment company registered under the Investment Company Act
       of 1940, as amended ("1940 Act"), with respect to the series of the Trust
       designated as PaineWebber High Income Fund ("Series");

  (2)  Mitchell Hutchins wishes to retain the Sub-Adviser to furnish certain
       investment advisory services to Mitchell Hutchins and the Series; and

  (3)  The Sub-Adviser is willing to furnish such services.

  NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, Mitchell Hutchins and the Sub-Adviser agree as follows:

  1.  Appointment.  Mitchell Hutchins hereby appoints the Sub-Adviser as an
      ------------
investment sub-adviser with respect to the Series for the period and on the
terms set forth in this Contract.  The Sub-Adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided.

  2.  Duties as Sub-Adviser.
      ----------------------

         (a)  Subject to the supervision and direction of the Trust's Board of
Trustees ("Board") and review by Mitchell Hutchins, and any written guidelines
dopted by the Board or Mitchell Hutchins and furnished to the Sub-Adviser, the
Sub-Adviser will provide a continuous investment program for all or a designated
portion of the assets ("Segment") of the Series, including investment research
and discretionary management with respect to all securities and investments and
cash equivalents in the Series or Segment. The Sub-Adviser will determine from
time to time what investments will be purchased, retained or sold by the Series
or Segment. The Sub-Adviser will be responsible for placing purchase and sell
orders for investments and for other related transactions for the Series or
Segment. The Sub-Adviser will be responsible for voting proxies of issuers of
securities held by the Series or Segment. The Sub-Adviser understands that the
Series' assets need to be managed so as to permit it to qualify or to continue
to qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended ("Code"). The Sub-Adviser will provide services under
this Contract in accordance with the Series' investment objective, policies and
restrictions as stated in the Trust's currently effective registration statement
under the 1940 Act, and any amendments or supplements thereto ("Registration
Statement").
<PAGE>

         (b)  The Sub-Adviser agrees that, in placing orders with brokers, it
will seek to obtain the best net result in terms of price and execution;
provided that, on behalf of the Series, the Sub-Adviser may, in its discretion,
use brokers that provide the Sub-Adviser with research, analysis, advice and
similar services to execute portfolio transactions on behalf of the Series or
Segment, and the Sub-Adviser may pay to those brokers in return for brokerage
and research services a higher commission than may be charged by other brokers,
subject to the Sub-Adviser's determining in good faith that such commission is
reasonable in terms either of the particular transaction or of the overall
responsibility of the Sub-Adviser to the Series or its other clients and that
the total commissions paid by the Series or Segment will be reasonable in
relation to the benefits to the Series over the long term. In no instance will
portfolio securities be purchased from or sold to Mitchell Hutchins or the Sub-
Adviser, or any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder. The Sub-Adviser may
aggregate sales and purchase orders with respect to the assets of the Series or
Segment with similar orders being made simultaneously for other accounts advised
by the Sub-Adviser or its affiliates. Whenever the Sub-Adviser simultaneously
places orders to purchase or sell the same security on behalf of the Series and
one or more other accounts advised by the Sub-Adviser, the orders will be
allocated as to price and amount among all such accounts in a manner believed to
be equitable over time to each account. Mitchell Hutchins recognizes that in
some cases this procedure may adversely affect the results obtained for the
Series or Segment.

         (c) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Series or Segment, and will furnish the Board and Mitchell Hutchins with such
periodic and special reports as the Board or Mitchell Hutchins reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records that it maintains for the Series
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Trust and
that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Trust any records or copies thereof that it
maintains for the Series upon request by the Trust.

          (d) At such times as shall be reasonably requested by the Board or
Mitchell Hutchins, the Sub-Adviser will provide the Board and Mitchell Hutchins
with economic and investment analyses and reports as well as quarterly reports
setting forth the performance of the Series or Segment and make available to the
Board and Mitchell Hutchins any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or other
customers.

         (e) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities in the Series or Segment, in accordance with
procedures adopted by the Board, as amended from time to time. The Sub-Adviser
will use its reasonable efforts to arrange for the provision of a price from one
or more parties independent of the Sub-Adviser for each portfolio security for
which the custodian does not obtain prices in the ordinary course of business
from an automated pricing service.

    3. Further Duties.  In all matters relating to the performance of this
       ---------------
Contract, the Sub-Adviser and Mitchell Hutchins will act in conformity with the
Trust's Declaration of Trust, By-
<PAGE>

Laws and Registration Statement and with the written instructions and written
directions of the Board and will comply with the requirements of the 1940 Act
and the Investment Advisers Act of 1940, as amended ("Advisers Act") and the
rules under each, Subchapter M of the Code, as applicable to regulated
investment companies; and all other federal and state laws and regulations
applicable to the Trust and the Series. Mitchell Hutchins agrees to provide to
the Sub-Adviser copies of the Trust's Declaration of Trust, By-Laws,
Registration Statement, written instructions and directions of the Board and
Mitchell Hutchins, and any amendments or supplements to any of these materials
as soon as practicable after such materials become available; and further agrees
to identify to the Sub-Adviser in writing any broker-dealers that are affiliated
with Mitchell Hutchins (other than PaineWebber Incorporated and Mitchell
Hutchins itself).

    4. Expenses. During the term of this Contract, the Sub-Adviser will bear all
       --------
expenses incurred by it in connection with its services under this Contract.
The Sub-Adviser shall not be responsible for any expenses incurred by the Trust,
the Series or Mitchell Hutchins.

    5. Compensation.
       -------------

        (a) For the services provided and the expenses assumed by the Sub-
Adviser pursuant to this Contract, Mitchell Hutchins, not the Series, will pay
to the Sub-Adviser a sub-advisory fee, computed daily and paid monthly, at an
annual rate of 0.45% of the average daily net assets of the Series or Segment
(computed in the manner specified in the Management Agreement) and will provide
the Sub-Adviser with a schedule showing the manner in which the fee was
computed. If the Sub-Adviser is managing a Segment, its fees will be based on
the value of assets of the Series within the Sub-Adviser's Segment.

         (b) The fee shall be accrued daily and payable monthly to the Sub-
Adviser on or before the fifteenth day of the next succeeding calendar month.

         (c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be pro-rated according to the proportion that such period
bears to the full month in which such effectiveness or termination occurs.

   6.  Limitation of Liability.
       ------------------------

         (a) The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Series, the Trust, its
shareholders or by Mitchell Hutchins in connection with the matters to which
this Contract relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Contract.

         (b) Mitchell Hutchins shall indemnify, defend and hold harmless the
Sub-Adviser, its affiliates, and each of their respective directors, officers,
employees, shareholders, agents and representatives (collectively, the
"Indemnities") from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorney's fees) arising
from or related to the services contemplated under this Agreement, except to the
extent any such losses, claims, damages, liabilities, costs and expenses result
from willful misfeasance, bad faith or gross
<PAGE>

negligence on the Sub-Adviser's part in the performance of its duties or from
reckless disregard by the Sub-Adviser of its obligations and duties under this
Agreement.

         (c) In no event will the Sub-Adviser have any responsibilities for any
other series of the Trust, for any portion of the Series' investments not
managed by the Sub-Adviser or for the acts or omissions of any other sub-adviser
to the Trust or Series.

    In particular, in the event the Sub-Adviser shall manage only a portion of
the Series' investments, the Sub-Adviser shall have no responsibility for the
Series' being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Series as a whole or for the Series'
failing to qualify as a regulated investment company under the Code, if the
securities and other holdings of the Segment managed by the Sub-Adviser are such
that such Segment would not be in such violation or fail to so qualify if such
segment were deemed a separate series of the Trust or a separate "regulated
investment company" under the Code.

    Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.

    7. Representations.
       ----------------

         (a) The Sub-Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Contract remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Contract; (iii)
has met and will seek to continue to meet for so long as this Contract remains
in effect, any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary to
be met in order to perform the services contemplated by this Contract; (iv) has
the authority to enter into and perform the services contemplated by this
Contract; and (v) will promptly notify Mitchell Hutchins of the occurrence of
any event that would disqualify the Sub-Adviser from serving as a sub-investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.

         (b) Mitchell Hutchins (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Contract remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services as investment adviser contemplated by
this Contract; (iii) has met and will seek to continue to meet for so long as
this Contract remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry self-
regulatory agency necessary to be met in order to perform the services as
investment adviser contemplated by this Contract; and (iv) will promptly notify
the Sub-Adviser of the occurrence of any event that would disqualify Mitchell
Hutchins from serving as an investment adviser of any investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.

         (c) The Sub-Adviser has adopted a written code of ethics and
appropriate procedures complying with the requirements of Rule 17j-1 under the
1940 Act and has provided Mitchell Hutchins and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within thirty days of
the end of the last calendar quarter of each year that this Contract is in
effect, the president or a vice president of the Sub-Adviser shall certify to
Mitchell Hutchins that the Sub-
<PAGE>

Adviser has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no material violation of the Sub-Adviser's code of
ethics or, if such a violation has occurred, that appropriate action was taken
in response to such violation. Upon the written request of Mitchell Hutchins,
the Sub-Adviser shall permit Mitchell Hutchins, its employees or its agents to
examine the reports required to be made by the Sub-Adviser pursuant to Rule 17j-
1, which are relevant to the services provided under this Contract.

         (d) The Sub-Adviser has provided Mitchell Hutchins with a copy of its
Form ADV, as most recently filed with the Securities and Exchange Commission
("SEC") and promptly will furnish a copy of all amendments to Mitchell Hutchins
at least annually.

         (e) The Sub-Adviser will notify Mitchell Hutchins of any change of
control of the Sub-Adviser, including any change of its general partners or 25%
shareholders or 25% limited partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the Series or senior
management of the Sub-Adviser, in each case prior to, or promptly after, such
change.

         (f) The Sub-Adviser agrees that neither it, nor any of its affiliates,
will in any way refer directly or indirectly to its relationship with the
Series, the Trust, Mitchell Hutchins or any of their respective affiliates in
offering, marketing or other promotional materials without the prior express
written consent of Mitchell Hutchins.

    8. Services Not Exclusive.  The services furnished by the Sub-Adviser
       -----------------------
hereunder are not to be deemed exclusive and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby or unless otherwise agreed to by the parties hereunder
in writing.  Nothing in this Contract shall limit or restrict the right of any
trustee, director, officer or employee of the Sub-Adviser, who may also be a
Trustee, officer or employee of the Trust, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.

    9. Duration and Termination.
       -------------------------
         (a) This Contract shall become effective upon the day and year first
written above, provided that this Contract has been approved for the Series by a
vote of:  (i) a majority of those Trustees of the Trust who are not parties to
this Contract or interested persons of any such party ("Independent Trustees")
cast in person at a meeting called for the purpose of voting on such approval
and (ii) a majority of the Series' outstanding voting securities unless in the
case of (ii), the Trust complies with the terms of any SEC exemptive order or
rule permitting it to modify to the Contract without such vote.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from its effective date.  Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually: (i) by a vote of a majority of Independent Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Board or by vote of a majority of the outstanding voting securities of
the Series.
<PAGE>

         (c) Notwithstanding the foregoing, with respect to the Series, this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Series on sixty days' written notice to the Sub-Adviser and
may be terminated by the Sub-Adviser at any time, without the payment of any
penalty, on sixty days' written notice to Mitchell Hutchins. The Contract may
also be terminated, without payment of penalty, by Mitchell Hutchins (i) upon
material breach by the Sub-Adviser of any of the representations and warranties
set forth in Paragraph 7 of this Contract, if such breach shall not have been
cured within a 20 day period after notice of such breach or (ii) if, in the
reasonable judgment of Mitchell Hutchins, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Contract, including
circumstances such as financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Series. This Contract will
terminate automatically in the event of its assignment or upon termination of
the Advisory Contract as it relates to the Series.

    10. Amendment of this Contract.  No provision of this Contract may be
        ---------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.  No amendment of this Contract as to the
Series shall be effective until approved by vote of (i) the Independent Trustees
and (ii) a majority of the Series' outstanding voting securities unless in the
case of (ii), the Trust complies with the terms of any SEC exemptive order or
rule permitting it to modify to the Contract without such vote.

    11. Governing Law.  This Contract shall be construed in accordance with the
        --------------
1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof.  To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.

    12. Miscellaneous.  The captions in this Contract are included for
        --------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.  If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby.  This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors.  As used in this Contract,
the terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net assets,"
"sale," "sell" and "security" shall have the same meaning as such terms have in
the 1940 Act, subject to such exemption as may be granted by the SEC by any
rule, regulation or order.  Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.  This Contract may be signed in counterpart.

    13. Notices.  Any notice herein required is to be in writing and is deemed
       --------
to have been given to the Sub-Adviser or Mitchell Hutchins upon receipt of the
same at their respective addresses set forth below. All written notices required
or permitted to be given under this Contract will be delivered by personal
service, by postage mail - return receipt requested or by facsimile machine or a
similar means of same day delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to Mitchell
Hutchins will be sent to the attention of Dianne E. O'Donnell, Deputy General
Counsel. All notices provided to the Sub-Adviser will be sent to the attention
of Robert T. Burns, Senior Vice President and Associate General Counsel.

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

<PAGE>

                                          MITCHELL HUTCHINS ASSET
                                          MANAGEMENT INC.
                                          51 West 52nd Street
Attest: /s/ Keith A. Weller               New York, New York  10019-6114
        ---------------------

By: /s/ Keith A. Weller                   By: /s/ Dianne E. O'Donnell
    ---------------------                     -------------------------
Name: Keith A. Weller                     Name: Dianne E. O'Donnell
Title: First Vice President               Title: Senior Vice President

                                          MASSACHUSETTS FINANCIAL
                                          SERVICES COMPANY
                                          500 Boylston Street
                                          Boston, Massachusetts 02116
Attest: /s/ Mitchell C. Freestone
        -------------------------

By: /s/ Mitchell C. Freestone             By: /s/ Arnold D. Scott
    -----------------------------             -------------------------
Name: Mitchell C. Freestone               Name:  Arnold D. Scott
Title: Vice President and                 Title:  Director
        Senior Counsel<PAGE>

                                                                    EXHIBIT 4.37

                      FIRST AMENDMENT dated as of December 7, 2000 (this
                      "Amendment"), to the Credit Agreement (the "Credit
                       ---------                                  ------
                      Agreement") dated as of May 31, 2000 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 amend certain provisions
of the Credit Agreement, and the Lenders are willing so to amend the Credit
Agreement 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.  Amendment of Credit Agreement.  The Credit Agreement is
                       -----------------------------
hereby amended, effective as of the Amendment Effective Date, as follows:

           (a) Amendment of Section 1.01. The definition of "Permitted Business
               -------------------------
Acquisition" in Section 1.01 of the Credit Agreement is hereby replaced with the
following:

           "Permitted Business Acquisition" means any acquisition (by merger or
            ------------------------------
otherwise) by the Borrower or a Subsidiary Loan Party of all or substantially
all the assets of, or all the Equity Interests in, a Person or division or line
of business of a Person, if (a) immediately after giving effect thereto, no
Default has occurred and is continuing or would result therefrom, (b) such
acquired Person or business is predominately engaged in one or more
Telecommunications Businesses in the United States of America, (c) each
Subsidiary resulting from such acquisition (and which survives such acquisition)
shall be a Subsidiary Loan Party and all the Equity Interests of each such
Subsidiary that are owned directly by the Borrower and/or Subsidiary Loan
Parties shall have been (or within five Business Days or such longer period as
the Agent may allow after such acquisition shall be) pledged pursuant to the
applicable Pledge Agreement (except that with respect to each acquisition or
series of related acquisitions (x) Foreign Subsidiaries (i) (A) with an
aggregate book value of less than 2% of the consolidated total assets of the
Borrower and its Subsidiaries measured as the date (the "Test Date") of the most
                                                         ---------
recent internal financial statements available for both the Borrower and the
Foreign Subsidiaries prior to the consummation of the acquisition and (B) the
assets of which do not, in the aggregate, represent more than 20% of the total
consideration paid in connection with such acquisition or (ii) having an
aggregate EBITDA for the twelve month period ending on the Test Date of less
than (A) $20 million and (B) 10% of Consolidated EBITDA of the Borrower and its
Subsidiaries for such 12 month period, shall not be obligated to become
Subsidiary Loan Parties and (y) the Loan Parties shall not be required to pledge
more than 65% of the outstanding voting Equity Interests of any Foreign
Subsidiary), (d) the Collateral and Guarantee Requirement shall have been
<PAGE>

(or within five Business Days or such longer period as the Agent may allow after
such acquisition shall be) satisfied with respect to each such Subsidiary, (e)
the Borrower and the Restricted Subsidiaries are in compliance, on a pro forma
basis after giving effect to such acquisition (without giving effect to
operating expense reductions), with the financial covenants contained in
Sections 6.13, 6.14, 6.15, 6.16, 6.17 and 6.18 to the extent then applicable, as
if such acquisition had occurred on the first day of the relevant period for
testing compliance, and (f) the Borrower has delivered to the Agent an officer's
certificate to the effect set forth in clauses (a), (b), (c), (d) and (e) above,
together with all relevant financial information for the Person or assets
acquired and reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in clause (e) above. For purposes of clause (c) of this
definition, a Foreign Subsidiary's EBITDA for any period shall mean the
consolidated net income or loss of such Foreign Subsidiary for such period
determined in accordance with GAAP plus (a) without duplication and to the
extent deducted in determining such consolidated net income, the sum of (i)
consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) other non-operating expenses and (v) any
extraordinary losses, and minus (b) without duplication and to the extent
included in determining such consolidated net income, (i) any extraordinary
gains for such period, and (ii) any non-operating income.

           (b) Amendment of Section 6.01(b). Section 6.01(b) of the Credit
               -----------------------------
Agreement is hereby amended by (x) inserting the phrase "other than the Series B
Cumulative Convertible Preferred Stock, par value $0.01 per share (the "Series B
                                                                        --------
Preferred Stock"), and the Series C Cumulative Convertible Preferred Stock, par
---------------
value $0.01 per share, of the Borrower issued and outstanding on May 31, 2000"
immediately prior to the word "or" at the end of clause (i) of such Section
6.01(b) and (y) inserting the phrase "(other than the payment of dividends on
the Series B Preferred Stock to the extent permitted by Section 6.09(a)(iv))"
immediately following the phrase "Capital Stock of the Borrower" in clause (ii)
of such Section 6.01(b).

           (c) Amendment of Section 6.06. Section 6.06 of the Credit Agreement
               --------------------------
is hereby amended by replacing the phrase "a business unit" with the phrase "an
operating business" in the lead-in to such Section 6.06.

           (d) Amendment of Schedule 6.11. Schedule 6.11 to the Credit Agreement
               ---------------------------
is hereby amended by inserting the following sentence at the end of such
Schedule:

                  "The restrictions set forth on Schedule 4.14 to the Stock
Purchase Agreement dated as of August 30, 1999 between McLeodUSA Incorporated
and certain affiliates of Forstmann Little listed on the signature pages
thereto."

           SECTION 2. Representations and Warranties. To induce the other
                      ------------------------------
parties hereto to enter into this Amendment, the Borrower represents and
warrants to each of the Lenders, the Administrative Agent and the Collateral
Agent that, as of the Amendment 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 Amendment Effective Date with the same effect as though made on and as of
the Amendment 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.

           SECTION 3. Effectiveness. This Amendment shall become effective on
                      -------------
the date (the "Amendment Effective Date") that the Administrative Agent shall
               ------------------------
have received counterparts of this
<PAGE>

Amendment that, when taken together, bear the signatures of the Borrower and the
Required Lenders. Once effective, this Amendment shall be retroactive to
December 7, 2000.

           SECTION 4. Effect of Amendment. Except as expressly set forth herein,
                      -------------------
this Amendment 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 Amendment shall apply and be effective only with respect to
the provisions of the Credit Agreement specifically referred to herein.

           SECTION 5. Counterparts. This Amendment 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 Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.

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

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

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

                                             McLEODUSA INCORPORATED

                                                by

                                                   Name:
                                                   Title:

                                             THE CHASE MANHATTAN BANK,
                                             individually and as Agent

                                                by
                                                   Name:
                                                   Title:

                                             Name of Institution

                                                by

                                                   Name:
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]