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EXHIBIT 4.8

INVESTOR AGREEMENT

THIS INVESTOR AGREEMENT (this "Agreement") is entered into as of
April 1, 1996 by and among McLeod, Inc., a Delaware corporation (the
"Company"); IES Investments Inc., an Iowa corporation ("IES"); Midwest Capital
Group, Inc., an Iowa corporation ("MCG"); MWR Investments, Inc., an Iowa
corporation ("MWR"); Clark E. McLeod ("McLeod"); Mary E. McLeod (collectively
with McLeod, the "McLeods"); and the stockholders of the Company whose
signatures appear on Appendix 1 (collectively, the "Other Stockholders"). IES,
MCG, MWR, and the McLeods are referred to herein collectively as the "Principal
Stockholders" and individually as a "Principal Stockholder." The Principal
Stockholders and the Other Stockholders are referred to herein collectively as
the "Stockholders" and individually as a "Stockholder."

WHEREAS, the Company and the Stockholders are parties to a
Shareholders' Agreement dated April 1, 1993 and amended on February 23, 1994
and as of April 28, 1995 (the "Prior Shareholders' Agreement"), and the Other
Stockholders own, in aggregate, at least 75% of the "Stock owned by the
Shareholders" (as contemplated by Section 16(a) of the Prior Shareholders'
Agreement);

WHEREAS, the Company and certain of the Stockholders are parties
to an Investment Agreement dated April 1, 1993 and amended on February 23, 1994
and as of April 28, 1995 (the "Investment Agreement");

WHEREAS, the Company proposes to effectuate a registered
initial public offering of its capital stock (the "Public Offering");

WHEREAS, the Company and the Stockholders desire to terminate
the Prior Shareholders' Agreement and Investment Agreement and enter into this
Agreement; and

NOW, THEREFORE, for and in consideration of the foregoing and of
the mutual covenants and agreements hereinafter set forth, the parties hereto
agree as follows:

1. DIRECTORS OF THE COMPANY

1.1. BOARD OF DIRECTORS

For a period of three years commencing on the Effective Date (as
defined in Section 5 hereof), each Principal Stockholder, for so long as such
Principal Stockholder owns at least 10% of the outstanding capital stock of the
Company,
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determined on a fully diluted basis, (that is, all outstanding capital stock of
the Company and all outstanding options and other securities convertible into,
or exercisable for, such capital stock) 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 at nine
directors;

(b) to cause to be elected to the Board of
Directors of the Company one director designated by
IES, for so long as IES owns at least 10% of the
outstanding capital stock of the Corporation
(determined on a fully diluted basis);

(c) to cause to be elected to the Board of
Directors of the Company one director designated by
MWR, for so long as MWR owns at least 10% of the
outstanding capital stock of the Corporation
(determined on a fully diluted basis);

(d) to cause to be elected to the Board of
Directors of the Company three directors who are
executive officers of the Company designated by
McLeod, for so long as the McLeods collectively own
at least 10% of the outstanding capital stock of the
Corporation (determined on a fully diluted basis);
and

(e) to cause to be elected to the Board of
Directors of the Company four independent directors
nominated by the Board of Directors of the Company.

2. STANDSTILL

Each of IES, MWR and MCG (each a "Strategic Investor" and
collectively, the "Strategic Investors") hereby severally agrees that for a
period of three years commencing on the Effective Date, neither of such
Strategic Investors nor the affiliates thereof, as defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), will (and
each such Strategic Investor will not assist or encourage others to), directly
or indirectly, acquire or agree, offer, seek or propose to acquire, or cause to
be acquired, ownership (including, but not limited to, beneficial ownership as
defined in Rule l3d-3 under the Exchange Act) 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
Company's Board of Directors, (c) conversion of Class B Common Stock of the
Company into Class A Common Stock of the Company pursuant to the terms thereof,
(d) with respect to transfers of equity

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securities between or among a Strategic Investor and such party's wholly owned
subsidiaries, parent corporation, or other wholly owned subsidiaries of such
parent corporation, (e) in connection with a business combination between or
among Strategic Investors, or (f) in the case of IES (or any affiliate
thereof), with respect to the grant, vesting or exercise of stock options or
the purchase of Class A Preferred Stock of the Company pursuant to the
Agreement Regarding Support Agreement or the Agreement Regarding Guarantee, in
each case between the Company and IES Diversified Inc., and the respective
agreements and stock option plans contemplated thereby (collectively, the "IES
Guarantee Agreements").

3. TRANSFERS OF SECURITIES

Each Principal Stockholder hereby severally agrees that for a
period of two years commencing on the Effective Date none of such Principal
Stockholders will offer, sell, contract to sell, grant any option to purchase,
or otherwise dispose of, directly or indirectly, any equity securities of the
Company or any other securities convertible into or exercisable for such equity
securities, except to the extent consented prior thereto in writing by the
Company's Board of Directors.

4. TERMINATION OF PRIOR SHAREHOLDERS' AGREEMENT AND INVESTMENT AGREEMENT

On the Effective Date, the Prior Shareholders' Agreement and
the Investment Agreement shall automatically terminate in all respects.
Nothing in this Agreement shall be deemed to modify the rights and
responsibilities of IES (or its affiliates) or the Company set forth in the IES
Guarantee Agreements.

5. EFFECTIVENESS OF AGREEMENT

As referred to herein, the effective date of this Agreement (the
"Effective Date") shall be the date on which the Securities and Exchange
Commission declares the registration statement filed pursuant to the Securities
Act of 1933, as amended, in connection with the Public Offering to be
effective; provided, however, that the aggregate offering price is expected by
the Company on such date to be at least $50,000,000; and provided, further,
that this Agreement shall terminate in all respects if such effectiveness does
not occur on or before December 31, 1996.

6. WAIVER OF PIGGYBACK REGISTRATION RIGHTS

As of the date of this Agreement, each of the Stockholders
hereby waives any "piggyback" rights it may have to register any of its equity
securities for sale in the Public Offering.

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7. REPRESENTATIONS AND WARRANTIES

7.1. REPRESENTATIONS AND WARRANTIES OF NON-INDIVIDUAL STOCKHOLDERS.

Each Stockholder that is a corporation or partnership hereby
represents and warrants, as of the date of this Agreement, to the Company and
to each other Stockholder as follows:

7.1.1. AUTHORIZATION

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

7.1.2. BINDING OBLIGATION

This Agreement constitutes a valid and binding obligation of
such 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 Stockholder pursuant hereto, when executed
and delivered in accordance with the provisions hereof, shall be a valid and
binding obligation of such Stockholder, enforceable in accordance with its
terms (with the aforesaid exceptions).

7.2. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL STOCKHOLDERS

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

7.2.1. POWER AND AUTHORITY

Such 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.

7.2.2. BINDING OBLIGATION

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Stockholder pursuant hereto, when executed and delivered in accordance with the
provisions hereof, shall be a valid and binding obligation of such Stockholder,
enforceable in accordance with its terms (with the aforesaid exceptions).

7.3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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

7.3.1. AUTHORIZATION

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

7.3.2. 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).

8. MISCELLANEOUS

8.1. 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.

8.2. ENTIRE AGREEMENT; AMENDMENT

This Agreement, including the Appendix hereto and other writings
referred to herein or delivered pursuant hereto, constitutes the entire
agreement among the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for herein.
No amendment, modification or

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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.

8.3. 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.

8.4. 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 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.

8.5. 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).

8.6. 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:

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

McLeod, Inc.
Town Centre
221 Third Avenue, SE
Suite 500
Cedar Rapids, IA 52401-1522
Attention: Clark E. McLeod
Facsimile: (319) 298-7008

(ii) If to IES:

IES Investments Inc.
200 1st Street SE
Cedar Rapids, IA 52401
Attention: Peter W. Dietrich
Facsimile: (319) 398-4483

(iii) If to MWR:

Midwest Investments, Inc.
666 Grand Avenue
P. O. Box 657
Des Moines, IA 50306-9244
Attention: Vice President
Facsimile: (515) 281-2581

(ii) If to any of the other Stockholders:

To such Stockholder's address on Appendix 1 hereto.

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.

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8.7. 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.

[Rest of page intentionally left blank]

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

MCLEOD, INC. MWR INVESTMENTS, INC.

By: /s/ Blake O. Fisher, Jr. By: /s/ Dennis H. Melstad
-------------------------- ---------------------------------------
Blake O. Fisher, Jr. Dennis H. Melstad
Chief Financial Officer President
and Treasurer

MIDWEST CAPITOL
IES INVESTMENTS INC. GROUP, INC.

By: /s/ Peter W. Dietrich By: /s/ Ron W. Stepien
--------------------------------------- ------------------------------------------
Peter W. Dietrich Ron W. Stepien
Vice President Group Vice President

/s/ Clark E. McLeod /s/ Clark E. McLeod
------------------------------------------ ------------------------------------------
Clark E. McLeod Mary E. McLeod
by Clark E. McLeod, Attorney
in Fact

THE OTHER STOCKHOLDERS, WHOSE SIGNATURES APPEAR ON
APPENDIX 1

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APPENDIX 1

TO INVESTOR AGREEMENT
DATED AS OF APRIL 1, 1996

OTHER STOCKHOLDERS

OF MCLEOD, INC.

/s/ Clark E. McLeod /s/ Clark E. McLeod
------------------------------------------ --------------------------------------
Aaron McLeod Ted McLeod
by Clark E. McLeod, by Clark E. McLeod,
Attorney in Fact Attorney in Fact

/s/ Clark E. McLeod /s/ Kirk E. Kaalberg
------------------------------------------ --------------------------------------
Holly A. McLeod Kirk E. Kaalberg
by Clark E. McLeod,
Attorney in Fact

/s/ Bruce Thayer /s/ David C. Stanard
------------------------------------------ --------------------------------------
Bruce Thayer David C. Stanard

/s/ Susan M. Thayer /s/ David C. Stanard
------------------------------------------ --------------------------------------
Susan M. Thayer Judith A. Stanard
by David C. Stanard,
Attorney in Fact

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/s/ James L. Cram /s/ Douglas McGowen
------------------------------------------ --------------------------------------
James L. Cram Douglas McGowen

/s/ James L. Cram /s/ John D. Hagan
------------------------------------------ --------------------------------------
Virginia A. Cram John D. Hagan
by James L. Cram,
Attorney in Fact

/s/ James L. Cram /s/ John D. Hagan
------------------------------------------ --------------------------------------
William A. Cram Karleen M. Hagan
by James L. Cram, by John D. Hagan, Attorney
Attorney in Fact in Fact

/s/ James L. Cram /s/ Gene L. Hassman
------------------------------------------ --------------------------------------
Kirsten J. Cram Gene L. Hassman
by James L. Cram,
Attorney in Fact

/s/ Stephen C. Gray /s/ Casey D. Mahon
------------------------------------------ --------------------------------------
Stephen C. Gray Casey D. Mahon

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/s/ Stephen C. Gray
------------------------------------------
Sally W. Gray
by Stephen C. Gray,
Attorney in Fact

/s/ Scott L. Golberg /s/ Casey D. Mahon
------------------------------------------ --------------------------------------
Scott L. Golberg Dain Bosworth, Inc.
custodian for Casey D.
Mahon IRA

/s/ Scott L. Golberg /s/ Stephen C. Gray
------------------------------------------ --------------------------------------
Julie A. Golberg Stephen Samuel Gray
by Scott L. Golberg, Irrevocable Trust by
Attorney in Fact Stephen C. Gray, Trustee

/s/ Clark E. McLeod
--------------------------------------
Joni Thornton
by Clark E. McLeod,
Attorney in Fact

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/s/ Clark E. McLeod /s/ Clark E. McLeod
------------------------------------------ --------------------------------------
Dave Lindberg Al Lyon
by Clark E. McLeod, by Clark E. McLeod,
Attorney in Fact Attorney in Fact

/s/ Clark E. McLeod /s/ Clark E. McLeod
------------------------------------------ --------------------------------------
Karen Lindberg Delores Lyon
by Clark E. McLeod, by Clark E. McLeod,
Attorney in Fact Attorney in Fact

/s/ Mernat & Co. /s/ Mernat & Co.
------------------------------------------ --------------------------------------
Mernat & Co. f/b/o Mernat & Co f/b/o
Henry Royer IRA Joanne H. Collins Trust

/s/ Mernat & Co. /s/ Mernat & Co.
------------------------------------------ --------------------------------------
Mernat & Co. f/b/o Mernat & Co f/b/o
Firstar Bank, Cedar Rapids, N.A. John D. Hagan IRA
as Trustee for Shuttleworth &
Ingersoll, P.C. f/b/o Thomas M.
Collins

/s/ Mernat & Co. /s/ Frank N. Magid
------------------------------------------ --------------------------------------
Mernat & Co. f/b/o Frank N. Magid & Marilyn Y.
Stephen C. Gray Magid, Joint Tenants

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/s/ Fred L. Wham /s/ Scott G. Byers Partnership
------------------------------------------ ------------------------------
Fred L. Wham Trustee Scott G. Byers Partnership
Fred L. Wham Profit Sharing
U/A Dated 1-1-89 f/b/o Fred L.
Wham

/s/ Craig M. Byers /s/ Richard C. Young
----------------------------- --------------------------------------
Craig M. Byers & Susan M. Richard C. Young
Byers, Joint Tenants

/s/ Ross D. Christensen /s/ William C. Knapp
------------------------------------------ --------------------------------------
Ross D. Christensen William C. Knapp, Trustee
of the William C. Knapp
Revocable Trust

/s/ Nelson Investment Company, Inc. /s/ John W. AALFS
----------------------------------- --------------------------------------
Nelson Investment Company, John W. AALFS
Inc.

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/s/ William John Stevens
--------------------------------------
William John Stevens

/s/ Tami Young /s/ Merrill Lynch
------------------------------------------ --------------------------------------
Tami Young Merrill Lynch f/b/o
Michael J. Brown IRA

/s/ Ann Vermeer Stienstra /s/ Keith R. Molof
------------------------------------------ --------------------------------------
Ann Vermeer Stienstra Keith R. Molof

/s/ Central Iowa Energy Cooperative /s/ Frank N. Magid
------------------------------------------ --------------------------------------
Central Iowa Energy Trust for the Benefit of the
Cooperative Children of Frank Magid,
Frank N. Magid, Trustee,
U/A DTD 8-1-79

/s/ Iowa Capital Corporation /s/ Thomas M. Brown
------------------------------------------ --------------------------------------
Iowa Capital Corporation Dain Bosworth f/b/o
Thomas M. Brown IRA

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/s/ Thomas M. Brown /s/ Karen Jacobi
------------------------------------------ --------------------------------------
Thomas M. Brown Karen Jacobi

/s/ Philip Thrasher Kennedy /s/ IPC Development Co.
------------------------------------------ --------------------------------------
Philip Thrasher Kennedy IPC Development Co.

/s/ S.K.E. Investment Partnership
------------------------------------------ ---------------------------------
Trusty S.K.E. Investment Partnership

/s/ Thomas M. Hoyt /s/ James S. Cownie
------------------------------------------ --------------------------------------
Thomas M. Hoyt James S. Cownie

/s/ Mernat & Co. /s/ Gregg D. Miller
------------------------------------------ --------------------------------------
Mernat & Co., f/b/o Stephen Gregg D. Miller
C. Gray IRA

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/s/ Theodore G. Schwartz
------------------------------------------
Theodore G. Schwartz

/s/ IBAK & Company
------------------------------------------
IBAK & Company for the
Benefit of John W. Colloton,
SEP-IRT

/s/ John W. Colloton
------------------------------------------
John W. Colloton

ALLSOP VENTURE PARTNERS III L.P.
BY: MARK VENTURE PARTNERS L.P.,
Its General Partner

/s/ Paul D. Rhines
--- --------------------------------------
Paul D. Rhines,
General Partner

/s/ Blake O. Fisher, Jr.
------------------------------------------
Blake O. Fisher, Jr.

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