POINT WEST CAPITAL CORPORATION

                        Incentive Stock Option Agreement
                        --------------------------------

                  INCENTIVE STOCK OPTION AGREEMENT,dated as of November 25,1998
(this  "Agreement"),  between              ("Optionee")  and Point West  Capital
                              -------------
Corporation, a Delaware corporation (the "Company").

                              W I T N E S S E T H:

                  WHEREAS, Optionee is an employee of the Company;

                  WHEREAS,  the execution of an incentive stock option agreement
in the form hereof has been duly authorized by a resolution of the  Compensation
Committee  (the  "Committee")  of the Board of  Directors  ("the  Board") of the
Company duly adopted (i) at a regular or special  meeting of the Committee  held
on, or (ii) by the  unanimous  written  consent of the members of the  Committee
effective on, November 25, 1998 (the "Date of Grant") and incorporated herein by
reference; and
                  WHEREAS,  the option  granted  hereunder  is intended to be an
"incentive  stock  option"  within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual agreements herein contained, the parties hereto hereby agree as follows:

                  1.(a) Option. Pursuant to the Company's 1995 Stock Option Plan
                        ------ 
(the "Plan"),  the Company hereby grants to Optionee an option (the "Option") to
purchase 10,000 shares (the "Option  Shares") of the Company's Common Stock, par
value $.01 per share  ("Common  Shares"),  at the price of $2.475 per share (the
"Option Price"), which is 110% of the fair market value of the Common Shares (as
determined  by the  Committee)  on the  Date  of  Grant,  and  agrees  to  cause
certificates  for any Common  Shares  purchased  hereunder  to be  delivered  to
Optionee  upon payment in full of the Option  Price,  subject to the  applicable
terms and  conditions of the Plan and the terms and conditions  hereinafter  set
forth.


<PAGE>



                  2.  Vesting of Option Shares.
                      ------------------------

                  (a) Unless and until terminated as hereinafter provided,  the
Option shall become exercisable to the extent of 25% of the Option Shares on the
first anniversary of the Date of Grant and to the extent of an additional 25% on
each of the second  through the fourth  anniversary of the Date of Grant so long
as Optionee has remained in the continuous employ of the Company or a Subsidiary
from the date hereof through such date. For the purposes of this Agreement,  the
continuous  employment of Optionee with the Company or a Subsidiary shall not be
deemed to have been interrupted, and Optionee shall not be deemed to have ceased
to be an employee of the Company or a Subsidiary,  by reason of (i) the transfer
of Optionee's  employment among the Company and its Subsidiaries or (ii) a leave
of absence approved by the Board of not more than 90 days, unless Optionee has a
statutory or contractual  right to reemployment with the Company or a Subsidiary
following an approved  leave of absence of more than 90 days. To the extent that
the Option shall have so become exercisable,  it may be exercised in whole or in
part from time to time.

                  (b) Notwithstanding  the  provisions of paragraph 2(a) above,
the Option shall become  immediately  exercisable  to the extent of 100% of the
Option  Shares  upon the  occurrence  of a Change in  Control.  If any event or
series of events  constituting  a Change in  Control  shall be  abandoned,  the
effect  thereof  shall be null  and of no  further  force  and  effect  and the
provisions  of Section 2(a) shall be  reinstated  but without  prejudice to any
exercise of the Option that may have occurred prior to such nullification.

                  (c) Notwithstanding  the  provisions of paragraph 2(a) above,
the Option shall become  immediately  exercisable  to the extent of 100% of the
Option Shares upon the death or Disability of Optionee.

                   3. Exercises.
                      ---------

                  (a) This  Option,  to the extent  exercisable  as provided in
Section 2, may be  exercised  by  Optionee by delivery to the Company of (i) an
Exercise   Notice  in  the  form  attached  to  this   Agreement  as  Annex  A,
appropriately  completed and duly executed and dated by Optionee,  (ii) payment
in full of the Option Price for the number of Option  Shares which  Optionee is
purchasing  hereunder,  and (iii) payment in full to the Company of any amounts
required to be paid pursuant to Section 3(c).

                  (b) The Option  Price  shall be payable  (a) in cash or check
acceptable to the Company, (b) by transfer to the Company of Common Shares that
have been  owned by  Optionee  for (i) more than one year  prior to the date of
exercise  and for more than two years  from the date on which  the  option  was
granted,  if they were originally acquired by Optionee pursuant to the exercise
of an incentive stock option, or (ii) more than six months prior to the date of
exercise,  if they were originally  acquired by Optionee other than pursuant to
the exercise of an incentive  stock option,  or (c) by a combination  of any of
the foregoing  methods of payment.  The requirement of payment in cash shall be
deemed satisfied if Optionee shall have made  arrangements  satisfactory to the
Company with a broker who is a member of the National Association of Securities
Dealers, Inc. to sell on the date of exercise a sufficient number of the Common
Shares being purchased so that the net proceeds of the sale transaction will at
least equal the aggregate Option Price, plus interest at the applicable federal
rate for the  period  from 


<PAGE>


the date of exercise to the date of payment,  and  pursuant to which the broker
undertakes to deliver the aggregate  Option Price,  plus such interest,  to the
Company  not later than the date on which the sale  transaction  will settle in
the ordinary course of business.


                  (c) If the Company shall be required to withhold any federal,
state,  local or foreign tax in connection  with an exercise of the Option,  it
shall  be a  condition  to the  exercise  that  Optionee  pay  the  tax or make
provisions that are satisfactory to the Company for the payment thereof.


                  4.  Termination of Option.
                      ---------------------- 

                  The Option shall terminate on the earliest of the following
     dates:

                  (a) The date on which  Optionee  ceases to be an  employee of
     the Company or a  Subsidiary  unless he ceases to be such an employee in a
     manner described in (b) or (c) below.

                  (b) 90 days after  Optionee  ceases to be an  employee of the
     Company or any Subsidiary if (A) Optionee retires from employment with the
     Company  or any  Subsidiary  after  reaching  the age of 65 years,  or (B)
     Optionee's employment is terminated under circumstances  determined by the
     Committee to be for the convenience of the Company.

                  (c) One year after the date on which Optionee's employment is
     terminated as a result of Optionee's  death or Disability (as  hereinafter
     defined).

                  (d) Five years from the Date of Grant.

In the event that Optionee commits an act that the Board determines to have been
intentionally committed and materially inimical to the interests of the Company,
the  Option  shall  terminate  as of the  time of the  commission  of that  act,
notwithstanding  any  other  provision  of this  Agreement.  In the  event  that
Optionee's  employment is terminated by the Company for Cause,  the Option shall
terminate as of the time  Optionee's  employment is terminated,  notwithstanding
any other provision of this Agreement.

                  5.  No Transfer of Option.
                      ----------------------

                  The Option may not be  transferred  except by will or the laws
of descent and  distribution  and may not be  exercised  during the  lifetime of
Optionee  except by Optionee  or  Optionee's  guardian  or legal  representative
acting on behalf of Optionee in a fiduciary  capacity  under state law and court
supervision.

                  6.  Limitations on Exercise of Option.
                      ----------------------------------

                  Notwithstanding  any other  provision of this  agreement,  the
Option shall not be exercisable if the exercise would involve a violation of any
applicable  federal  or  state  securities  law,  and  the  Company  shall  make
reasonable efforts to comply with all such laws.


<PAGE>


                  7.  Adjustments.
                      -----------

                  (a) The Committee may make or provide for such adjustments in
the number and kind of Option Shares  (including  shares of another issuer) and
in the  Option  Price,  as the  Committee  may in good  faith  determine  to be
equitably  required in order to prevent  dilution or expansion of the rights of
Optionee that otherwise would result from (a) any stock dividend,  stock split,
combination  of  shares,  recapitalization  or  other  change  in  the  capital
structure of the Company, or (b) any merger, consolidation, spin-off, spin-out,
split-off, split-up,  reorganization,  partial or complete liquidation or other
distribution  of assets,  issuance  of  warrants  or other  rights to  purchase
securities or any other corporate transaction or event having an effect similar
to the foregoing.

                  (b) In the  event  of any  such  transaction  or  event,  the
Committee  may  provide  in  substitution   for  the  Option  such  alternative
consideration  as it may in good  faith  determine  to be  equitable  under the
circumstances  and may require in  connection  therewith  the  surrender of the
Option.

                  8.  No Right to Employment.
                      ----------------------

                  No  provision  of  this  agreement  shall  limit  in  any  way
whatsoever  any right that the Company or a  Subsidiary  may  otherwise  have to
terminate the employment of Optionee at any time.

                  9.  Rights as a Stockholder.
                      -----------------------

                  The  holder of this  Option  shall not be, nor have any of the
rights or  privileges  of, a holder of Common  Shares in  respect  of any Option
Shares unless and until  certificates  representing such shares have been issued
by the Company to such holder.

                  10. Limitation on Incentive Stock Options.
                      ------------------------------------- 
              
                  Notwithstanding  the intent  that the Option be an  "incentive
stock option" within the meaning of that term under Section 422 of the Code, the
option will be treated as a  non-qualified  stock  option to the extent that the
fair  market  value of the  shares  with  respect to which any  incentive  stock
options are  exercisable for the first time by Optionee during any calendar year
(under all of the Company's plans and those of any of its  subsidiaries)  exceed
$100,000.  This rule shall be applied by taking any options  into account in the
order in which they were granted.

                  11. Required Holding Period.
                      ------------------------ 
 
                  Notwithstanding  the provisions of Section 2(b), to the extent
necessary  for the Option,  its exercise or the sale of Option  Shares  acquired
thereunder  to be exempt from  Section  16(b) of the  Exchange  Act of 1934,  as
amended,  (i) except in the case of  Optionee's  death or  Disability,  Optionee
shall not be  entitled  to  exercise  the  Option  until the  expiration  of the
six-month  period following the Date of Grant, or (ii) at least six months shall
elapse from the Date of Grant to the date of  disposition  of the Option  Shares
acquired upon exercise of the Option.


<PAGE>


                  12. Definitions.
                      -----------

                  For the purposes of this  Agreement,  the following terms have
the following meanings:

                  (a) "Cause" means (i) the  commission by Optionee of an act of
fraud or  embezzlement  against the Company or an act which the Optionee knew to
be in gross  violation  of  Optionee's  duties  to the  Company  (including  the
unauthorized disclosure of confidential information),  (ii) Optionee's continual
failure to render  services to the Company,  which  failure (A) amounts to gross
neglect of  Optionee's  duties to the Company and (B) is not remedied  within 10
days after notice thereof by the Company,  or (iii)  Optionee's  conviction of a
felony.

                  (b) "Change in Control" means the occurrence of any of the 
following events:

                  (i) The  execution  by the  Company  of an  agreement  for the
         merger,   consolidation   or   reorganization   into  or  with  another
         corporation  or other legal  person;  provided,  however,  that no such
                                               --------   -------
         merger,  consolidation or  reorganization  shall constitute a Change in
         Control if as a result of such merger,  consolidation or reorganization
         not  less  than  a  majority  of  the  combined  voting  power  of  the
         then-outstanding  securities of such corporation or person  immediately
         after such  transaction  are held in the  aggregate  by the  holders of
         securities of the Company entitled to vote generally in the election of
         Directors ("Voting Stock") immediately prior to such transaction;

                  (ii) The execution by the Company of an agreement for the sale
         or other transfer of all or substantially  all of its assets to another
         corporation or other legal person; provided, however, that no such sale
                                            --------  -------
         or other transfer  shall  constitute a Change in Control if as a result
         of such sale or  transfer  not less  than a  majority  of the  combined
         voting power of the then-outstanding  securities of such corporation or
         person immediately after such sale or transfer is held in the aggregate
         by the  holders  of  Voting  Stock  immediately  prior to such  sale or
         transfer.

                  (iii)  There is a report  filed on  Schedule  13D or  Schedule
         14D-1 (or any successor schedule,  form or report), each as promulgated
         pursuant to the  Exchange Act  disclosing  that any person (as the term
         "person"  is  used in  Section  13(d)(3)  or  Section  14(d)(2)  of the
         Exchange  Act) (other than any of Bradley N. Rotter,  Alan B. Perper or
         John  Ward  Rotter  or  any  of  their  respective  family  members  or
         affiliates) has or intends to become the beneficial  owner (as the term
         "beneficial owner" is defined under Rule 13d-3 or any successor rule or
         regulation   promulgated   under  the  Exchange   Act)  of   securities
         representing   20%  or  more  of  the  combined  voting  power  of  the
         then-outstanding Voting Stock, including, without limitation,  pursuant
         to a tender offer or exchange offer;

                  (iv)  If,  during  any  period  of  two   consecutive   years,
         individuals  who at the  beginning  of any such period  constitute  the
         directors of the Company  cease for any reason to constitute at least a
         majority  thereof;  provided,   however,  that  for  purposes  of  this
                             --------    -------
         subsection (iv) each director who is first elected,  or first nominated
         for  election  by the  Company's  stockholders,  by a vote of at  least
         two-thirds  of the  directors  of the Company (or a committee  thereof)
         then still in office who were directors of the Company at the beginning
         of any such  period  shall be  deemed to have  been a  director  of the
         Company at the beginning of such period; or


<PAGE>



                  (v) except pursuant to a transaction  described in the proviso
         to subsection (i) of this Section 12(b),  the Company adopts a plan for
         the liquidation or dissolution of the Company.

                  (c)    "Disability"  means, as of any date, becoming disabled 
within the meaning of such term in Section 22(e)(3) of the Code.

                  (d)    "Subsidiary" means any corporation in which the Company
directly  or  indirectly  owns or  controls  more than 50  percent  of the total
combined voting power of all classes of stock issued by the corporation.

                  13. Severability.
                      ------------

                  In the  event  that  one or  more  of the  provisions  of this
agreement  shall  be  invalidated  for  any  reason  by  a  court  of  competent
jurisdiction,  any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining  provisions hereof shall continue
to be valid and fully enforceable.

                  14. Governing Law.
                      -------------

                  This  agreement  is made  under,  and  shall be  construed in
accordance with, the laws of the State of Delaware.

                  This  Agreement is executed by the Company as of the     day
                                                                      -----
of                  .
  ---------,------
                                              POINT WEST CAPITAL CORPORATION


                                             By:
                                              ---------------------------   
                                              John Ward Rotter    
                                              CFO

                  The  undersigned Optionee hereby  acknowledges  receipt of an

executed  original of this  Incentive  Stock Option  Agreement and the Plan and

accepts the Option  subject to the  applicable terms and conditions of the Plan

and the terms and conditions hereinabove set forth.

                                              
                                              ------------------------------
                                              Optionee (Signature)


                                              Name:  -----------------------

                                              Dated as of November 17, 1997


<PAGE>



                                     ANNEX A
                                       to
                        Incentive Stock Option Agreement
                        --------------------------------
                
                            Form of Exercise Notice
                            ------------------------


                Pursuant to the  Incentive  Stock Option  Agreement  dated as of
----------------               
 between the undersigned and Point West Capital Corporation (the
"Company"), the undersigned hereby elects to exercise his option as follows:

                (a)      Number of shares purchased:
                                                    --------------------

                (b)      Total purchase price ((a) x Option Price):$
                                                                    -------- 
 
                Please issue a single certificate for the shares being purchased
in the name of the  undersigned.  The  registered  address  on such  certificate
should be:

                             ---------------               

                             ---------------

The undersigned's social security number is:                    .
                                            ---------------.
 

Date:                                        -------------------------
     ---------------                             Optionee