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                           MACC PRIVATE EQUITIES INC.
                          INVESTMENT ADVISORY AGREEMENT

         This INVESTMENT ADVISORY AGREEMENT dated as of March 1, 1998 (the
"Agreement") by MACC Private Equities Inc., a company organized under the laws
of the State of Delaware ("the Company"), and InvestAmerica Investment Advisors,
Inc., a corporation organized under the laws of the State of Delaware
("InvestAmerica").

         WHEREAS, the Company is a closed-end investment company that may be
operated and regulated as a business development company ("Business Development
Company") as defined in the Investment Company Act of 1940, as amended (the
"ICA");

         WHEREAS, the Company 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 the
Company's assets managed by InvestAmerica under this Agreement averaged over the
prior one year period.

         1.3 "Capital Losses" are those which are placed, consistent with
generally accepted accounting principles, on the books of the Company 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 the Company determines that a
         loss or depreciation in value from the value on the date of this
         Agreement should be taken by the Company 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 ("Unrealized Depreciation"); 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 the
Company writes down the value of any investment in the Company'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 for such investment shall thereafter be used in the
determination of any Realized Capital Gains or Capital Losses in the Company'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  "The Company" shall mean MACC Private Equities Inc.

         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 a the Company 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 "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, 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 the following sentence. 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 the
Company.

         1.12 "SBA" shall mean the United States Small Business Administration.

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

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

         2.1 As such, InvestAmerica will:


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                  (a) Manage, render advice with respect to, and make decisions
         regarding the acquisition and disposition of securities in accordance
         with applicable law and the Company'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 the Company'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, outside auditors and the
         provision of other services appropriate to the management of a business
         development company;

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

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

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

                  (e) Report to the Company'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 the Company 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 the Company shall at all times
         be subject to applicable law and any directives of the Company's Board
         of Directors or any duly constituted committee or officer acting
         pursuant to the authority of the Company'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 the Company.



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         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
the Company and will be paid promptly by the Company: 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 the Company and its directors and Board fees; any fees owed
or paid to the Company its Affiliates or fund managers; any and all expenses
associated with property of a Portfolio Company taken or received by the Company
or on its behalf as a result of its investment in any Portfolio Company; all
reorganization and registration expenses of the Company; the fees and
disbursements of the Company'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 the Company'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 the Company; and all transaction costs incident to the
acquisition, management and protection of and disposition of securities by the
Company.

         Section 3.  Nonexclusive Obligations; Co-investments.

         3.1 The obligations of InvestAmerica to the Company 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 the Company to other persons for whom InvestAmerica is
providing services. Neither InvestAmerica nor any of its Affiliates shall in any
manner be liable to the Company 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 the Company'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 the Company:



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

                  (b) The Company 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, the Company 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 Company has an opportunity
to coinvest with the Iowa Fund or Other Venture Capital Funds, investment
opportunities shall be offered to the Company and the Iowa Fund or the Other
Venture Capital Funds, as the case may be, (a) in the same proportion as its
private capital (as defined in the SBA regulations) bears to the total private
capital of the Company and the Iowa Fund or the Other Venture Capital Funds, as
the case maybe, in the aggregate or (b) in such other manner as is otherwise
agreed upon by the Company 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 Company will control as to the terms
of co-investments with the Iowa Fund and the Other Capital Venture Funds.

         3.4 InvestAmerica will cause to be offered to the Company 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 the Company's Board
of Directors, InvestAmerica is authorized to effect acquisitions and
dispositions of securities for the Company's account in InvestAmerica's
discretion. Where such approval is required, InvestAmerica is authorized to
effect acquisitions and dispositions for the Company's account upon and to the
extent of such approval. The Company will put InvestAmerica in funds whenever
InvestAmerica requires funds for an acquisition of securities in accordance with
the foregoing, and the Company 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 Section 3.1 for any
funds or persons in addition to the Iowa Fund, InvestAmerica will notify the
Company, 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.



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         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 the Company in writing, in
regard to such actions and decisions the Company 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
such actions, without specific authority from the Board of Directors of the
Company, 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 the Company has invested or in which the Company
is proposing to invest in connection with an investment transaction in which the
Company participates or provides managerial assistance, will be treated as
commitment fees or management fees and will be received by the Company, 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 Directors of the Company, such
officer or director of InvestAmerica shall not receive compensation as a member
of the Board of Directors of the Company.

         Section 5.  Management and Incentive Fees.

         5.1 During the term of this Agreement, the Company will pay
InvestAmerica monthly in arrears a management fee equal to 2.5% per annum of the
Assets Under Management. The Management fee shall be calculated on a
non-consolidated basis, excluding MACC.

         5.2 During the term of this Agreement the Company shall pay to
InvestAmerica an incentive fee determined as specified in this Section 5.2. The
incentive fee shall be calculated on a nonconsolidated basis, excluding MACC.

                  (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 the Company's Portfolio Companies or resulting
                  from the disposition of other assets or property of the
                  Company 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



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                  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 incentive fee shall not be computed on any
                  assets received by the Company from the Company's predecessors
                  by merger, MorAmerica Financial Corporation and Morris Plan
                  Liquidation Company, and such assets shall not be included in
                  any calculation of Net Capital Gains.

                  (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, incentive fees shall be
                  paid, in cash, in arrears on the last business day of each
                  fiscal quarter in the fiscal year.

                           (ii) The incentive fee shall be retroactively
                  adjusted as soon as practicable following completion of the
                  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 than
                  it is entitled to hereunder, InvestAmerica shall promptly
                  reimburse the Company for the amount of the excess.

         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 the Company, or
any of its Affiliates for any error in judgment or mistake of law made by the
Indemnified Parties in connection with any investment made by or for the
Company, 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. The Company confirms that in performing services hereunder
InvestAmerica will be an agent of the Company for the purpose of the
indemnification provisions of the Bylaws of the Company subject, however, to the
same limitations as though InvestAmerica were a director or officer of the
Company. InvestAmerica shall not be liable to the Company, 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 the Company and InvestAmerica's
Affiliate, InvestAmerica Venture Group, Inc., dated as of May 13, 1985 and all
amendments and renewals thereto. In the addition, the provisions of this Section
6.1 shall survive termination of this Agreement.




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

         Section 7.  Shareholder Approval; Term.

         The Company represents that this Agreement has been approved by the
Company'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 the Company 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 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 the Company's outstanding voting securities. The foregoing notwithstanding,
this Agreement may be terminated by the Company at any time, without payment of
any penalty, on 60 days' written notice to 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 the Company's outstanding voting securities.
InvestAmerica may also terminate this Agreement on 60 days' written notice to
the Company; 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 the Company'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. Upon receipt
of any such notice from InvestAmerica, the Company will in good faith use its
best efforts to cause an advisory agreement to be entered into by the Company
with a suitable investment adviser.

         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



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         If as of the date hereof, this Agreement shall have been approved by
the shareholders of the Company as set forth in Section 7 hereof, then as of the
date hereof, the MACC Private Equities Inc. Investment Advisory Agreement, dated
as of October 1, 1994, between the Company 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.

                                          MACC PRIVATE EQUITIES INC.


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

                                          INVESTAMERICA INVESTMENT
                                          ADVISORS, INC.


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



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