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                         MORAMERICA CAPITAL CORPORATION
                          INVESTMENT ADVISORY AGREEMENT

         This INVESTMENT ADVISORY AGREEMENT dated as of March 1, 1998 (the
"Agreement") by MorAmerica Capital Corporation, a corporation organized under
the laws of the State of Iowa ("MACC"), and InvestAmerica Investment Advisors,
Inc., a corporation organized under the laws of the State of Delaware
("InvestAmerica").

         WHEREAS, MACC is licensed as a small business investment company
("SBIC") under the Small Business Investment Act of 1958, as amended, and
operates as a business development company under the Investment Company Act of
1940, as amended (the "ICA"); and

         WHEREAS, MACC is in need of certain investment advisory services in
order to carry on its business;

         WHEREAS, InvestAmerica is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended.

         NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:

         Section 1.  Definitions.

         1.1 "Affiliate" shall have the meaning given under Rule 144 of the
Securities Act of 1933, as amended.

         1.2 "Assets Under Management" shall mean the total value of MACC's
assets Managed by InvestAmerica under this Agreement.

         1.3 "Capital Losses" are those which are placed, consistent with
generally accepted accounting principles, on the books of MACC and which occur
when:

                  (a) An actual or realized loss is sustained owing to Portfolio
         Company or investment events including, but not limited to,
         liquidation, sale or bankruptcy;

                  (b) The Board of Directors of MACC determines that a loss or
         depreciation in value from the value on the date of this Agreement
         should be taken by MACC in accordance with generally accepted
         accounting principles and SBA accounting regulations and is shown on
         its books as a part of the periodic valuation of the Portfolio
         Companies by the Board of Directors; or

                  (c) Capital Losses are adjusted for reverses of depreciation
         when the Board of Directors determines that a value should be adjusted
         upward and the investment value remains at or below original cost.




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         For purposes of this definition, in any case where the Board of
Directors of MACC writes down the value of any investment in MACC's portfolio
(in accordance with the standards set forth in subsection 1.3(b) above), (i)
such reduction in value shall result in a new cost basis for such investment and
(ii) the most recent cost basis of such investment shall thereafter be used in
the determination of any Realized Capital Gains or Capital Losses in MACC's
portfolio (i.e., there shall be no double-counting of losses when a security
(whose value has declined in a prior period) is ultimately sold at a price below
its historical cost).

         1.4  "Capital Under Management" shall mean MACC's (i) fiscal year end
Private Capital as defined in the SBA regulations as of the date hereof (which
regulations define Private Capital to exclude unrealized capital gains and
losses) ("Private Capital"); plus (ii) fiscal year end SBA leverage as defined
by SBA regulations as of the date hereof, including participating securities as
defined in Section 303(g) of the Small Business Investment Act of 1958, as
amended; plus (iii) fiscal year end Undistributed Realized Earnings.

         1.5  "ICA" has the meaning set forth in the first recital hereof.

         1.6  "Iowa Fund" has the meaning set forth in Section 3.2 below.

         1.7  "MACC" shall mean MorAmerica Capital Corporation.

         1.8  "Net Capital Gains" shall mean Realized Capital Gains net of
Capital Losses determined in accordance with generally accepted accounting
principles.

         1.9  "Other Venture Capital Funds" has the meaning set forth in
subsection 3.3(c).

         1.10 "Portfolio Company" or "Portfolio Companies" shall mean any
entity in which MACC may make an investment and with respect to which
InvestAmerica will be providing services pursuant hereto, which investments may
include ownership of capital stock, loans, receivables due from a Portfolio
Company or other debtor on sale of assets acquired in liquidation and assets
acquired in liquidation of any Portfolio Company.

         1.11 "Private Capital" has the meaning set forth in the definition of
Capital Under Management in Section 1.4 above.

         1.12 "Realized Capital Gains" shall mean capital gains after deducting
the cost and expenses necessary to achieve the gain (e.g., broker's fees). For
purposes of this Agreement:

                  (a) Capital gains are Realized Capital Gains upon the cash
         sale of the capital stock or assets of a Portfolio Company or any other
         asset or item of property managed by InvestAmerica pursuant to the
         terms hereof or any Realized Capital Gain has occurred in accordance
         with GAAP which is not cash as described in Subsection 1.12(c) below;

                  (b) With regard to all assets owned by MACC prior to the
         mergers of MorAmerica Financial Corporation and Morris Plan Liquidation
         Company into the



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         Company, the historical cost of such assets shall be
         the basis for determining any Realized Capital Gains on the disposition
         thereof, and

                  (c) Realized Capital Gains other than cash gains shall be
         recorded and calculated in the period the gain is realized; however, in
         determining payment of any incentive fee, the payment shall be made
         when the cash is received. The amount of the fee earned on gains other
         than cash shall be recorded as incentive fees payable on the financial
         statements of MACC.

         1.13 "SBA" shall mean the United States Small Business Administration,
or any successor thereto, which has regulatory authority over SBICs.

         1.14 "SBIC" has the meaning set forth in the first recital hereof.

         1.15 "SEC" shall mean the United States Securities and Exchange
Commission.

         1.16 "The Company" shall mean MACC Private Equities Inc. and "the
Companies" shall mean MACC Private Equities Inc. and MACC.

         1.17 "Venture Group" has the meaning set forth in Section 3.2 below.

       Section 2. Investment Advisory Engagement. MACC hereby engages
InvestAmerica as its investment advisor.

         2.1 As such, InvestAmerica will:

                  (a) Manage, render advice with respect to, and make decisions
         regarding the acquisition and disposition of securities in accordance
         with applicable law and MACC's investment policies as set forth in
         writing by the Board of Directors, to include (without limitation) the
         search and marketing for investment leads, screening and research of
         investment opportunities, maintenance and expansion of a co-investor
         network, review of appropriate investment legal documentation,
         presentations of investments to MACC's Board of Directors (when and as
         required), closing of investments, monitoring and management of
         investments and exits, preparation of valuations, management of
         relationships with the SEC, shareholders, the SBA and its auditors and
         outside auditors and the provision of other services appropriate to the
         management of an SBIC operating as a business development company;

                  (b) Make available and, if requested by Portfolio Companies or
         entities in which MACC is proposing to invest, render managerial
         assistance to, and exercise management rights in, such Portfolio
         Companies and entities as appropriate to maximize return for MACC and
         to comply with regulations;

                  (c) Maintain office space and facilities to the extent
         required by InvestAmerica to provide adequate management services to
         MACC;


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                  (d) Maintain the books of account and other records and files
         for MACC but not to include auditing services; and

                  (e) Report to MACC's Board of Directors, or to any committee
         or officers acting pursuant to the authority of the Board, at such
         reasonable times and in such reasonable detail as the Board deems
         appropriate in order to enable MACC to determine that investment
         policies are being observed and implemented and that InvestAmerica's
         obligations hereunder are being fulfilled. Any investment program
         undertaken by InvestAmerica pursuant hereto and any other activities
         undertaken by InvestAmerica on behalf of MACC shall at all times be
         subject to applicable law and any directives of MACC's Board of
         Directors or any duly constituted committee or officer acting pursuant
         to the authority of MACC's Board of Directors.

         2.2 InvestAmerica will be responsible for the following expenses: its
staff salaries and fringes, office space, office equipment and furniture,
communications, travel, meals and entertainment, conventions, seminars, office
supplies, dues and subscriptions, hiring fees, moving expenses, repair and
maintenance, employment taxes, in-house accounting expenses and minor
miscellaneous expenses.

         InvestAmerica will pay for its own account all expenses incurred in
rendering the services to be rendered hereunder. Without limiting the generality
of the foregoing, InvestAmerica will pay the salaries and other employee
benefits of the persons in its organization whom it may engage to render such
services, including without limitation, persons in its organization who may from
time to time act as officers of MACC.

         Notwithstanding the foregoing, InvestAmerica will earn incentive
compensation on a quarterly basis, which shall not be deemed part of
compensation or other employee benefits for the purpose of this paragraph.

         2.3 In connection with the services provided, InvestAmerica will not be
responsible for the following expenses which shall be the sole responsibility of
MACC and will be paid promptly by MACC: auditing fees; all legal expenses; legal
fees normally paid by Portfolio Companies; National Association of Small
Business Investment Companies and other appropriate trade association fees;
brochures, advertising, marketing and publicity costs; interest on SBA or other
debt; fees to MACC directors and board fees; any fees owed or paid to MACC, its
Affiliates or fund managers; any and all expenses associated with property of a
Portfolio Company taken or received by MACC or on its behalf as a result of its
investment in any Portfolio company; all reorganization and registration
expenses of MACC; the fees and disbursements of MACC's counsel, accountants,
custodian, transfer agent and registrar; fees and expenses incurred in producing
and effecting filings with federal and state securities administrators; costs of
periodic reports to and other communications with the Company's shareholders;
fees and expenses of members of MACC's Boards of Directors who are not
InvestAmerica's directors, officers or employees or of any entity which is an
Affiliate of InvestAmerica; premiums for the fidelity bond, if any, maintained
by InvestAmerica pursuant to ICA Section 17; premiums for directors and officers
insurance maintained by MACC; and all



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transaction costs incident to the acquisition, management, protection and
disposition of securities by MACC.

          Section 3.  Nonexclusive Obligations; Co-investments.

         3.1 The obligations of InvestAmerica to MACC are not exclusive.
InvestAmerica and its Affiliates may, in their discretion, manage other venture
capital funds and render the same or similar services to any other person or
persons who may be making the same or similar investments. The parties
acknowledge that InvestAmerica may offer the same investment opportunities as
may be offered to MACC to other persons for whom InvestAmerica is providing
services. Neither InvestAmerica nor any of its Affiliates shall in any manner be
liable to MACC or its Affiliates by reason of the activities of InvestAmerica or
its Affiliates on behalf of other persons and funds as described in this
paragraph and any conflict of interest arising therefrom is hereby expressly
waived.

         3.2 InvestAmerica Venture Group, Inc. ("Venture Group") has managed
MACC in the past. Venture Group is also currently the General Partner of
InvestAmerica Venture Group L.P. which in turn is the General Partner of the
Iowa Venture Capital Fund L.P. (the "Iowa Fund"). Because of these
relationships, Venture Group manages the affairs of the Iowa Fund.

         3.3 For the benefit of MACC's investment activities, InvestAmerica and
its Affiliates intend to maintain various future co-investment relationships
involving the Company which will include the following co-investments
opportunities for as long as InvestAmerica is an investment adviser to MACC:

                  (a) MACC will continue to review and to invest in its current
         coinvestments with the Iowa Fund.

                  (b) MACC will be accorded the opportunity to invest in all
         investment opportunities found by the Iowa Fund or any future successor
         or continuation fund of the Iowa Fund.

                  (c) In the future, MACC will be accorded the opportunity to
         review and to invest in all investments found by other venture capital
         funds managed by InvestAmerica and its Affiliates (collectively, the
         "Other Venture Capital Funds").

         For purposes of this Section 3.3, where the Companies have an
opportunity to co-invest with the Iowa Fund or Other Venture Capital Funds,
investment opportunities shall be offered to the Companies and the Iowa Fund or
the Other Venture Capital Funds, as the case may be, (a) in the same proportion
as its Private Capital bears to the total Private Capital of the Companies and
the Iowa Fund or the Other Venture Capital Funds, as the case may be, in the
aggregate, or (b) in such other manner as is otherwise agreed upon by the
Companies and the Iowa Fund or the Other Venture Capital Funds, as the case may
be. Notwithstanding this Section 3.3, the terms of any applicable exemptive
order obtained by the Companies will control as to the terms of co-investments
with the Iowa Fund and the Other Capital Venture Funds.




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         3.4 InvestAmerica will cause to be offered to MACC opportunities to
acquire or dispose of securities as provided in the co-investment guidelines
summarized in the section of the Company's SEC Registration Statement entitled
"Investment Objectives and Policies - Co-Investment Guidelines." Except to the
extent of acquisitions and dispositions that, in accordance with such
co-investment guidelines, require the specific approval of MACC's Board of
Directors, InvestAmerica is authorized to effect acquisitions and dispositions
of securities for MACC's account in InvestAmerica's discretion. Where such
approval is required, InvestAmerica is authorized to effect acquisitions and
dispositions for MACC's account upon and to the extent of such approval. MACC
will put InvestAmerica in funds whenever InvestAmerica requires funds for an
acquisition of securities in accordance with the foregoing, and MACC will cause
to be delivered in accordance with InvestAmerica's instructions any securities
disposed of in accordance with the foregoing.

         3.5 Should InvestAmerica or any of its Affiliates agree to perform or
undertake any investment management services described in paragraph 3.1 for any
funds or persons in addition to the Iowa Fund, InvestAmerica will notify MACC,
in writing, not later than the commencement of such agreement or the initial
provision of such services.

         3.6 Any such investment management services and all co-investments
shall at all times be provided in strict accordance with rules and regulations
under the ICA, any exemptive order obtained thereunder and the rules and
regulations of the SBA.

         Section 4.  Services to Portfolio Companies.

         4.1 It is acknowledged that as a part of the services to be provided by
InvestAmerica hereunder, certain of its employees, representatives and agents
will act as members of the board of directors of individual Portfolio Companies,
will vote the shares of the capital stock of Portfolio Companies, and make other
decisions which may effect the near- and the long-term direction of a Portfolio
Company. Unless otherwise restricted hereafter by MACC in writing, in regard to
such actions and decisions MACC hereby appoints InvestAmerica (and such
officers, Directors, employees, representatives and agents is it shall
designate) as its proxy, as a result of which InvestAmerica shall have the
authority, in its performance of this Agreement, to make decisions and to take,
without specific authority from the Board of Directors of MACC, as to all
matters which are not hereby restricted.

         4.2 All fees, including director's fees that may be paid by or for the
account of an entity in which MACC has invested or in which MACC is proposing to
invest in connection with an investment transaction in which MACC participates
or provides managerial assistance, will be treated as commitment fees or
management fees and will be received by MACC, pro rata to its participation in
such transaction. InvestAmerica will be allowed to be reimbursed by Portfolio
Companies for all direct expenses associated with due diligence and management
of portfolio investments or investment opportunities (travel, meals, lodging,
etc.).

         4.3 InvestAmerica's sole and exclusive compensation for its services to
be rendered hereunder will be in the form of a management fee and a separate
incentive fee as provided in Section 5. Should any officer or director of
InvestAmerica serve as a member of the Board of



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Directors of MACC, such officer or director of InvestAmerica shall not receive
compensation as a member of the Board of Directors of MACC.

         Section 5.  Management and Incentive Fees.

         5.1 During the term of this Agreement, MACC will pay InvestAmerica
monthly in arrears a management fee equal to 2.5% per annum of the Capital Under
Management, but in no event more than 2.5% per annum. of the Assets Under
Management.

         5.2 During the term of this Agreement MACC shall pay to InvestAmerica
an incentive fee determined as specified in this Section 5.2.

                  (a) The incentive fee shall be calculated as follows:

                          (i) The amount of the fee shall be 13.4% of the Net
                 Capital Gains, before taxes, resulting from the disposition of
                 investments in MACC's Portfolio Companies or resulting from the
                 disposition of other assets or property of MACC managed by
                 InvestAmerica pursuant to the terms hereof.

                          (ii) Net Capital Gains, before taxes, shall be
                 calculated annually at the end of each fiscal year for the
                 purpose of determining the earned incentive fee, unless this
                 Agreement is terminated prior to the completion of any fiscal
                 year, then such calculation shall be made at the end of such
                 shorter period. A preliminary calculation shall be made on the
                 last business day of each of the three fiscal quarters
                 preceding the end of each fiscal year for the purpose of
                 determining the incentive fee payable under Section 5.2(c)(i)
                 below. Capital Losses and Realized Capital Gains shall not be
                 cumulative (i.e., no Capital Losses nor Realized Capital Gains
                 are carried forward into any subsequent fiscal year).

                          (iii) Notwithstanding anything herein to the contrary,
                 the assets on which the incentive fee shall be calculated shall
                 include all assets owned by MACC prior to the time of the
                 mergers of MorAmerica Financial Corporation and Morris Plan
                 Liquidation Company into the Company.

                  (b) Upon termination of this Agreement, all earned but unpaid
         incentive fees shall be immediately due and payable.

                  (c) Payment of incentive fees shall be made as follows:

                          (i) To the extent payable, the incentive fee shall be
                 paid, in cash, in arrears by the last business day of each
                 fiscal quarter in the fiscal year. The incentive fee shall be
                 retroactively adjusted as soon as practicable following
                 completion of valuations at the end of each fiscal year in
                 which this Agreement is in effect to reflect the actual
                 incentive fee due and owing to InvestAmerica, and if such
                 adjustment reveals that InvestAmerica has received more
                 incentive fee income



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                 than it is entitled to hereunder, InvestAmerica shall promptly
                 reimburse MACC for the amount of such excess.

                          (ii) In the event MACC earns any incentive fees, the
                 payment of which would cause MACC's Private Capital to be 25%
                 or more impaired, the portion of such fees which causes the
                 impairment shall be paid by MACC into a trust or escrow account
                 established by MACC for the benefit of InvestAmerica. Fees from
                 such account shall be released to InvestAmerica at such time
                 as, and to the extent that, MACC's Private Capital is no longer
                 so impaired.

         Section 6.  Liability and Indemnification of InvestAmerica.

         6.1 Neither InvestAmerica, nor any of its officers, directors,
shareholders, employees, agents or Affiliates, whether past, present or future
(collectively, the "Indemnified Parties"), shall be liable to MACC, or any of
MACC's Affiliates for any error in judgment or mistake of law made by the
Indemnified Parties in connection with any investment made by or for MACC,
provided such error or mistake was made in good faith and was not made in bad
faith or as a result of gross negligence or willful misconduct of the
Indemnified Parties. MACC confirms that in performing services hereunder
InvestAmerica will be an agent of MACC for the purpose of the indemnification
provisions of the Bylaws of MACC subject, however, to the same limitations as
though InvestAmerica were a director or officer of MACC. InvestAmerica shall not
be liable to MACC, its shareholders or its creditors, except for violations of
law or for conduct which would preclude InvestAmerica from being indemnified
under such provisions. The provisions of this Section 6.1 shall be applicable to
any act or omission or occurrence arising under the Management Agreement between
MACC and InvestAmerica's Affiliate, InvestAmerica Venture Group, Inc., dated as
of May 13, 1985 and all amendments and renewals thereto. In addition, the
provisions of this Section 6.1 shall survive termination of this Agreement.

         6.2 Individuals who are Affiliates of InvestAmerica and are also
officers or directors of MACC as well as other InvestAmerica officers performing
duties within the scope of this Agreement on behalf of MACC will be covered by
any directors and officers insurance policy maintained by MACC.

         Section 7.  Shareholder Approval; Term.

         MACC represents that this Agreement has been approved by MACC's Board
of Directors. This Agreement shall continue in effect for two years from the
date hereof, provided, however, that this Agreement shall not take effect if as
of the date hereof the shareholders of MACC Private Equities Inc. and the sole
shareholder of MACC shall not have approved this Agreement in the manner set
forth in Section 15(a) of the ICA. Thereafter, this Agreement shall continue in
effect so long as such continuance is specifically approved at least annually by
MACC's Board of Directors, including a majority of its members who are not
interested persons of InvestAmerica, or by vote of the holders of a majority, as
defined in the ICA, of MACC's outstanding voting securities. The foregoing
notwithstanding, this Agreement may be terminated by MACC at any time, without
payment of any penalty, on 60 days' written notice to



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InvestAmerica if the decision to terminate has been made by the Board of
Directors or by vote of the holders of a majority, as defined in the ICA, of
MACC's outstanding voting securities. InvestAmerica may also terminate this
Agreement on 60 days' written notice to MACC; provided, however, that
InvestAmerica may not so terminate this Agreement unless another investment
advisory agreement has been approved by the vote of a majority, as defined in
the ICA, of MACC's outstanding shares and by the Board of Directors, including a
majority of members who are not parties to such agreement or interested persons
of any such party.

         Section 8.  Assignment.

         This Agreement may not be assigned by any party without the written
consent of the other and any assignment, as defined in the ICA, by InvestAmerica
shall automatically terminate this Agreement.

         Section 9.  Amendments.

         This Agreement may be amended only by an instrument in writing
executed by all parties.

         Section 10.  Governing Law.

         This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Iowa.

         Section 11.  Termination of Prior Agreement.

         If as of the date hereof, this Agreement shall have been approved by
the Shareholders of MACC Private Equities, Inc. and the sole shareholder of
MACC, as set forth in Section 7 hereof, then as of the date hereof, the
MorAmerica Capital Corporation Investment Advisory Agreement dated as of October
1, 1994, between MACC and InvestAmerica, as previously amended, shall be
terminated and shall be of no further force and effect.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written,

                                            MORAMERICA CAPITAL CORPORATION

                                            By /s/ David R. Schroder
                                               ---------------------
                                            Title President
                                                  ---------

                                            INVESTAMERICA INVESTMENT
                                            ADVISORS, INC.


                                            By /s/ Robert A. Comey
                                               -------------------
                                            Title Executive Vice President
                                                  ------------------------


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