Document:

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                                                                   EXHIBIT 10.17

                                      NOTE

$47,718.00                                                  San Jose, California

                                                                 January 7, 1998

          FOR VALUE RECEIVED, Reed Taussig promises to pay to TallyUp Software
Inc., a Delaware corporation (the "Company"), or order, the principal sum of
forty-seven thousand seven hundred eighteen dollars ($47,718.00), together with
interest on the unpaid principal hereof from the date hereof at the rate of six
and thirteen one-hundredths percent (6.13%) per annum, compounded annually.

          Principal and interest shall be due and payable on January 7, 2008 or
immediately prior to such earlier time as the undersigned sells or otherwise
transfers all of the shares of Common Stock (the "Shares") purchased by the
undersigned pursuant to that certain Amended and Restated Stock Option Agreement
-- Early Exercise by and between the Company and the undersigned dated January
7, 1998 (the "Option Agreement"). In the event the undersigned sells or
otherwise transfers some, but less than all, of the Shares subject to pledge
contained in the Security Agreement by and between the Company and the
undersigned of even date herewith (the "Security Agreement"), then principal and
interest, in an amount equal to the product of (i) the quotient obtained by
dividing the number of such Shares sold or otherwise transferred by the
undersigned by the total number of Shares then subject to the pledge contained
in the Security Agreement and (ii) the total amount of principal and interest
then outstanding under this Note, shall be due and payable immediately prior to
such sale or transfer. The foregoing provisions relating to sales and transfers
shall not apply to any transfers not involving a change of beneficial ownership
(including without limitation transfers to trusts for the benefit of the
undersigned or the undersigned and members of his family), provided that all of
the restrictions and terms contained in the Option Agreement, including related
agreements, and the Security Agreement shall continue to apply to such Shares.
Payments of principal and interest shall be made in lawful money of the United
States of America.

          The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.

          This Note is secured in part by a pledge of certain assets of the
undersigned under the terms of a Security Agreement of even date herewith and is
subject to all the provisions thereof.

          The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.

<PAGE>

          Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.

                                                   /s/ Reed Taussig
                                                   ----------------
                                                   Reed Taussig
                                                   Print Name

<PAGE>

                               SECURITY AGREEMENT

         This Security Agreement is made as of January 7, 1998 between TallyUp
Software Inc., a Delaware corporation ("Pledgee"), and Reed Taussig ("Pledgor").

                                    Recitals

          Pursuant to Pledgor's election to exercise his option to purchase
shares of the Pledgee's Common Stock under the Amended and Restated Stock Option
Agreement -- Early Exercise dated January 7, 1998 (the "Option Agreement"),
between Pledgor and Pledgee under Pledgee's 1997 Stock Option Plan, and
Pledgor's election under the terms of the Option Agreement to pay for such
shares in part with his promissory note (the "Note"), Pledgor has purchased
482,000 shares of Pledgee's Common Stock (the "Shares") at a price of $0.10 per
share, for a total purchase price of $48,200, of which $47,718 was in the form
of the Note. The Note and the obligations thereunder are as set forth in Exhibit
A.

          NOW, THEREFORE, it is agreed as follows:

         1.       Creation and Description of Security Interest. In
consideration of the transfer of the Shares to Pledgor under the Option
Agreement, Pledgor, pursuant to the California Commercial Code, hereby pledges
Sunrise Professional (SIC), 680 Sunrise Ave. Roseville, CA (the "Collateral") as
security for Pledgor's obligations under the Note, subject to the terms and
conditions of this Security Agreement.

         2.       Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to Pledgee,
its successors and assigns, as follows:

                  a.       Payment of Indebtedness. Pledgor will pay the
principal sum of the Note secured hereby, together with interest thereon, at the
time and in the manner provided in the Note.

                  b.       Encumbrances. The fair market value of the Collateral
exceeds the sum of (i) the obligations under the Note and (ii) the sum of all
other obligations against which the Collateral is pledged or otherwise
encumbered (the sum of (i) and (ii) together are the "Total Encumbrances").
Pledgor may further encumber the Collateral so long as the Total Encumbrances do
not exceed the fair market value of the Collateral on the date that any such
additional encumbrance is incurred. Pledgor acknowledges that the holding period
pursuant to Rule 144 under the Securities Act of 1933, as amended, will be
tolled for any such period as the Total Encumbrances exceed the fair market
value of the Collateral.

         3.       Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:

                  a.       Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or

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                  b.       Pledgor fails to perform any of the covenants set
forth in the Option Agreement or contained in this Security Agreement for a
period of 10 days after written notice thereof from Pledgee.

          In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.

         4.       Release of Collateral. There shall be released from this
pledge a portion of the Collateral upon payments of the principal of the Note.
The portion of the Collateral which shall be released shall be that portion
which bears the same proportion to the initial Collateral pledged hereunder as
the payment of principal bears to the initial full principal amount of the Note.

         5.       Withdrawal or Substitution of Collateral. Except as permitted
in Section 2b hereof, Pledgor shall not sell, withdraw, pledge, substitute or
otherwise dispose of all or any part of the Collateral without the prior written
consent of Pledgee.

         6.       Term. The pledge of Collateral contained herein shall continue
until the payment of all indebtedness secured hereby, at which time the
remaining pledged Collateral shall be released from this pledge, subject to the
provisions for prior release of a portion of the Collateral as provided in
paragraph 4 above.

         7.       Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

         8.       Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.

         9.       Successors or Assigns. Pledgor and Pledgee agree that all of
the terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee" as
used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.

         10.      Governing Law. This Security Agreement shall be interpreted
and governed under the laws of the State of California.

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

          "PLEDGOR"                        By: /s/ Reed Taussig
                                               ----------------
                                           Reed Taussig
                                           Print Name

                                           Address:
                                           461 Van Buren Street
                                           Los Altos, CA 94022

          "PLEDGEE"                        TALLYUP SOFTWARE INC.,
                                           a Delaware corporation

                                           By: /s/ Andrew Swett
                                               ----------------

                                           Title: Secretary<PAGE>
                                                                   Exhibit 10.18

             CALLIDUS SOFTWARE INC. NON-PLAN STOCK OPTION AGREEMENT

      This Non-Plan Stock Option Agreement is entered into as of APRIL 2, 2002
("Date of Grant"), between Callidus Software Inc., a Delaware Corporation (the
"Company") and REED TAUSSIG (the "Optionee").

      1.    Option Grant. The Company hereby grants to Optionee an Option (the
"Option") to purchase 250,000 shares of common stock, par value $0.001, of the
Company ("Shares") at an exercise price of $0.50 per share, on the terms and
subject to the conditions set forth in this Option Agreement.

      2.    Option Exercise.

            (a)   Right to Exercise. To the extent the Option has become vested
in accordance with paragraph (b) below, the Option may be exercised at any time
during the term of the Option as set forth in Section 7. In the event of
termination of Optionee's employment with the Company, the exercisability of the
Option shall be governed by Section 7 of this Option Agreement.

            (b)   Vesting. The Shares subject to the Option shall become vested
and exercisable in accordance with the following schedule, subject to Optionee's
continuing employment with the Company or any of the Company's subsidiaries:

                  (i)   100% of the Shares subject to the Option shall become
                        vested and exercisable on the seventh anniversary of the
                        Date of Grant (the "Fully Vested Date").

                  (ii)  Notwithstanding Section 2(b)(i) above, upon the
                        occurrence of an Acceleration Event (as defined below),
                        one-forth (1/4th) of the Shares subject to the Option
                        shall become vested and exercisable upon the date of the
                        Acceleration Event, and one-thirty-sixth (1/36th) of the
                        Shares subject to the Option shall vest each month
                        thereafter,

            An "Acceleration Event" is defined as an Initial Public Offering of
            equity securities ("IPO") or upon a sale of the Company with a
            minimum valuation of $6.67 per share.

            (c)   Method of Exercise. During the term of the Option, Optionee
(or his representative, devisee or heir, as applicable) may exercise any vested
portion of the Option by delivering to the Company written notice in the form
attached hereto as Exhibit A together with payment of the exercise price. Such
written notice shall be signed by Optionee and shall be delivered in person or
by certified mail to the Company. The Option may not be exercised for a fraction
of a Share. Optionee shall not be entitled to any rights as a stockholder of the
Company in respect of any Shares covered by the Option until such Shares shall
have been paid for in full and issued to Optionee.
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      3.    Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933 ("Securities Act"), as amended, at the time the Option is
exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of the Option, deliver to the Company his
Investment Representation Statement in the form attached hereto as Exhibit B.

      4.    Definition of Fair Market Value. "Fair Market Value" means, as of
any date, the value of the common stock of the Company as determined in good
faith by the Board of Directors of the Company (the "Board"), provided, however,
that if on such date the common stock of the Company is listed on a national
stock exchange or quotation system, then the fair market value of the common
stock of the Company shall be the closing sales price for the last market
trading day prior to such date, as reported in The Wall Street Journal or such
other source as the Board deems reliable.

      5.    Method of Payment. Payment of the exercise price shall be made by
any of the following methods, or a combination thereof:

            (a)   cash;

            (b)   check; or

            (c)   surrender of other shares of common stock of the Company which
(A) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by Optionee for more than six (6) months (or such other period
required to avoid a charge to the Company's earnings) on the date of surrender,
and (B) have a Fair Market Value on the date of surrender equal to the exercise
price of the Shares as to which the Option is being exercised.

      6.    Restrictions on Exercise. No Shares shall be issued pursuant to the
exercise of an Option unless both the exercise of the Option and issuance of
Shares comply with all relevant provisions of applicable federal and state
securities and other laws and regulations and the requirements of any stock
exchange upon which the Shares may then be listed. As a condition to the
exercise of the Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.

      7.    Term of Option. The Option shall terminate on the tenth anniversary
of the Date of Grant, unless terminated earlier in accordance with the
provisions of Section 8 or in the following circumstances:

            (a)   Termination. In the event of termination of Optionee's
employment with the Company, other than upon Optionee's death or total and
permanent disability (as defined by Section 22(e)(3) of the Code
("Disability")), Optionee may, but only within three (3) months following the
date of such termination, exercise the Option to the extent it is vested on the
date of such termination. To the extent that Option was not vested on the date
of such termination, or if Optionee does not exercise the Option to the extent
so vested within such three-month period, the Option shall terminate.

            (b)   Disability of Optionee. Notwithstanding the provisions hereof,
in the event of termination of Optionee's employment with the Company as a
result of his Disability,

                                       2
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Optionee may, but only within twelve (12) months following the date of such
termination, exercise the Option to the extent otherwise so entitled on the date
of such termination. To the extent that Optionee was not entitled to exercise
the Option on the date of such termination, or if Optionee does not exercise the
Option to the extent so entitled within such 12-month period, the Option shall
terminate.

            (c)   Death of Optionee. Notwithstanding the provisions hereof, in
the event of termination of Optionee's employment with the Company as a result
of the death of Optionee, the Option may be exercised at any time within twelve
(12) months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent Optionee could have exercised the Option at the date of death. To the
extent that Optionee was not entitled to exercise the Option on the date of
death, or if the Option is not exercised to the extent exercisable within such
12-month period, the Option shall terminate.

      8.    Changes in Capitalization or Change of Control.

            (a)   Changes in Capitalization. The number of Shares of common
stock covered by the Option, as well as the price per share of common stock
covered by the Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of common stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the common stock, or any other increase or decrease in the number of issued
Shares of common stock effected without receipt of consideration by the Company
in a manner deemed equitable by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
Shares of stock of any class, or securities convertible into Shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares of common stock subject to the Option.

            (b)   Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company. Optionee shall have the right to
exercise the Option until fifteen (15) days prior to such transaction as to all
of the Shares covered thereby. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed action.

            (c)   Change of Control. In the event of a Change of Control, the
Option may be continued by the Company or may be assumed, or an equivalent
option may be substituted, and the Option terminated, by the successor
corporation or a parent or subsidiary of such successor corporation. Any portion
of the Option (including any portion which has become vested and exercisable
upon such Change of Control as a result of Section 2(b) hereof) that is not
continued or assumed by the Company or its successor, as applicable, shall be
exercisable for a period of time determined by the Board and to the extent not
exercised at the end of such period, shall terminate immediately on such Change
of Control. For the purposes hereof, "Change of Control" means:

                                       3
<PAGE>
                  (i)   The acquisition by any "person" (as such term is used in
                        Sections 13(d) and 14(d) of the Securities and Exchange
                        Act of 1934) of the "beneficial ownership" (as defined
                        in Rule 13d-3 under said Act), directly or indirectly,
                        of securities of the Company representing fifty percent
                        (50%) or more of the total voting power represented by
                        the Company's then outstanding voting securities (it
                        being understood that securities owned by any person on
                        the date hereof shall not be counted against such limit
                        with respect to such person); or

                  (ii)  change in the composition of the Board occurring within
                        a rolling two-year period, as a result of which fewer
                        than a majority of the directors are Incumbent
                        Directors. "Incumbent Directors" shall mean directors
                        who either (A) are members of the Board as of the date
                        hereof, or (B) are elected, or nominated for election,
                        to the Board with the affirmative votes of at least a
                        majority of the Incumbent Directors at the time of such
                        election or nomination (but shall not include an
                        individual not otherwise an Incumbent Director whose
                        election or nomination is in connection with an actual
                        or threatened proxy contest relating to the election of
                        directors to the Board); or

                  (iii) A merger or consolidation of the Company with any other
                        entity other than a merger or consolidation which would
                        result in the voting securities of the Company
                        outstanding immediately prior thereto continuing to
                        represent (either by remaining outstanding or by being
                        converted into voting securities of the surviving entity
                        (including the parent corporation of such surviving
                        entity)) at least fifty percent (50%) of the total
                        voting power represented by the voting securities of the
                        Company or such surviving entity outstanding immediately
                        after such merger or consolidation, or a sale or
                        disposition by the Company of all or substantially all
                        of the Company's assets.

      9.    Lock-up Agreement. Optionee hereby agrees that if so requested by
the Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the Company under the
Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period following the
effective date of any registration statement of the Company filed under the
Securities Act. The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such
180-day period.

      10.   Non-Transferability of Option. The Option may not be transferred in
any manner other than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.

                                       4
<PAGE>
      11.   At-Will Employment. The Option does not confer on Optionee any right
to continue in the employ of the Company or any Subsidiary or interfere in any
way with the right of the Company or any Subsidiary to determine the terms of
Optionee's employment.

      12.   Tax Consequences.

            (a)   The Option is a nonstatutory stock option. Optionee
understands that he may incur federal and state income tax liability upon the
exercise of the Option and upon the subsequent disposition of the Shares.
Optionee represents that he has consulted with a tax advisor in connection with
the purchase or disposition of the shares and that he is not relying on the
Company for tax advice.

            (b)   By exercising the Option, Optionee agrees that, as a condition
to any exercise of the Option, the Company may require Optionee to enter into an
arrangement providing for the payment by Optionee to the Company of any tax
withholding obligation of the Company arising thereby. At any time Optionee
exercises the Option, in whole or in part, or at any time as requested by the
Company, Optionee hereby authorizes withholding from payroll and any other
amounts payable to Optionee, any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Company, if any, which
arise in connection with the Option.

      13.   Delegation. Optionee acknowledges that any powers, rights or
responsibilities of the Board set forth herein may be delegated to and exercised
by any subcommittee thereof.

      14.   Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

      15.   Successors and Assigns. The Company may assign any of its rights
under this Option Agreement to single or multiple assignees, and this Option
Agreement shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Option
Agreement shall be binding upon Optionee and his executors, administrators,
successors and assigns.

      16.   Entire Agreement. This Option Agreement contains the entire
understanding of the parties hereto in respect of the subject matter contained
herein. This Option Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.

      17.   Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
application of the conflict of laws principles thereof.

      18.   Counterparts. This Option Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                       5
<PAGE>
      Optionee hereby accepts the Option subject to all of the terms and
provisions of this Option Agreement. Optionee has reviewed this Option Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing the Option and fully understands all provisions of this Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under this
Option Agreement. Optionee further agrees to notify the Company upon any change
in the residence address indicated below.

CALLIDUS SOFTWARE INC.                  OPTIONEE
a Delaware Corporation                  /s/ Reed Taussig
                                        ----------------------------------
                                        Print Name: Reed D. Taussig
By: /s/ RON FIOR
    ------------------------------      Residence Address:
      Name:  Ron Fior                    731 Linden Avenue
      Title: VP Finance and CFO         ----------------------------------
                                         Los Altos, CA 94022
Address:                                ----------------------------------
160 West Santa Clara Avenue
San Jose, CA  95113

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