Document:

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                                                                     EXHIBIT 4.1

                                     CALLIDUS SOFTWARE INC.

                                      AMENDED AND RESTATED

                          REGISTRATION AND INFORMATION RIGHTS AGREEMENT

         This Amended and Restated Registration and Information Rights Agreement
(the "AGREEMENT") is made effective as of December 24, 2002 by and among
Callidus Software Inc., a Delaware corporation (the "COMPANY"), the purchasers
(the "PURCHASERS") of Series G Preferred Stock of the Company as set forth in
Exhibit A attached hereto pursuant to the Series G Preferred Stock Purchase
Agreement dated as of the date hereof (the "PURCHASE AGREEMENT"), the holder of
Series A Preferred Stock as set forth in Exhibit A attached hereto (the "SERIES
A HOLDER"), the holders of Series B Preferred Stock as set forth in Exhibit A
attached hereto (the "SERIES B HOLDERS"), the holders of Series C Preferred
Stock as set forth in Exhibit A attached hereto (the "SERIES C HOLDERS"), the
holders of Series D Preferred Stock as set forth in Exhibit A attached hereto
(the "SERIES D HOLDERS"), the holders of Series E Preferred Stock as set forth
in Exhibit A attached hereto (the "SERIES E HOLDERS"), the holders of the Series
F Preferred Stock and Warrants as set forth in Exhibit A attached hereto (the
"SERIES F HOLDERS"), Andrew L. Swett and Scott Kitayama (the "FOUNDERS"),
Transamerica Business Credit Corporation Funding Trust II ("TRANSAMERICA") and
the holders of Warrants to purchase Common Stock of the Company as set forth in
Exhibit A hereto (the "WARRANT HOLDERS").

                                    RECITALS

         A.       The Company, the Series A Holder, the Series B Holders, the
Series C Holders, the Series D Holders, the Series E Holders, the Series F
Holders, Transamerica and the Founders are parties to the Company's Registration
and Information Rights Agreement, as amended and restated effective as of March
13, 2001, as further amended by that certain Amendment No. 1 to Amended and
Restated Registration and Information Rights Agreement effective as of October
26, 2001 (the "RESTATED AGREEMENT").

         B.       The Company, the Series A Holder, the Series B Holders, the
Series C Holders, the Series D Holders, the Series E Holders, the Series F
Holders, Transamerica and the Founders wish to induce the Purchasers to purchase
the Series G Preferred Stock by amending and restating the Restated Agreement to
add the Purchasers as parties and make certain other changes.

         C.       Section 11 of the Restated Agreement allows for amendment and
the addition of parties with the consent of the Company, the holders of a
majority of the Registrable Securities and the holders of a majority of the
Registrable Securities of any class affected in a manner different from the
holders generally.

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         D.       The obligations of the Company and the Purchasers under the
Purchase Agreement are conditioned, among other things, upon the execution and
delivery of this Agreement by the Company and the Purchasers.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, all parties hereto agree as follows:

         1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:

                  "COMMISSION" means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.

                  "CONVERSION STOCK" means the Common Stock issued or issuable
pursuant to (i) conversion of the Preferred Stock and (ii) the Series F Warrants
(or any underlying convertible security issued or issuable pursuant to such
warrants), to the extent not otherwise already included in clause (i).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar Federal rule or statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.

                  "FOUNDERS' STOCK" means the Common Stock acquired by the
Founders pursuant to the Founder's Stock Purchase Agreements with the Company;
provided, however, that, for the purposes of Sections 5.1, 5.2 and 5.3,
Founders' Stock shall not include any Common Stock subject to a right of
repurchase in favor of the Company pursuant to a Founder's Stock Purchase
Agreement between the Company and a Founder unless, until, and to the extent
that such right of repurchase has lapsed.

                  "HOLDER" means any Series A Holder, Series B Holder, Series C
Holder, Series D Holder, Series E Holder, Series F Holder, Purchaser, Founder,
Transamerica or Warrant Holder holding Registrable Securities, or any person
holding Registrable Securities to whom the rights under this Agreement have been
transferred in accordance with Section 5.10 hereof.

                  "INITIATING HOLDERS" means any Holder or Holders who, in the
aggregate, hold not less than the required percentage of the Registrable
Securities then outstanding (the "REQUIRED PERCENTAGE"). The Required Percentage
shall be (i) 50% for the purposes of Section 5.1 or (ii) 25% for the purposes of
Section 5.3 hereof, in each case exclusive of Founder's Stock.

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                  "PREFERRED STOCK" shall mean the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock, the Series E Preferred Stock, and Series F Preferred Stock and Series G
Preferred Stock of the Company.

                  "REGISTRABLE SECURITIES" means (i) the Conversion Stock, (ii)
the Founders' Stock, (iii) the Warrant Stock, (iv) any Common Stock of the
Company issued or issuable in respect of any of the foregoing upon any
conversion, stock split, stock dividend, recapitalization, or similar event;
provided, however, that securities shall only be treated as Registrable
Securities if and so long as (i) they have not been registered or sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction and (ii) the registration rights with respect to such
securities have not terminated pursuant to Section 5.11.

                  The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

                  "REGISTRATION EXPENSES" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Sections 5.1,
5.2 and 5.3 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company). Registration Expenses shall also include
the fees and disbursements for one special counsel to the selling stockholders,
not to exceed $20,000 per registration, for one (1) registration pursuant to
Section 5.1, one (1) registration pursuant to Section 5.2 and three (3)
registrations pursuant to Section 5.3 hereof.

                  "RESTRICTED SECURITIES" shall mean the securities of the
Company required to bear the legends set forth in Section 3 hereof.

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar Federal rule or statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.

                  "SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and, except as set forth above, all fees and
disbursements of counsel for any Holder.

                  "WARRANTS" shall mean (i) the warrant for the purchase of
17,500 shares of Common Stock issued to Transamerica on March 26, 1999, (ii) the
warrant for the purchase of 4,375 shares of Common Stock issued to Transamerica
on May 31, 2000, (iii) the warrant for the purchase of 19,133 shares of Series F
Preferred Stock issued to Transamerica on September 28, 2001, (iv) any other
warrant issued in connection with the Loan and Security Agreement between the
Company and Transamerica Business Credit Corporation dated March 26, 1999, as
amended from time to time and

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(v) all warrants to purchase Common Stock issued in connection with the Closing
of the sale of the Series F Preferred Stock on March 13, 2001.

                  "WARRANT STOCK" shall mean the Common Stock issued or issuable
upon exercise of the Warrants.

         2. RESTRICTIONS ON TRANSFERABILITY. The Preferred Stock, the Conversion
Stock, the Founders' Stock, the Warrants, the Warrant Stock and any other
securities issued in respect of such stock upon any stock split, stock dividend,
recapitalization, merger, or similar event, shall not be sold, assigned,
transferred or pledged except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Each Holder or transferee will cause any proposed purchaser,
assignee, transferee, or pledgee of any such shares held by the Holder or
transferee to agree to take and hold such securities subject to the restrictions
and upon the conditions specified in this Agreement, including without
limitation the restrictions set forth in Sections 7 and 10.

         3. RESTRICTIVE LEGEND. Each certificate representing the Preferred
Stock, the Conversion Stock, the Founders' Stock, the Warrant Stock or any other
securities issued in respect of such stock upon any stock split, stock dividend,
recapitalization, merger, or similar event, shall (unless otherwise permitted by
the provisions of Section 4 below) be stamped or otherwise imprinted with
legends in substantially the following form (in addition to any legends required
by agreement or by applicable state securities laws):

                  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
                  HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
                  IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. SUCH
                  SHARES GENERALLY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
                  OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF
                  COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR
                  TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
                  DELIVERY REQUIREMENTS OF SAID ACT.

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
                  LOCKUP PERIOD OF UP TO 180-DAYS FOLLOWING THE EFFECTIVE DATE
                  OF CERTAIN REGISTRATION STATEMENTS OF THE COMPANY FILED UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED, AS SET FORTH IN AN
                  AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
                  SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
                  OFFICE OF THE ISSUER. SUCH LOCKUP PERIOD IS BINDING ON
                  TRANSFEREES OF THESE SHARES.

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                  Each Holder consents to the Company making a notation on its
records and giving instructions to any transfer agent of its capital stock in
order to implement the restrictions on transfer established in this Agreement.

         4. NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Without in any way limiting the
immediately preceding sentence, no sale, assignment, transfer or pledge of
Restricted Securities shall be made by any holder thereof to any person unless
such person shall first agree in writing to be bound by the restrictions of this
Agreement including, without limitation, Section 7 and this Section 4. Prior to
any proposed sale, assignment, transfer or pledge of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to
the Company of such holder's intention to effect such transfer, sale, assignment
or pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and, if
requested by the Company, the holder shall also provide, at such holder's
expense, either (i) a written opinion of legal counsel who shall be, and whose
legal opinion shall be, reasonably satisfactory to the Company addressed to the
Company, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (ii) a "no
action" letter from the Commission to the effect that the transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, whereupon the
holder of such Restricted Securities shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
the holder to the Company; provided, however, that the Company shall not request
an opinion of counsel or a "no action" letter with respect to (i) a transfer not
involving a change in beneficial ownership, (ii) a transaction involving the
distribution without consideration of Restricted Securities by the holder to its
constituent partners or members in proportion to their ownership interests in
the holder, (iii) a transaction involving the transfer without consideration of
Restricted Securities by an individual holder during such holder's lifetime by
way of gift or on death by will or intestacy, or (iv) a transfer or assignment
by The Goldman Sachs Group, L.P. and/or its affiliates (collectively, "GOLDMAN")
to a successor entity in connection with a public offering by Goldman. Each
certificate evidencing the Restricted Securities transferred as above provided
shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in Section 3 above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for such holder and counsel for the Company such legend is not required in order
to establish compliance with any provision of the Securities Act.
Notwithstanding the foregoing, each holder of Restricted Securities agrees that
it will not request that a transfer of the Restricted Securities be made or that
the legend set forth in Section 3 be removed from the certificate representing
the Restricted Securities, solely in reliance on Rule 144(k) if, as a result
thereof, the Company would be rendered subject to the reporting requirements of
the Exchange Act.

         5. REGISTRATION.

                  5.1      REQUESTED REGISTRATION.

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                           (a)      Request for Registration. In case the
Company shall receive from Initiating Holders a written request that the Company
effect any registration with respect to shares of Registrable Securities, the
Company will:

                                    (i)      promptly give written notice of the
proposed registration to all other Holders; and

                                    (ii)     as soon as practicable, use its
best efforts to effect such registration as part of a firm commitment
underwritten public offering with underwriters reasonably acceptable to the
Initiating Holders and the Company (including, without limitation, appropriate
qualification under applicable state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request by delivering a written notice to such effect to the Company within
twenty (20) days after the date of such written notice from the Company.

         Notwithstanding the foregoing, the Company shall not be obligated to
take any action to effect or complete any such registration pursuant to this
Section 5.1:

                                             (A)      Prior to the earlier of
(i) 180 days after the effective date of the Company's first registered public
offering of its Common Stock or (ii) December 31, 2004;

                                             (B)      Unless the requested
registration would include at least 20% of the Registrable Securities or any
lesser percentage so long as the aggregate offering price of all Registrable
Securities sought to be registered by all Holders, net of underwriting discounts
and commissions, would exceed $30,000,000;

                                             (C)      During the period starting
with the date sixty (60) days prior to the Company's estimated date of filing
of, and ending on the date six (6) months immediately following the effective
date of any registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan), provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective;

                                             (D)      After the Company has
effected one registration pursuant to this subparagraph 5.1(a), and such
registration has been declared or ordered effective; or

                                             (E)      If the Company shall
furnish to the Initiating Holders a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its stockholders for a
registration statement to be filed in the near future. In such case, the
Company's obligation to use its

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best efforts to register, qualify or comply under this Section 5.1(a) shall be
deferred for a period not to exceed 180 days from the date of receipt of the
written request from the Initiating Holders, provided that the Company may not
exercise this deferral right more than once per twelve month period.

         Subject to the foregoing clauses (A) through (E), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders.

                           (b)      Underwriting. In the event of a registration
pursuant to Section 5.1, the Company shall advise the Holders as part of the
notice given pursuant to Section 5.1(a)(i) that the right of any Holder to
registration pursuant to Section 5.1 shall be conditioned upon such Holder's
participation in the underwriting arrangements required by this Section 5.1, and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested shall be limited to the extent provided herein.

         The Company shall, together with all Holders proposing to distribute
their securities through such underwriting, enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Initiating Holders, but subject to the
Company's reasonable approval. Notwithstanding any other provision of this
Section 5.1, if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Company shall so advise all Holders requesting to be
included in the registration and underwriting, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all Holders requesting to be included in the
registration and underwriting in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by them at the time of filing
the registration statement, provided, however, that in the event of such
limitation on the number of shares to be underwritten, then no shares of
Founder's Stock shall be included unless all shares of Registrable Securities
held requested by the Holders other than the Founders, including any shares
issued in respect thereof upon conversion or otherwise, to be included in such
underwriting are so included. No Registrable Securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any Holder to the nearest 100 shares. If any
Holder of Registrable Securities disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company.

                  5.2      COMPANY REGISTRATION.

                           (a)      Notice of Registration. If at any time or
from time to time the Company shall determine to register any of its equity
securities, either for its own account or the account of a Holder or other
holders, other than (i) a registration relating solely to employee benefit
plans, (ii) a registration relating solely to a Rule 145 transaction, or (iii) a
registration in which the

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only equity security being registered is Common Stock issuable upon conversion
of convertible debt securities which are also being registered, the Company
will:

                                    (i)      promptly give to each Holder
written notice thereof; and

                                    (ii)     include in such registration (and
any related qualifications including compliance with Blue Sky laws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 20 days after the date of such written
notice from the Company, by any Holder.

                           (b)      Underwriting. If the registration of which
the Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 5.2(a)(i). In such event, the right of any
Holder to registration pursuant to Section 5.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.

                           All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other Holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 5.2, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities to be included in such
registration (i) in the case of the Company's initial public offering, to zero,
and (ii) in the case of any other offering, to an amount no less than 33-1/3% of
all shares to be included in such offering. The Company shall so advise all
Holders requesting to be included in the registration and underwriting and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all the Holders
requesting to be included in the registration and underwriting in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities held
by them at the time of filing the registration statement, provided, however,
that in the event of such limitation on the number of shares to be underwritten,
then no shares of Founder's Stock shall be included unless all shares of
Registrable Securities held requested by the Holders other than the Founders to
be included in such underwriting are so included. To facilitate the allocation
of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the
nearest 100 shares. If any Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company.

                           (c)      Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 5.2 prior to the effectiveness of such registration whether
or not any Holder has elected to include securities in such registration.

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                  5.3      REGISTRATION ON FORM S-3.

                           (a)      Request for Registration. In case the
Company shall receive from Initiating Holders a written request that the Company
file a registration statement on Form S-3 (or any successor form to Form S-3)
for a public offering of shares of the Registrable Securities the aggregate
price to the public of which, net of underwriting discounts and commissions,
would exceed $1,500,000, and the Company is a registrant entitled to use Form
S-3 to register the Registrable Securities for such an offering, the Company
shall use its best efforts to cause such Registrable Securities to be registered
for the offering on such form and to cause such Registrable Securities to be
qualified in such jurisdictions as such Holder or Holders may reasonably
request; provided, however, that the Company shall not be required to effect
more than one registration pursuant to this Section 5.3 in any twelve (12) month
period. If such offer is to be an underwritten offer, the underwriters must be
acceptable to both the Initiating Holders and the Company. The Company shall
inform the other Holders of the proposed registration and offer them upon at
least twenty (20) days written notice the opportunity to participate. In the
event the registration is proposed to be part of a firm commitment underwritten
public offering, the substantive provisions of Section 5.1(b) shall be
applicable to each such registration initiated under this Section 5.3.

                           (b)      Notwithstanding the foregoing, the Company
shall not be obligated to take any action pursuant to this Section 5.3:

                                    (i)      If the Company, within ten (10)
days of the receipt of the request of the Initiating Holders, gives notice of
its bona fide intention to effect the filing of a registration statement with
the Commission within ninety (90) days of receipt of such request (other than
with respect to a registration statement relating to a Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities);

                                    (ii)     During the period starting with the
date sixty (60) days prior to the Company's estimated date of filing of, and
ending on the date six (6) months immediately following the effective date of,
any registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or

                                    (iii)    If the Company shall furnish to the
Initiating Holders a certificate signed by the President of the Company stating
that, in the good faith judgment of the Board of Directors, it would be
seriously detrimental to the Company or its stockholders for a registration
statement to be filed in the near future, then the Company's obligation to use
its best efforts to file a registration statement shall be deferred for a period
not to exceed 180 days from the receipt of the request to file such registration
by such Initiating Holder or Holders, provided that the Company may not exercise
this deferral right more than once per twelve month period.

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                  5.4      SUBSEQUENT REGISTRATION RIGHTS.

                           (a)      Without the consent of any holder of
Registrable Securities hereunder, the Company may grant to any holder of
securities of the Company registration rights inferior to those granted
hereunder.

                           (b)      Subject to Section 11, the Company may enter
into an agreement granting any holder or prospective holder of any securities of
the Company registration rights superior to or on a pari passu basis with the
rights granted the Holders hereunder only if the Company first obtains the
written consent of the holders of a majority of the Registrable Securities.

                  5.5      EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with (i) one registration pursuant to Section 5.1, (ii)
all registrations pursuant to Section 5.2, and (iii) all registrations pursuant
to Section 5.3 shall be borne by the Company. Notwithstanding the foregoing, in
the event that Initiating Holders cause the Company to begin a registration
pursuant to Section 5.1 or Section 5.3, and the request for such registration is
subsequently withdrawn by the Initiating Holders or such registration is not
completed due to failure to meet the net proceeds requirement set forth in such
section or is otherwise not successfully completed due to no fault of the
Company, all Holders shall be deemed to have forfeited their right to one
registration under Section 5.1, or a registration under Section 5.3 for a period
of 12 months, as applicable, unless the Initiating Holders pay for, or reimburse
the Company for, the Registration Expenses incurred in connection with such
withdrawn or incomplete registration. Unless otherwise stated, all Selling
Expenses relating to securities registered on behalf of the Holders and all
other registration expenses shall be borne by the Holders of such securities pro
rata on the basis of the number of shares so registered or proposed to be so
registered.

                  5.6      REGISTRATION PROCEDURES. In the case of each
registration effected by the Company pursuant to this Agreement, the Company
will keep each Holder advised in writing as to the initiation of such
registration and as to the completion thereof. The Company will:

                           (a)      Prepare and file with the Commission a
registration statement and such amendments and supplements as may be necessary
and use its best efforts to cause such registration statement to become and
remain effective for at least 90 days or until the distribution described in the
registration statement has been completed, whichever first occurs; and

                           (b)      Furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities.

                  5.7      INDEMNIFICATION.

                           (a)      The Company will indemnify each Holder, each
of its officers and directors and partners, and each person controlling such
Holder within the meaning of Section 15 of

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the Securities Act, with respect to which registration has been effected
pursuant to this Agreement, against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Company of the Securities Act, the Exchange Act, state
securities laws or any rule or regulation promulgated under such laws applicable
to the Company in connection with any such registration, and the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission, or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder or controlling person, and
stated to be specifically for use therein; provided, however, that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any such untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus on file with the Commission at the
time the registration statement becomes effective or the amended prospectus
filed with the Commission pursuant to Rule 424(b) (the "FINAL PROSPECTUS"), such
indemnity agreement shall not inure to the benefit of any Holder, if a copy of
the Final Prospectus was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act, and if the Final Prospectus would have cured the defect
giving rise to the loss, liability, claim or damage.

                           (b)      Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which such registration
is being effected, indemnify the Company, each of its directors and officers,
other holders of the Company's securities covered by such registration
statement, each person who controls the Company within the meaning of Section 15
of the Securities Act, and each other such Holder, each of its officers and
directors and each person controlling such Holder within the meaning of Section
15 of the Securities Act, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Holder of the Securities Act, the Exchange Act, state
securities laws or any rule or regulation promulgated under such laws applicable
to the Holder, and will reimburse the Company, such other Holders, such
directors, officers, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such claim, loss, damage,
liability or action, but in the case of the Company or the other Holders or
their officers, directors or controlling

                                       11

<PAGE>

persons, only to the extent that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with information furnished to the Company by such Holder.
Notwithstanding the foregoing, the liability of each Holder under this
subsection 5.7(b) shall be limited to an amount equal to the net proceeds from
the offering received by such Holder.

                           (c)      Each party entitled to indemnification under
this Section 5.7 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide indemnification (the "INDEMNIFYING PARTY") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
there are separate and different defenses. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

                  5.8      INFORMATION BY HOLDER. The Holder or Holders of
Registrable Securities included in any registration shall furnish to the Company
such information regarding such Holder or Holders, the Registrable Securities
held by them and the distribution proposed by such Holder or Holders as the
Company may request in writing and as shall be required in connection with any
registration referred to in this Agreement.

                  5.9      RULE 144 REPORTING. With a view to making available
the benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Restricted Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to use all reasonable efforts to:

                           (a)      Make and keep public information available,
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times after the effective date that the Company becomes subject to the
reporting requirements of the Securities Act or the Exchange Act;

                           (b)      File with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements); and

                                       12

<PAGE>

                           (c)      So long as a Holder owns any Restricted
Securities, to furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of said Rule
144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as the
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing the Holder to sell any such securities without
registration.

                  5.10     TRANSFER OF REGISTRATION RIGHTS. The rights to cause
the Company to register securities granted to Holders under Sections 5.1, 5.2
and 5.3 may be assigned to a transferee or assignee reasonably acceptable to the
Company in connection with any transfer or assignment of Registrable Securities
by the Holder provided that: (i) such transfer is otherwise effected in
accordance with applicable securities laws and the terms of this Agreement, (ii)
such assignee or transferee (together with its affiliates, as such term is
defined in Rule 405 of the Securities Act) acquires at least 500,000 shares (as
adjusted for stock splits, stock dividends, stock combinations and the like) of
Registrable Securities (including Preferred Stock convertible into Registrable
Securities), (iii) written notice is promptly given to the Company and (iv) such
transferee agrees to be bound by the provisions of this Agreement.
Notwithstanding the foregoing, the rights to cause the Company to register
securities may be assigned without compliance with item (ii) above to (x) any
constituent partner or member of a Holder which is a partnership or limited
liability company, or an affiliate (as such term is defined in Rule 405 of the
Securities Act) of a Holder which is a corporation, partnership or limited
liability company, a successor entity to any of the foregoing, or an officer,
shareholder or other equity holder of a Holder and, in the case of this clause
(x), such person shall be deemed "reasonably acceptable" to the Company, or (y)
a family member or trust for the benefit of a Holder who is an individual, or a
trust for the benefit of a family member of such a Holder.

                  5.11     TERMINATION OF REGISTRATION RIGHTS. The rights
granted pursuant to Sections 5.1, 5.2 and 5.3 of this Agreement shall terminate
as to any Holder upon the earlier of (i) the date five years after the effective
date of the Company's initial public offering and (ii) provided that the
Company's shares are traded on a national stock exchange or the Nasdaq National
Market System, such time as the Registrable Securities held by the Holder
represent less than 1% of the outstanding capital stock of the Company or such
Holder may sell all of such Registrable Securities in any single three-month
period under Rule 144.

         6. FINANCIAL INFORMATION RIGHTS.

                           (a)      The Company will provide the following
reports to each Series A Holder, Series B Holder, Series C Holder, Series D
Holder, Series E Holder, Series F Holder and Purchaser who continues to hold
shares of Preferred Stock or Conversion Stock:

                                    (i)      As soon as practicable after the
end of each fiscal year, and in any event within 120 days after the end of each
such fiscal year, consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such fiscal year, and consolidated
statements of

                                       13

<PAGE>

operations and consolidated statements of cash flows and stockholders' equity of
the Company and its subsidiaries, if any, for such year, prepared in accordance
with generally accepted accounting principles and setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and audited by independent public accountants of national standing
selected by the Company, and a capitalization table in reasonable detail for
such fiscal year; and

                                    (ii)     As soon as practicable after the
end of the first, second and third quarterly accounting periods in each fiscal
year of the Company, and in any event within forty-five (45) days thereafter, a
consolidated balance sheet of the Company and its subsidiaries, if any, as of
the end of each such quarterly period, and consolidated statements of operations
and consolidated statements of cash flows of the Company and its subsidiaries,
if any, for such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles (other than
accompanying notes), subject to changes resulting from year-end audit
adjustments, in reasonable detail and signed by the principal financial or
accounting officer of the Company, and a capitalization table in reasonable
detail for such quarterly period.

                           (b)      The Company will provide the following
information to each Series A Holder, Series B Holder, Series C Holder, Series D
Holder, Series E Holder, Series F Holder and Purchaser that continues to hold at
least 1,500,000 shares of Registrable Securities:

                                    (i)      At least 30 days prior to the
beginning of each fiscal year, a budget as adopted by the Company's Board of
Directors for the fiscal year; and

                                    (ii)     As soon as practicable after the
end of the first and second month of each quarterly accounting period, a
consolidated balance sheet of the Company and its subsidiaries (if any), as of
the end of each such monthly period, and consolidated statements of operations
and consolidated statements of cash flows of the Company and its subsidiaries
(if any), for such persons and for the current quarter to date, prepared in
accordance with generally accepted accounting principles (other than
accompanying notes), subject to changes resulting from quarter-end and year-end
adjustments, in reasonable detail and signed by the principal financial or
accounting officer of the Company.

                           (c)      For purposes of determining the minimum
holdings pursuant to this Section 6, any Series A Holder, Series B Holder,
Series C Holder, Series D Holder, Series E Holder, Series F Holder or Purchaser
that is a partnership or limited liability company shall be deemed to hold any
Preferred Stock originally purchased by such Series A Holder, Series B Holder,
Series C Holder, Series D Holder, Series E Holder, Series F Holder or Purchaser
and subsequently distributed to constituent partners or members of such Series A
Holder, Series B Holder, Series C Holder, Series D Holder, Series E Holder,
Series F Holder or Purchaser, but which have not been resold by such partners or
members. If the partnership or limited liability company is still in existence,
the Company may satisfy any obligation to distribute reports to individual
partners of the partnership or members of a limited liability company by
delivering a single copy of each report to the partnership or limited liability
company as agent for the constituent partners or members.

                                       14

<PAGE>

                           (d)      The rights granted pursuant to Section 6(b)
may be assigned to any transferee, other than a competitor or potential
competitor of the Company (as reasonably determined by the Company's Board of
Directors), that holds or acquires (together with its affiliates, as such term
is defined in Rule 405 of the Securities Act) at least 1,500,000 shares of
Registrable Securities (as adjusted for stock splits, stock dividends, stock
combinations and the like), so long as such transferee agrees in writing to be
bound by the provisions of Section 6(e), below.

                           (e)      Each Series A Holder, Series B Holder,
Series C Holder, Series D Holder, Series E Holder, Series F Holder, Purchaser or
transferee of rights under this Section 6 acknowledges and agrees that any
information obtained pursuant to this Section 6 which may be considered
nonpublic information will be maintained in confidence by such Series A Holder,
Series B Holder, Series C Holder, Series D Holder, Series E Holder, Series F
Holder, Purchaser or transferee and will not be utilized by such Series A
Holder, Series B Holder, Series C Holder, Series D Holder, Series E Holder,
Series F Holder, Purchaser or transferee in connection with purchases or sales
of the Company's securities except in compliance with applicable state and
Federal securities laws.

                           (f)      The covenants of the Company set forth in
this Section 6 shall terminate and be of no further force or effect upon the
closing of a firm commitment underwritten public offering or at such time as the
Company is required to file reports pursuant to Section 13 or 15(d) of the
Exchange Act, whichever shall occur first.

         7. LOCKUP AGREEMENT. Each Series A Holder, Series B Holder, Series C
Holder, Series D Holder, Series E Holder, Series F Holder, Purchaser, Founder,
Transamerica, Warrant Holder and transferee who receives Conversion Stock,
Founders' Stock, Warrant Stock and any Common Stock of the Company issued or
issuable in respect of any of the foregoing upon any conversion, stock split,
stock dividend, recapitalization, or similar event, hereby agrees that, in
connection with the first registration of the offering of any securities of the
Company under the Securities Act for the account of the Company, if so requested
by the Company or any representative of the underwriters (the "MANAGING
UNDERWRITER"), such Series A Holder, Series B Holder, Series C Holder, Series D
Holder, Series E Holder, Series F Holder, Purchaser, Founder, Transamerica,
Warrant Holder or transferee shall not sell or otherwise transfer any securities
of the Company during the period specified by the Company's Board of Directors
at the request of the Managing Underwriter (the "MARKET STANDOFF PERIOD"), with
such period not to exceed 180 days following the effective date of the
registration statement of the Company filed under the Securities Act with
respect to such offering. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period. The Company shall use its reasonable best efforts
to place similar contractual lockup restrictions on all capital stock issued now
or hereafter to officers, directors, employees and consultants of the Company,
and holders of registration rights with respect to capital stock of the Company,
unless determined otherwise by the Company's Board of Directors (including the
affirmative vote of a majority of the directors designated by the holders of
Preferred Stock, for so long as the holders of Preferred Stock, voting as a
separate class, are entitled, under the Company's Certificate of Incorporation,
to elect directors). Notwithstanding the foregoing, the provisions of this
Section 7 shall not apply to a registration

                                       15

<PAGE>

relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms which may be promulgated in the future, or a registration relating solely
to a transaction within Rule 145 of the Securities Act on Form S-4 or similar
form which may be promulgated in the future. Notwithstanding the foregoing,
Goldman may engage in brokerage, investment advisory, investment company,
financial advisory, anti-raid advisory, financing, asset management, trading,
market making, arbitrage and other similar activities conducted in the ordinary
course of their business to the extent Goldman would have engaged in these
activities without regard to its ownership of shares of the Company's Series D
Preferred Stock, Series E Preferred or Stock Series F Preferred Stock.

         8. (INTENTIONALLY LEFT BLANK)

         9. (INTENTIONALLY LEFT BLANK)

         10. VOTING AGREEMENT. In connection with any election of the Company's
Board of Directors, the Holders and Founders hereby agree to vote all shares of
Common Stock then held by them in favor of electing the Company's chief
executive officer, currently Reed D. Taussig, and Andrew L. Swett to the Board
of Directors. For so long as the Company's Certificate of Incorporation provides
that the holders of Common Stock exclusively are entitled to fill one or more
Board seats, the seats so filled by the Company's chief executive officer and
Andrew L. Swett shall be deemed to constitute two (2) of such seats to be filled
exclusively by the holders of Common Stock. This Section 10 is intended by the
parties hereto to be a voting agreement within the meaning of Section 218(c), or
any successor provision, of the General Corporation Law of Delaware. Each
certificate representing the stock subject to this voting agreement shall be
stamped or otherwise imprinted with a legend in substantially the following form
(in addition to any legends required by agreement or by applicable state
securities laws):

         THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING
         AGREEMENT SET FORTH IN AN AGREEMENT BETWEEN THE HOLDER, THE ISSUER, AND
         CERTAIN OTHER HOLDERS OF STOCK OF THE ISSUER, A COPY OF WHICH MAY BE
         OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.

         The requirements of this Section 10 shall terminate and be of no
further force or effect upon the closing of the Company's initial public
offering of its Common Stock pursuant to a registration statement declared
effective by the Commission.

         11. AMENDMENT. Except as otherwise provided above, additional parties
may be added to this Agreement, any provision of this Agreement may be amended
or the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. Notwithstanding the foregoing, no amendment shall
be made to this Agreement which by its terms adversely affects, or which was
motivated primarily by an intent to adversely affect, a particular class of
Holders (i.e., Founders, Series A Holder, Series B Holders, Series C Holders,
Series D Holders, Series E Holders, Series F Holders, Purchasers, Transamerica
or Warrant Holder) in a manner differently from the other Holders without the
written consent of a majority of

                                       16

<PAGE>

the Registrable Securities held by the Holders in such adversely affected class.
In addition, the Founders hereby agree that any amendment pursuant to Section
5.4 in connection with any subsequent rounds of financing described therein
shall not require the consent of the Founders. Any amendment or waiver effected
in accordance with Section 5.4 or Section 11, as applicable, shall be binding
upon each Series A Holder, Series B Holder, Series C Holder, Series D Holder,
Series E Holder, Series F Holder, Purchaser, Founder, Transamerica, Warrant
Holder or Holder of Registrable Securities at the time outstanding, each future
holder of any of such securities, and the Company. The Company, the Holders and
the Founders hereby agree that, with the exception of Section 8 of the Restated
Agreement, which shall remain in full force and effect among the parties to the
Restated Agreement, this Agreement shall supersede the Restated Agreement in all
respects, and that the Restated Agreement shall have no further force or effect
from and after the date hereof.

         Notwithstanding the foregoing, the Holders and the Founders hereby
consent to the Amendment of this Agreement for the purpose of adding as
additional parties purchasers of additional shares of Series G Preferred Stock
in one or more closings after the date hereof pursuant to the terms of the
Purchase Agreement.

         12. GOVERNING LAW. Except for Section 10 ("VOTING AGREEMENT"), which by
its terms is intended to be governed by Delaware law, this Agreement shall be
governed in all respects by the internal laws of the State of California without
regard to conflict of laws provisions.

         13. ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and Agreement among the parties regarding the matters set forth
herein. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the successors, assigns,
heirs, executors and administrators of, the parties hereto.

         14. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission, by hand or by messenger, addressed:

                  (a)      if to a Holder, at such Holder's address as set forth
in Exhibit A, or at such other address as such Holder shall have furnished to
the Company.

                  (b)      if to the Company, to:

                           Callidus Software Inc.
                           160 West Santa Clara Avenue
                           15th Floor
                           San Jose, California 95113
                           Attn: Reed D. Taussig
                           Fax: (408) 271-2662

                                       17

<PAGE>

         or at such other address as the Company shall have furnished to the
Holders, with a copy to:

                           Davis Polk & Wardwell
                           1600 El Camino Real
                           Menlo Park, CA 94025
                           Attn: Francis S. Currie, Esq.
                           Fax: (650) 752-2111

                  Each such notice or other communication shall for all purposes
of this Agreement be treated as effective or having been given when delivered if
delivered personally, if sent by facsimile, the first business day after the
date of confirmation that the facsimile has been successfully transmitted to the
facsimile number for the party notified, or, if sent by mail, at the earlier of
its receipt or 72 hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.

         15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                                       18

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.

                                                  "COMPANY"

                                                  Callidus Software Inc.,
                                                  a Delaware Corporation

                                                  By: /s/ Reed D. Taussig
                                                      --------------------------
                                                      Reed D. Taussig, President

                                        "PURCHASERS"

                                        ONSET ENTERPRISE ASSOCIATES II,
                                          L.P.

                                        By: OEA II Management, L.P., The
                                            General Partner of ONSET Enterprise
                                            Associates II, L.P.

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        ONSET ENTERPRISE ASSOCIATES
                                          III, L.P.

                                        By: OEA III Management, L.P., The
                                            General Partner of ONSET Enterprise
                                            Associates III, L.P.

                                        By: /s/ Terry Opdendyk
                                            ------------------------------------
                                            Name:
                                            Title:

                                       19

<PAGE>

                                        CROSSPOINT VENTURE PARTNERS
                                          LS 2000

                                        By: /s/ John Mumford
                                            ------------------------------------
                                            Name:
                                            Title:

                                        EAGLE VENTURES WF, LLC

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                        CRESCENDO WORLD FUND, LLC

                                        By: Crescendo Ventures WF, LLC,
                                            Managing Member

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                        CROSSPOINT VENTURE PARTNERS
                                          1997 L.P.

                                        By: CROSSPOINT ASSOCIATES 1997,
                                            L.L.C., General Partner

                                        By: /s/ John Mumford
                                            ------------------------------------
                                            Name:
                                            Title:

                                       20

<PAGE>

                                        PRISMA GERMAN AMERICAN
                                          VENTURE PARTNERS GBR

                                        By: Crescendo Capital Management,
                                            LLC

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                        ________________________________________

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        CHANCELLOR V, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By:      /s/ Johnston Evans
                                            ------------------------------------
                                        Name:
                                        Title:

                                       21

<PAGE>

                                        CHANCELLOR V-A, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By:      /s/ Johnston Evans
                                            ------------------------------------
                                        Name:
                                        Title:

                                        EUROMEDIA VENTURE FUND (cotenancy
                                        of IPC Direct Associates V, L.L.C. and
                                        EuroMedia Venture Belgique SA)

                                        By: IPC EuroMedia Associates, L.L.C.,
                                            its Managing Member

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By:      /s/ Johnston Evans
                                            ------------------------------------
                                        Name:
                                        Title:

                                        CITIVENTURE 2000, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By:      /s/ Johnston Evans
                                            ------------------------------------
                                        Name:
                                        Title:

                                       22

<PAGE>

                                        "HOLDERS"

                                        THE GOLDMAN SACHS GROUP, INC.

                                        By:      /s/ John Bowman
                                            ------------------------------------
                                            Name: John E. Bowman
                                            Title: Attorney-in Fact

                                        STONE STREET FUND 1998, L.P.
                                        By: Stone Street 1998, L.L.C.

                                        By:      /s/ John Bowman
                                            ------------------------------------
                                            Name: John E. Bowman
                                            Title: Vice President

                                        STONE STREET FUND 1999, L.P.
                                        By: Stone Street 1999, L.L.C.

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        BRIDGE STREET FUND 1998, L.P.
                                        By: Stone Street 1998, L.L.C.

                                        By:      /s/ John Bowman
                                            ------------------------------------
                                            Name: John E. Bowman
                                            Title: Vice President

                                       23

<PAGE>

                                        ONSET ENTERPRISE ASSOCIATES II,
                                            L.P.

                                        By: OEA II Management, L.P., The
                                            General Partner of ONSET Enterprise
                                            Associates II, L.P.

                                        By: /s/ Terry Opdendyk
                                            ------------------------------------
                                            Name:
                                            Title:

                                        ONSET ENTERPRISE ASSOCIATES
                                            III, L.P.

                                        By: OEA III Management, L.P., The
                                            General Partner of ONSET Enterprise
                                            Associates III, L.P.

                                        By: /s/ Terry Opdendyk
                                            ------------------------------------
                                            Name:
                                            Title:

                                        CROSSPOINT VENTURE PARTNERS
                                            LS 2000

                                        By: /s/ John Mumford
                                            ------------------------------------
                                            Name:
                                            Title:

                                        EAGLE VENTURES WF, LLC

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                       24

<PAGE>

                                        CRESCENDO WORLD FUND, LLC

                                        By: Crescendo Ventures WF, LLC,
                                            Managing Member

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                        CROSSPOINT VENTURE PARTNERS
                                          1997 L.P.

                                        By: CROSSPOINT ASSOCIATES 1997,
                                            L.L.C., General Partner

                                        By: /s/ John Mumford
                                            ------------------------------------
                                            Name:
                                            Title:

                                        PRISMA GERMAN AMERICAN
                                          VENTURE PARTNERS GBR

                                        By: Crescendo Capital Management,
                                            LLC

                                        By: /s/ Kevin Spreng
                                            ------------------------------------
                                            Name:
                                            Title:

                                       25

<PAGE>

                                        CHANCELLOR V, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By: ____________________________________
                                        Name:
                                        Title:

                                        CHANCELLOR V-A, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By: ____________________________________
                                        Name:
                                        Title:

                                        EUROMEDIA VENTURE FUND (cotenancy
                                        of IPC Direct Associates V, L.L.C. and
                                        EuroMedia Venture Belgique SA)

                                        By: IPC EuroMedia Associates, L.L.C.,
                                            its Managing Member

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By: ____________________________________
                                        Name:
                                        Title:

                                       26

<PAGE>

                                        CITIVENTURE 2000, L.P.

                                        By: IPC Direct Associates V, L.L.C.,
                                            its General Partner

                                        By: INVESCO Private Capital, Inc.,
                                            its Managing Member

                                        By:      /s/ Johnston Evans
                                            ------------------------------------
                                        Name:
                                        Title:

                                       27

<PAGE>

                                    EXHIBIT A

                          (to the Amended and Restated

                  Registration and Information Rights Agreement

                              dated March 13, 2001)

                               SCHEDULE OF HOLDERS

"THE FOUNDERS"

Andrew L. Swett                         492,224 shares of Common Stock
2004 Avy Avenue
Menlo Park, CA 94025
Scott Kitayama                          210,901 shares of Common Stock
209 Cypress Point Drive
Mountain View, CA 94043

"THE SERIES A HOLDER"

ONSET ENTERPRISE ASSOCIATES II, L.P.    1,000,000 shares of Series A Preferred
2490 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

"THE SERIES B HOLDERS"

ONSET ENTERPRISE ASSOCIATES II, L.P.    600,000 shares of Series B Preferred
2490 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

CROSSPOINT VENTURE PARTNERS 1997 L.P.   1,000,000 shares of Series B Preferred
2925 Woodside Road                      Stock
Woodside, CA 94062
Attn: John Mumford
Fax: (650) 851-7661

                                       28

<PAGE>

"THE SERIES C HOLDERS"

ONSET ENTERPRISE ASSOCIATES II, L.P.    761,422 shares of Series C Preferred
2490 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

CROSSPOINT VENTURE PARTNERS 1997 L.P.   634,518 shares of Series C Preferred
2925 Woodside Road                      Stock
Woodside, CA 94062
Attn: John Mumford
Fax: (650) 851-7661

CRESCENDO WORLD FUND, LLC (formerly     1,332,145 shares of Series C Preferred
IAI WORLD FUND, LLC)                    Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

EAGLE VENTURES WF, LLC                  63,794 shares of Series C Preferred
800 LaSalle Avenue, Suite 2250          Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

PRISMA GERMAN AMERICAN VENTURE          126,904 shares of Series C Preferred
PARTNERS GBR                            Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

WS INVESTMENT COMPANY 98A               12,690 shares of Series C Preferred
c/o Wilson Sonsini Goodrich & Rosati    Stock
650 Page Mill Road
Palo Alto, CA  94304
Attn: Gail Husick
Fax: (650) 493-6811

                                       29

<PAGE>

HUSICK FAMILY TRUST U/D/T FEB. 7, 1996  12,690 shares of Series C Preferred
c/o Wilson Sonsini Goodrich & Rosati    Stock
650 Page Mill Road
Palo Alto, CA  94304
Attn: Gail Husick
Fax: (650) 493-6811

"THE SERIES D HOLDERS"

THE GOLDMAN SACHS GROUP, L.P.           1,941,748 shares of Series D Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

STONE STREET FUND 1999, L.P.            323,624 shares of Series D Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

STONE STREET FUND 1998, L.P.            248,597 shares of Series D Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

BRIDGE STREET FUND 1998, L.P.           75,027 shares of Series D Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

ONSET ENTERPRISE ASSOCIATES II, L.P.    323,624 shares of Series D Preferred
2490 Sand Hill Road                     Stock
Menlo Park, CA 94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

                                       30

<PAGE>

CROSSPOINT VENTURE PARTNERS 1997 L.P.   323,624 shares of Series D Preferred
2925 Woodside Road                      Stock
Woodside, CA 94062
Attn: John Mumford
Fax: (650) 851-7661

PRISMA GERMAN AMERICAN VENTURE          53,938 shares of Series D Preferred
PARTNERS GBR                            Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

EAGLE VENTURES WF, LLC                  27,114 shares of Series D Preferred
800 LaSalle Avenue, Suite 2250          Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

CRESCENDO WORLD FUND, LLC               566,197 shares of Series D Preferred
800 LaSalle Avenue, Suite 2250          Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

"THE SERIES E HOLDERS"

THE GOLDMAN SACHS GROUP, INC.           145,834 shares of Series E Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

STONE STREET FUND 1998, L.P.            16,000 shares of Series E Preferred
85 Broad Street                         Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

                                       31

<PAGE>

BRIDGE STREET FUND 1998, L.P.           4,833 shares of Series E Preferred Stock
85 Broad Street
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

ONSET ENTERPRISE ASSOCIATES II, L.P.    41,666 shares of Series E Preferred
2490 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

CROSSPOINT VENTURE PARTNERS LS 1999     833,334 shares of Series E Preferred
2925 Woodside Road                      Stock
Woodside, CA 94062
Attn: John Mumford
Fax: (650) 851-7661

PRISMA GERMAN AMERICAN VENTURE          52,500 shares of Series E Preferred
PARTNERS GBR                            Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

CRESCENDO WORLD FUND, LLC               477,150 shares of Series E Preferred
800 LaSalle Avenue, Suite 2250          Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

EAGLE VENTURES WF, LLC                  23,333 shares of Series E Preferred
800 LaSalle Avenue, Suite 2250          Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

                                       32

<PAGE>

The Alexander Group, Inc.               58,334 shares of Series E Preferred
90 New Montgomery St.                   Stock
Suite 250
San Francisco, CA 94105
Attn: Robert Conti
Fax: (415) 550-6411

Robert Conti                            8,334 shares of Series E Preferred Stock
834 Dolores St.
San Francisco, CA 94110
Fax: (415) 550-6411

David Cichelli                          8,334 shares of Series E Preferred Stock
11 Trivota
Irvine, CA 92720
(714) 838-9367

Gary Tubridy                            8,334 shares of Series E Preferred Stock
14 Glen Avon
Riverside, CT 06878
Fax: (203) 637-4923

Robert Hawk                             35,000 shares of Series E Preferred
2925 Woodside Road                      Stock
Woodside, CA 94062
Fax: (650) 851-7661

ONSET ENTERPRISE ASSOCIATES II, L.P.    41,668 shares of Series E Preferred
2400 Sand Hill Road, Suite 150          Stock
Menlo Park, CA  94025
Attn: Terry L. Opdendyk
Fax: (650) 529-0777

ONSET ENTERPRISE ASSOCIATES III, L.P.   500,000 shares of Series E Preferred
2400 Sand Hill Road, Suite 150          Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

"TRANSAMERICA"

                                       33

<PAGE>

TRANSAMERICA BUSINESS CREDIT            17,500 shares of Warrant Stock
CORPORATION FUNDING TRUST II
Riverway II, West Office Tower
9399 West Higgins Road
Rosemont, IL 60018
Attn: Legal Department

TRANSAMERICA BUSINESS CREDIT            4,375 shares of Warrant Stock
CORPORATION FUNDING TRUST II
Riverway II, West Office Tower
9399 West Higgins Road
Rosemont, IL 60018
Attn: Legal Department

TRANSAMERICA BUSINESS CREDIT            Warrant to purchase 19,133 shares of
CORPORATION FUNDING TRUST II            Series F Preferred Stock
Riverway II, West Office Tower
9399 West Higgins Road
Rosemont, IL 60018
Attn: Legal Department

"WARRANT HOLDERS"

CRESCENDO WORLD FUND, LLC (formerly     Warrant to purchase 29,946 shares of
IAI WORLD FUND, LLC)                    Common Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

CROSSPOINT VENTURE PARTNERS LS 2000     Warrant to purchase 147,546 shares of
2925 Woodside Road                      Common Stock
Woodside, CA 94062
Attn: John Mumford
Fax: (650) 851-7661

EAGLE VENTURES WF, LLC                  Warrant to purchase 1,434 shares of
800 LaSalle Avenue, Suite 2250          Common Stock
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

                                       34

<PAGE>

THE GOLDMAN SACHS GROUP, INC.           Warrant to purchase 103,053 shares of
85 Broad Street                         Common Stock
New York, NY 10004
Attn: Randall A. Blumenthal
Fax: (212) 357-5505

ONSET ENTERPRISE ASSOCIATES II, L.P.    Warrant to purchase 123,898 shares of
2400 Sand Hill Road, Suite 150          Common Stock
Menlo Park, CA  94025
Attn: Terry L. Opdendyk
Fax: (650) 529-0777

ONSET ENTERPRISE ASSOCIATES III, L.P.   Warrant to purchase 123,900 shares of
2400 Sand Hill Road, Suite 150          Common Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

PRISMA GERMAN AMERICAN VENTURE          Warrant to purchase 2,853 shares of
PARTNERS GBR                            Common Stock
800 LaSalle Avenue, Suite 2250
Minneapolis, MN  55402
Attn: James Behnke
Fax: (612) 607-2801

STONE STREET FUND 1999, L.P.            Warrant to purchase 17,176 shares of
85 Broad Street                         Common Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

STONE STREET FUND 1998, L.P.            Warrant to purchase 13,194 shares of
85 Broad Street                         Common Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

BRIDGE STREET FUND 1998, L.P.           Warrant to purchase 3,982 shares of
85 Broad Street                         Common Stock
New York, NY 10004
Attn: Martin Stapleton
Fax: (212) 357-5505

                                       35

<PAGE>

"THE SERIES F HOLDERS"

CROSSPOINT VENTURE PARTNERS LS 2000     5,102,041 shares of Series F Preferred
2925 Woodside Road                      Stock
Woodside, CA  94062
Attn: John Mumford
Fax: (650) 851-7661

ONSET ENTERPRISE ASSOCIATES II, LP      460,757 shares of Series F Preferred
2400 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

ONSET ENTERPRISE ASSOCIATES III, L.P.   460,756 shares of Series F Preferred
2400 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

CRESCENDO WORLD FUND, LLC               586,084 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

EAGLE VENTURES WF, LLC                  28,067 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

PRISMA GERMAN AMERICAN                  10,609 shares of Series F Preferred
VENTURE PARTNERS GBR                    Stock
480 Cowper Street
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

                                       36

<PAGE>

GOLDMAN SACHS GROUP, INC.               387,774 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

STONE STREET FUND 1999, L.P.            64,629 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

STONE STREET FUND 1998, L.P.            49,646 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

BRIDGE STREET FUND 1998, L.P.           14,983 shares of Series F Preferred
480 Cowper Street                       Stock
Suite 300
Palo Alto, CA  94301
Attn: Richard Grogan-Crane
Fax: (650) 470-1201

Chancellor V, L.P.                      1,000,510 shares of Series F Preferred
INVESCO Private Capital, Inc.           Stock 200,102 Warrant Shares
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

                                       37

<PAGE>

Chancellor V-A, L.P.                    468,878 shares of Series F Preferred
INVESCO Private Capital, Inc.           Stock 93,775 Warrant Shares
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

EUROMEDIA VENTURE FUND.                 925,255 shares of Series F Preferred
INVESCO Private Capital, Inc.           Stock 185,051 Warrant Shares
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

CITIVENTURE 2000, L.P.                  156,378 shares of Series F Preferred
INVESCO Private Capital, Inc.           Stock 31,275 Warrant Shares
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

                                       38

<PAGE>

"THE SERIES G HOLDERS"

CROSSPOINT VENTURE PARTNERS 2000 Q,     3,532,118 shares of Series G Preferred
  L.P                                   Stock
2925 Woodside Road
Woodside, CA  94062
Attn: John Mumford
Fax: (650) 851-7661

CROSSPOINT VENTURE PARTNERS 2000, L.P   404,139 shares of Series G Preferred
2925 Woodside Road                      Stock
Woodside, CA  94062
Attn: John Mumford
Fax: (650) 851-7661

ONSET ENTERPRISE ASSOCIATES III, L.P.   1,200,000 shares of Series G Preferred
2400 Sand Hill Road                     Stock
Menlo Park, CA  94025
Attn: Terry Opdendyk
Fax: (650) 529-0777

CRESCENDO WORLD FUND, LLC               1,164,246 shares of Series G Preferred
800 LaSalle Avenue                      Stock
Suite 2250
Minneapolis, MN 55402
Attn: Kevin Spreng

EAGLE VENTURES WF, LLC                  55,754 shares of Series G Preferred
800 LaSalle Avenue                      Stock
Suite 2250
Minneapolis, MN 55402
Attn: Kevin Spreng

                                       39

<PAGE>

Chancellor V, L.P.                      644,676 shares of Series G Preferred
INVESCO Private Capital, Inc.           Stock
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

Chancellor V-A, L.P.                    302,120 shares of Series G Preferred
INVESCO Private Capital, Inc.           Stock
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

EUROMEDIA VENTURE FUND.                 596,185 shares of Series G Preferred
INVESCO Private Capital, Inc.           Stock
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

                                       40

<PAGE>

CITIVENTURE 2000, L.P.                  100,762 shares of Series G Preferred
INVESCO Private Capital, Inc.           Stock
525 University Avenue, Suite 600
Palo Alto, CA  94301

INVESCO Private Capital
c/o Ben Gruder
1166 Avenue of the Americas
New York, NY  10036
Fax: (212) 278-3723

WITH COPIES TO:
Andrew Dworkin at the same address

                                       41
<PAGE>

                             CALLIDUS SOFTWARE INC.

                               AMENDMENT NO. 1 TO

                              AMENDED AND RESTATED

                  REGISTRATION AND INFORMATION RIGHTS AGREEMENT

      This Amendment No. 1 (the "AMENDMENT") to the Callidus Software Inc.
Amended and Restated Registration and Information Rights Agreement dated as of
December 24, 2002 (the "AGREEMENT") is made effective as of March 24, 2003 by
and among Callidus Software Inc., a Delaware corporation (the "COMPANY") and the
purchasers (the "PURCHASERS") of Series G Preferred Stock of the Company as set
forth in Exhibit A attached hereto pursuant to the Series G Preferred Stock
Purchase Agreement dated as of the date hereof (the "PURCHASE AGREEMENT").
Capitalized terms used but not otherwise defined in this Amendment shall have
the meanings set forth in the Agreement.

                                    RECITALS

      A. The Company and certain other parties are parties to the Agreement.

      B. The Company wishes to induce the Purchasers to purchase the Series G
Preferred Stock by amending the Agreement to add the Purchasers as parties.

      C. Section 11 of the Agreement allows for amendment and the addition of
parties with the consent of the Company, provided such parties purchase shares
of Series G Preferred Stock in accordance with the Series G Preferred Stock
Purchase Agreement dated as of December 24, 2002.

      D. The obligations of the Company and the Purchasers under the Purchase
Agreement are conditioned, among other things, upon the execution and delivery
of this Amendment by the Company and the Purchasers.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, all parties hereto agree as follows:

      1. ADDITIONAL PARTIES. The undersigned Purchasers are hereby added as
parties to the Agreement, and the term "Purchasers" as defined in the Agreement
is hereby amended to include the undersigned Purchasers.

      2. GOVERNING LAW. This Amendment shall be governed in all respects by the
internal laws of the State of California without regard to conflict of laws
provisions.

<PAGE>

      3. ENTIRE AGREEMENT. This Amendment together with the Agreement
constitutes the full and entire understanding and agreement among the parties
regarding the matters set forth herein. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding upon
the successors, assigns, heirs, executors and administrators of, the parties
hereto.

      4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                                       2

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.

                                      COMPANY

                                      Callidus Software Inc.,
                                      a Delaware corporation

                                      By: /s/ Reed D. Taussig
                                         --------------------------
                                         Reed D. Taussig, President

           [SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND RESTATED
                 REGISTRATION AND INFORMATION RIGHTS AGREEMENT]

<PAGE>

                                      PURCHASERS

                                      /s/ Michael Tidd
                                      ----------------------------------
                                      Michael Tidd

                                      /s/ David W. Port
                                      ----------------------------------
                                      David W. Port

                                      /s/ Andrew L. Swett
                                      ----------------------------------
                                      Andrew L. Swett

                                      /s/ Geoff Roach
                                      ----------------------------------
                                      Geoff Roach

                                      /s/ Ron J. Fior
                                      ----------------------------------
                                      Ron J. Fior

                                      /s/ Robert Warfield
                                      ----------------------------------
                                      Robert Warfield

                                      /s/ Chris Cabrera
                                      ----------------------------------
                                      Chris Cabrera

                                      /s/ Dan Welch
                                      ----------------------------------
                                      Dan Welch

           [SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND RESTATED
                 REGISTRATION AND INFORMATION RIGHTS AGREEMENT]

<PAGE>

                                    EXHIBIT A

                 (to Amendment No. 1 to the Amended and Restated

                  Registration and Information Rights Agreement

                              dated March 24, 2003)

                             SCHEDULE OF PURCHASERS

PURCHASERS

Michael Tidd               100,000 shares of Series G Preferred Stock

David Port                 25,000 shares of Series G Preferred Stock

Andrew Swett               28,000 shares of Series G Preferred Stock

Geoff Roach                100,000 shares of Series G Preferred Stock

Ron Fior                   25,000 shares of Series G Preferred Stock

Robert Warfield            100,000 shares of Series G Preferred Stock

Chris Cabrera              50,000 shares of Series G Preferred Stock

Dan Welch                  25,000 shares of Series G Preferred Stock

                                       5<PAGE>

                                                                   Exhibit 10.49

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT (the "Agreement") effective as of "Date of hire",
by and between Proxim Corporation, a Delaware corporation (the "Company") and
Dave L. Thompson (the "Executive").

         WHEREAS, the Company considers it essential to its best interests and
the best interests of its stockholders to foster the continued employment of
Executive by the Company and Executive is willing to accept and continue
Executive's employment on the terms hereinafter set forth in this Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:

            1.    Term of Employment; Executive Representation.

                  a. Employment Term. Executive's term of employment under this
Agreement shall commence on the date hereof and, subject to the terms hereof,
Executive and the Company agree and acknowledge that Executive's employment with
the Company constitutes "at-will" employment and that this Agreement may be
terminated at any time by the Company or Executive, subject to the terms of
Section 7 of this Agreement.

                  b. Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of the Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
statute, law, regulation, or of any employment agreement or other agreement or
policy to which Executive is a party or otherwise bound.

            2.    Position.

                  a.    While employed hereunder, Executive shall serve as the
Company's Senior Vice President and Chief Financial Officer. In such position,
Executive shall have such duties and authority, as shall be determined from time
to time by President and Chief Executive Officer ("CEO").

                  b.    While employed hereunder, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict with
the rendering of such services either directly or indirectly, without the prior
written consent of CEO.

            3.    Base Salary. While employed hereunder, the Company shall pay
Executive a base salary (the "Base Salary") at the annual rate of $250,000,
payable in regular installments in accordance with the Company's usual payment
practices. Executive shall be entitled to such increases in Executive's Base
Salary, if any, as may be determined from time to time in the sole discretion of
the board of directors of the Company (the "Board"), as applicable.

                                       1
<PAGE>
            4.    Annual Bonus. With respect to each calendar year while
employed hereunder, Executive shall be eligible to earn an annual bonus award
(an "Annual Bonus") which shall be paid quarterly pursuant to an annual
incentive plan to be established by the Board; provided, however, that
Executive's target Annual Bonus opportunity shall not be less than 60% of
Executive's Base Salary (the "Target Bonus").

            5.    Employee Benefits. The Company shall provide Executive during
the term of his employment hereunder with coverage under all employee pension
and welfare benefit programs, plans and practices in accordance with the terms
thereof, which the Company generally makes available to its senior executives.
Executive shall be entitled to such number of days of paid vacation and sick
leave as established under the Company's policies as in effect from time to
time, which shall be taken at such times as are consistent with Executive's
responsibilities hereunder. In addition, Executive shall be entitled to the
perquisites and other fringe benefits currently made available to senior
executives of the Company, commensurate with Executive's position with the
Company.

            6.    Business Expenses and Housing Expenses. Executive is
authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement, including, without limitation, expenses
for travel and similar items related to such duties and responsibilities. The
Company will reimburse Executive for all such expenses upon presentation by
Executive from time to time of appropriately itemized and approved (consistent
with the Company's policy) accounts of such expenditures.

         In addition, Executive shall be reimbursed for up to $3,333.33 per
month of housing expenses incurred in the Sunnyvale, California area (the
"Housing Payments"). The Company also shall provide Executive with a tax
gross-up payment with respect to his tax liability related to the Housing
Payments. Accordingly, each time that a Housing Payment is made to Executive,
the Executive shall be entitled to an additional tax gross-up payment (the
"Gross-Up Payment") in such an amount so that after the withholding of all
applicable Federal and state employment and income taxes on the sum of any
Housing Payment and its related Gross-Up Payment, the Executive shall retain the
full amount of the Housing Payment.

            7.    Termination. The Executive's employment hereunder may be
terminated by either party at any time and for any reason or no reason; provided
that Executive will be required to give the Company at least 30 days advance
written notice of any resignation of Executive's employment (unless the Company
waives its right to receive such 30-day notice). Notwithstanding any other
provision of this Agreement, the provisions of this Section 7 shall exclusively
govern Executive's rights upon termination of employment with the Company and
its affiliates.

                  a.    By the Company For Cause; By the Executive Without Good
Reason.

                  (i) The Executive's employment hereunder may be terminated by
the Company for Cause (as defined below) at any time or by Executive without
Good Reason after 30 days prior written notice (unless the Company waives such
notice requirement).

                                       2
<PAGE>
                  (ii) For purposes of this Agreement, "Cause" shall mean (i)
Executive's continued failure substantially to perform Executive's duties
hereunder (other than as a result of total or partial incapacity due to physical
or mental illness) for a period of 10 days following notice by the Company to
the Executive of such failure, (ii) dishonesty in the performance of Executive's
duties hereunder, (iii) an act or acts on Executive's part constituting (x) a
felony under the laws of the United States or any state thereof or (y) a
misdemeanor involving moral turpitude, (iv) Executive's willful malfeasance or
willful misconduct in connection with Executive's duties hereunder or any act or
omission which is materially injurious to the financial condition or business
reputation of the Company or any of its subsidiaries or affiliates or (v)
Executive's breach of the provisions of Section 8 of this Agreement.

                  (iii) If Executive's employment is terminated by the Company
for Cause or by Executive without Good Reason, Executive shall be entitled to
receive, reduced by any amounts owed to the Company by Executive, the amounts
described in the following clauses (A) through (D) set forth below:

                  (A) the Base Salary through the date of termination;

                  (B) any earned but unpaid portion of Executive's Annual Bonus
         for the fiscal year in which such termination occurs (which amount
         shall be "earned" as determined by the Company based on the achievement
         of the relevant performance criteria for the entire fiscal year,
         prorated for the number of full calendar quarters during which
         Executive was employed by the Company);

                  (C) reimbursement for any unreimbursed business expenses
         properly incurred by Executive in accordance with Company policy prior
         to the date of Executive's termination; and

                  (D) such employee benefits, if any, as to which Executive may
         be entitled under the employee benefit plans of the Company (the
         amounts described in clauses (A) through (D) hereof being referred to
         as the "Accrued Rights").

                  Following such termination of Executive's employment by the
Company for Cause or by Executive without Good Reason, except as set forth in
this Section 7(a), Executive shall have no further rights to any compensation or
any other benefits under this Agreement.

                  b.       Disability or Death.

                  (i) The Executive's employment hereunder shall terminate upon
Executive's death or if Executive becomes physically or mentally incapacitated
and is therefore unable for a period of six (6) consecutive months or for an
aggregate of nine (9) months in any twenty-four (24) consecutive month period to
perform Executive's duties (such incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of the physical or mental
incapacitation of Executive as to which Executive or his representative and the
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company. If Executive and the
Company cannot agree as to a qualified independent physician, each shall appoint
such a physician and those two physicians shall select a third who shall make
such determination in writing. The determination of

                                       3
<PAGE>
Disability made in writing to the Company and Executive shall be final and
conclusive for all purposes of the Agreement, and all costs incurred by
Executive and/or the Company that are related to such determination shall be
paid by the Company.

                  (ii) Upon termination of Executive's employment hereunder for
either Disability or death, Executive or Executive's estate (as the case may be)
shall be entitled to receive:

                  (A) the Accrued Rights; and

                  (B) a pro rata portion of any Annual Bonus that the Executive
         would have been entitled to receive pursuant to Section 4 hereof in
         such year based upon the percentage of the calendar year that shall
         have elapsed through the date of Executive's termination of employment,
         payable when such Annual Bonus would have otherwise been payable had
         the Executive's employment not terminated.

                  Following Executive's termination of employment due to death
or Disability, except as set forth in this Section 7(b), Executive shall have no
further rights to any compensation or any other benefits under this Agreement.

                  c.       By the Company Without Cause or Resignation by
Executive for Good Reason.

                  (i) The Executive's employment hereunder may be terminated by
the Company without Cause or by Executive's resignation for Good Reason.

                  (ii) For purposes of this Agreement, "Good Reason" shall mean:

                  (x) the reduction by the Company of Executive's Base Salary
(other than as a result of a general salary reduction affecting all Company
employees); or

                  (y) any material and adverse reduction in Executive's duties
and responsibilities made without Executive's written consent; or

                  (z) relocation of Executive's principal workplace more than
fifty (50) miles from Executive's principal workplace as of the date hereof made
without Executive's written consent.

In addition, "Good Reason" shall also be deemed to have occurred in the event
the Company fails to obtain from any successor to the Company an agreement to
assume and perform this Agreement, as contemplated by Section 10(e) hereof.
Notwithstanding the foregoing, none of the events described in clauses (x), (y)
or (z) of this Section 7(c)(ii) shall constitute Good Reason unless Executive
shall have notified the Company in writing describing the events which
constitute Good Reason and then only if the Company shall have failed to cure
such event within thirty (30) days after the Company's receipt of such written
notice.

                  (iii) If Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if Executive
resigns for Good Reason, then

                                       4
<PAGE>
upon the execution of an effective general release of claims in a form
satisfactory to the Company, Executive shall be entitled to receive:

                  (A) the Accrued Rights; and

                  (B) subject to Executive's continued compliance with the
provisions of Section 8, (x) continued payment of the Base Salary after the date
of termination for the shorter of (I) the number of full months Executive was
employed by the Company (calculated with reference to Executive's initial date
of employment and the same date of subsequent months) or (II) twelve (12) months
(the "Severance Period"), and (y) payment of the Target Bonus (prorated by
multiplying the Target Bonus by a fraction, the numerator of which shall be the
number of months in the Severance Period and the denominator of which shall be
12) in respect of the year in which such date of termination occurs, payable at
such time as the Annual Bonus would otherwise be payable, in accordance with the
annual incentive plan of the Company in effect as of the date of termination;
provided, that the aggregate amount described in this clause (B) shall be
reduced by the present value of any other cash severance or termination benefits
payable to Executive under any other plans, programs or arrangements of the
Company or its affiliates; and

                  (C) acceleration of that portion, if any, of any outstanding
option to purchase shares of Common Stock of the Company granted to Executive
pursuant to the Company's stock compensation plans (the "Option") that is
otherwise unexercisable as of the date of termination, which would have
otherwise become exercisable at any time(s) during the Severance Period, with
all Options continuing to be exercisable by Executive during the full term of
the Severance Period (but in any event for no shorter period than provided for
under the terms of the Option); and

                  (D) subject to Executive's continued compliance with the
provisions of Section 8, continued coverage during the Severance Period under
the Company's medical insurance plans in accordance with the terms thereof, as
required under the Consolidated Omnibus Budget Reconciliation Act of 1985, at
the same cost to Executive as was provided to Executive immediately prior to the
date of termination.

                  (E) Executive shall not be required to mitigate the amount of
any payments or benefits provided for pursuant to this Section 7(c)(iii) by
seeking other employment.

         (iv) Notwithstanding anything set forth in this Section 7(c) to the
contrary, in the event that, upon or within thirteen (13) months following the
occurrence of a Change of Control, either (x) Executive's employment is
terminated by the Company without Cause (other than by reason of Executive's
death or Disability) or (y) Executive resigns for Good Reason, the payments and
benefits set forth in Section 7(c)(iii) above shall be modified as follows:

         (A) in lieu of the continued payment of Base Salary and payment of the
Target Bonus pursuant to the annual incentive plan of the Company otherwise
payable pursuant to Section 7(c)(iii)(B), the Base Salary and Target Bonus
amounts set forth therein shall be paid in a lump sum no later than ten (10)
business days following the termination of Executive's employment; provided,
however, that such payments shall still be offset by any other cash severance or
termination benefits payable in accordance with any other such plans, programs
or

                                       5
<PAGE>
arrangements and the term "Severance Period" shall mean twelve (12) months
when applied for other purposes of this Section 7(c)(iv);

         (B) in lieu of the acceleration of exercisability of the Option
provided for in Section 7(c)(iii)(C), one hundred percent (100%) of any portion
of the Option that is otherwise unexercisable as of the date of termination
shall become immediately exercisable, and all Options shall continue to be
exercisable by Executive during the full term of the Severance Period ; and

         (C) Executive's right to the Base Salary and the Target Bonus described
in Section 7(c)(iv)(A) (collectively, the "Advanced Payments") and to any income
to be realized (but not necessarily recognized for tax purposes) on account of
the Option described in Section 7(c)(iv)(B) (the "Option Spread"), or to retain
the Advanced Payments or Option Spread, as the case may be, is expressly
contingent upon Executive's compliance with each and every provision set forth
in Section 8. In the event that Executive engages in conduct that contravenes
the terms of Section 8, the Option described in Section 7(c)(iv)(B) shall
immediately terminate (and shall no longer be exercisable) and Executive shall
not be entitled to any of the benefits described in Section 7(c)(iv). In the
event that Executive engages in conduct that contravenes the terms of Section 8
subsequent to the date that he has been paid the Advanced Payments, or
subsequent to the date that he has realized Option Spread, (I) the Option
described in Section 7(c)(iv)(B) shall immediately terminate (and shall no
longer be exercisable), and (II) Executive shall promptly return a portion of
the Advanced Payments and a portion of the Option Spread, as the case may be.
The amount of Advanced Payments and Option Spread to be returned to the Company
shall be determined by multiplying the Advanced Payments and the Option Spread
by the "Return Fraction" (defined in the following sentence). The Return
Fraction shall be a fraction having a numerator equal to a number of consecutive
calendar months beginning in the month in which Executive first engaged in
conduct in contravention of the terms of Section 8 and including each and every
month thereafter through the end of the one (1) year period following the date
Executive ceases to be employed by the Company and a denominator equal to twelve
(12).

         (D) Executive shall not be required to mitigate the amount of any
payments or benefits provided for pursuant to this Section 7(c)(iv) by seeking
other employment.

         (v) For purposes of Section 7(c)(iv), a "Change of Control" shall mean
the occurrence of any of the following events:

      (A)   any Person (other than Ripplewood Holdings L.L.C., an Affiliate of
            Ripplewood Holdings L.L.C., or any Person holding securities
            representing 10% or more of the combined voting power of the
            Company's outstanding securities on the date hereof, the Company,
            any trustee or other fiduciary holding securities under an employee
            benefit plan of the Company, or any company owned, directly or
            indirectly, by the shareholders of the Company in substantially the
            same proportions as their ownership of stock of the Company),
            becomes the Beneficial Owner, directly or indirectly, of securities
            of the Company, representing 50% or more of the combined voting
            power of the Company's then-outstanding securities;

                                       6
<PAGE>
      (B)   during any period of twenty-four consecutive months (not including
            any period prior to the date hereof), individuals who at the
            beginning of such period constitute the Board, and any new director
            (other than (I) a director nominated by a Person who has entered
            into an agreement with the Company to effect a transaction described
            in Sections 7(c)(v)(A), (C), (D) or (E) hereof or (II) a director
            nominated by any Person (including the Company) who publicly
            announces an intention to take or to consider taking actions
            (including, but not limited to, an actual or threatened proxy
            contest) which if consummated would constitute a Change in Control)
            whose election by the board of directors of the Company or
            nomination for election by the Company's shareholders was approved
            by a vote of at least two-thirds (2/3rd) of the directors then still
            in office who either were directors at the beginning of the period
            or whose election or nomination for election was previously so
            approved, cease for any reason to constitute at least a majority
            thereof;

      (C)   the consummation of any transaction or series of transactions under
            which the Company is merged or consolidated with any other company,
            other than a merger or consolidation which would result in the
            shareholders of the Company immediately prior thereto continuing to
            own (either by remaining outstanding or by being converted into
            voting securities of the surviving entity or its parent) more than
            50% of the combined voting power of the voting securities of the
            Company or such surviving entity (or its parent) outstanding
            immediately after such merger or consolidation; or

      (D)   the complete liquidation of the Company or the sale or disposition
            by the Company of all or substantially all of the Company's assets,
            other than a liquidation of the Company into a wholly-owned
            subsidiary.

      For purposes of this Section 7(c)(v), the terms "Person" and "Beneficial
      Owner" shall each have the same meaning as such terms are defined in
      Section 13(d) and Rule 13d-3, respectively, of the Securities Exchange Act
      of 1934, as amended, or any successor thereto, and the term Affiliate"
      shall mean any entity directly or indirectly controlling, controlled by,
      or under common control with, the Company or any other entity designated
      by the board of directors of the Company in which the Company has an
      interest.

      (vi)  If all or any portion of the payments or benefits provided under
Section 7(c)(iv), either alone or together with other payments and benefits
which Executive receives or is then entitled to receive from the Company, would
constitute a payment described in Section 280G(b)(2) (or its successors) of the
Internal Revenue Code, as amended from time to time (the "Code"), such payments
and benefits provided to Executive thereunder shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code; but only if, by reason of such reduction, the net
after-tax benefit to Executive with respect to such payments and benefits shall
exceed such net after-tax benefit if no such reduction were made. For purposes
of Section 7(c)(iv), "net after-tax benefit" shall mean the sum of (I) the total
amounts payable to Executive hereunder, plus (II) all other payments and
benefits which the Executive receives or is entitled to receive from the Company
as a result of any such termination of employment set forth in Section 7(c)(iv)
that would constitute a payment described in Section 280G(b)(2) of the Code,
less (III) the amount of federal income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in
which the foregoing shall be paid to Executive (based upon the rate in effect
for such year as set forth in the Code at the time of termination of Executive's
employment), less

                                       7
<PAGE>
(IV) the amount of excise taxes imposed with respect to the payments and
benefits described in (I) and (II) above by Section 4999 of the Code. The
foregoing calculations shall be made, at the Company's expense, by a nationally
recognized accounting firm selected by the Company. The determination of such
firm shall be conclusive and binding on all parties.

      (vii)  Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c), Executive shall have no further rights to any compensation or any other
benefits under this Agreement.

                  d.    Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 10(g) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

            8.    Nondisclosure of Confidential Information; Non-Competition.
(a) At any time during or after Executive's employment with the Company,
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information (as hereinafter
defined) pertaining to the business of the Company or any of its subsidiaries,
except (i) while employed by the Company, in the business of and for the benefit
of the Company, or (ii) when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
business of the Company, or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order Executive to divulge,
disclose or make accessible such information. For purposes of this Section 8(a),
"Confidential Information" shall mean information (whether or not in written
form) which relates to Ripplewood Holdings L.L.C., the Company or any of their
respective affiliates, or any of their respective businesses or products
(including, without limitation, their financial data, strategic business plans,
and other proprietary information) or to this Agreement, and which is not known
to the public generally (excluding public knowledge which occurs as a result of
Executive's breach of this covenant or the wrongful acts of others who were
under confidentiality obligations as to the item or items involved), except in
the conduct of the business of the Company, as in existence as of the date of
Executive's termination of employment.

            (b) As Senior Vice President and Chief Financial Officer, Executive
will acquire knowledge of Confidential Information and trade secrets. Executive
acknowledges that the Confidential Information and trade secrets which the
Company has provided and will provide to him could play a significant role were
he to directly or indirectly be engaged in any business in Competition (as
hereinafter defined) with the Company or its subsidiaries. During the period of
his employment hereunder and for one year thereafter, Executive agrees that,
without the prior written consent of the Company, (A) he will not, directly or
indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee or in any other capacity,
carry on, be engaged in or have any financial interest in (other than an
ownership position of less than 5 percent in any company whose shares are
publicly traded), any business,

                                       8
<PAGE>
which is in Competition (as hereinafter defined) with the existing business of
the Company or its subsidiaries and (B) he shall not, on his own behalf or on
behalf of any person, firm or company, directly or indirectly, solicit or offer
employment to any person who has been employed by the Company or its
subsidiaries at any time during the 12 months immediately preceding such
solicitation to the extent that Executive would use or inevitably use
Confidential Information or trade secrets or that would otherwise constitute
unfair competition.

            (c) For purposes of this Section 8, a business shall be deemed to be
in "Competition" with the Company or its subsidiaries if it is engaged in or has
taken concrete steps toward engaging in the business of research and
development, designing, manufacturing, marketing, distributing, or servicing or
selling components as used in microwave radios, products and equipment, whether
in existence or in development, relating to microwave communications (including
unlicensed spread spectrum radio, licensed microwave radio, wireless ethernet
bridge, and fixed wireless (e.g., wireless local loop, point-to-point,
point-to-multipoint)), as carried on by the Company or its affiliates as of the
date of Executive's termination of employment, in all cities, counties, states
and countries in which the business of the Company or its affiliates is then
being conducted or its products are being sold.

            (d) The results and proceeds of Executive's services hereunder,
including, without limitation, any works of authorship resulting from
Executive's services during Executive's employment with the Company and/or any
of the Company's affiliates and any works in progress, will be works-made-for
hire and the Company will be deemed the sole owner throughout the universe of
any and all rights of whatsoever nature therein, whether or not now or hereafter
known, existing, contemplated, recognized or developed, with the right to use
the same in perpetuity in any manner the Company determines in its sole
discretion without any further payment to Executive whatsoever. If, for any
reason, any of such results and proceeds will not legally be a work-for-hire
and/or there are any rights which do not accrue to the Company under the
preceding sentence, then Executive hereby irrevocably assigns and agrees to
assign any and all of Executive's right, title and interest thereto, including,
without limitation, any and all copyrights, patents, trade secrets, trademarks
and/or other rights of whatsoever nature therein, whether or not now or
hereafter known, existing, contemplated, recognized or developed, to the
Company, and the Company will have the right to use the same in perpetuity
throughout the universe in any manner the Company determines without any further
payment to Executive whatsoever. Executive will, from time to time as may be
requested by the Company, (i) during the term of Executive's employment without
further consideration, and (ii) thereafter at Executive's then current hourly
rate, do any and all things which the Company may deem useful or desirable to
establish or document the Company's exclusive ownership of any and all rights in
any such results and proceeds, including, without limitation, the execution of
appropriate copyright and/or patent applications or assignments. To the extent
Executive has any rights in the results and proceeds of Executive's services
that cannot be assigned in the manner described above, Executive unconditionally
and irrevocably waives the enforcement of such rights. This subsection is
subject to and will not be deemed to limit, restrict, or constitute any waiver
by the Company of any rights of ownership to which the Company may be entitled
by operation of law by virtue of the Company being Executive's employer. This
Section does not apply to an invention that qualifies as a nonassignable
invention under Section 2870 of the California Labor Code, which applies to any
invention for which no equipment, supplies, facilities or Confidential
Information of the Company or its subsidiaries was used, which does not (i)
relate to the business

                                       9
<PAGE>
of the Company; (ii) relate to the Company's actual or demonstrable anticipated
research or development or (iii) result from any work performed by Executive for
the Company. This confirms that Executive has been notified of his rights under
Section 2870 of the California Labor Code.

            9.    Specific Performance. Executive and the Company agree that the
covenants in Section 8 are reasonable covenants under the circumstances, and
further agree that if in the opinion of any court of competent jurisdiction such
restraints are not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of this
covenant as to the court shall appear not reasonable and to enforce the
remainder of the covenant as so amended. Executive agrees that any breach of the
covenants contained in Section 8 would irreparably injure the Company.
Accordingly, Executive agrees the Company's remedies at law for a breach or
threatened breach of any of the provisions of Section 8 would be inadequate and,
in recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, the Company may, without posting any bond, in
addition to pursuing any other remedies it may have in law or in equity, cease
making any payments otherwise required by this Agreement and obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available against Executive from any court having jurisdiction over the
matter, restraining any further violation of this Agreement by Executive.

            10.   Miscellaneous.

                  a.    Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to conflicts of laws principles thereof.

                  b.    Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of Executive
by the Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto. This Agreement supersedes all prior agreements and understandings
(including verbal agreements) between Executive and the Company and/or its
affiliates regarding the terms and conditions of Executive's employment with the
Company and/or its affiliates (collectively, the "Prior Agreements").

                  c.    No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.

                  d.    Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect or to any degree, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby.

                                       10
<PAGE>
                  e.    Assignment. This Agreement shall not be assignable by
Executive. This Agreement may be assigned by the Company to a company that is a
successor in interest to substantially all of the business operations of the
Company. Such assignment shall become effective when the Company notifies the
Executive of such assignment or at such later date as may be specified in such
notice. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor company,
provided that any assignee expressly assumes the obligations, rights and
privileges of this Agreement.

                  f.    Successors; Binding Agreement. This Agreement shall
inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees.

                  g.    Notice. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below Agreement, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

      If to the Company:

      Proxim Corporation
      935 Stewart Drive
      Sunnyvale, California  94085
      Attention:  Vice President, Human Resources

       If to Executive:

      To the most recent address of Executive set forth in the personnel records
      of the Company.

                  h.    Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.

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

                            [Signatures on next page]

                                       11
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

Date:  June 28, 2003

                                    PROXIM CORPORATION

                                    By:  /s/ Franco Plastina
                                       ------------------------
                                    Name:  Franco Plastina
                                    Title: President and Chief Executive Officer

                                    EXECUTIVE:
                                    /s/ David L. Thompson
                                    ---------------------------
                                    David L. Thompson

                                       12

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