MARIMBA INC, S-8, 1999-08-30

MARIMBA INC
S-8, 1999-08-30
PREPACKAGED SOFTWARE

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<PAGE> 1

As filed with the Securities and Exchange Commission on August 30, 1999
Registration No. ____________
================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------

FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------

MARIMBA, INC.
(Exact name of Company as specified in its charter)

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<CAPTION>
DELAWARE 7372 77-0422318
--------------------------------- ---------------------------- -------------------
<S> <C> <C>
(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

440 CLYDE AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 930-5282
(Address of principal executive offices) (Zip Code)

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

MARIMBA, INC. 1996 STOCK PLAN
SHARES ACQUIRED UNDER WRITTEN COMPENSATION AGREEMENTS
WITH CERTAIN DESIGNATED INDIVIDUALS AND CERTAIN UNNAMED INDIVIDUALS
(Full title of the Plans)
-------------------

KIM K. POLESE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MARIMBA, INC.
440 CLYDE AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(Name and address of agent for service)
(650) 930-5282
(Telephone number, including area code, of agent for service)
-------------------

CALCULATION OF REGISTRATION FEE
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=========================================================================================================================

Title of Proposed Maximum Proposed Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
Shares Acquired Under Written 25,775 $29.91 $770,931 $215
Compensation Agreements with Certain
Designated Individuals and Certain Unnamed
Individuals
=========================================================================================================================
</TABLE>

(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Written Compensation
Agreements with Certain Designated Individuals and Certain Unnamed
Individuals by reason of any stock dividend, stock split, recapitalization
or other similar transaction effected without the receipt of consideration
which results in an increase in the number of the outstanding shares of
Common Stock of Marimba, Inc.

(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low prices per share of Common Stock of Marimba, Inc. on August 25,
1999.

<PAGE> 2

EXPLANATORY NOTE

Marimba, Inc. ("Marimba" or the "Company") has prepared this Registration
Statement in accordance with the requirements of Form S-8 under the Securities
Act of 1933, as amended (the "1933 Act"), to register shares of its Common
Stock, $0.0001 par value per share. Under cover of this Form S-8 is a Reoffer
Prospectus that Marimba prepared in accordance with Part I of Form S-3 under the
Securities Act of 1933, as amended. The Reoffer Prospectus may be utilized for
reofferings and resales of up to 25,775 shares of Common Stock acquired by
selling stockholders under the Marimba, Inc. 1996 Stock Plan.

<PAGE> 3

MARIMBA, INC.

FORM S-8 CROSS REFERENCE SHEET SHOWING LOCATION OF INFORMATION
REQUIRED BY PART I OF FORM S-3

Form S-3 Item Number Location/Heading in Prospectus
- -------------------- ------------------------------
<S> <C>
1. Forepart of Registration Statement and Outside Cover page
Front Cover page of Prospectus

2. Inside Front and Outside Back Cover Page of Available Information; Incorporation of Certain
Prospectus Information by Reference

3. Summary Information, Risk Factors and Ratio of Risk Factors
Earnings to Fixed Charges

4. Use of Proceeds Not applicable

5. Determination of Offering Price Not applicable

6. Dilution Not applicable

7. Selling Security Holder Selling Security Holder

8. Plan of Distribution Plan of Distribution

9. Description of Securities to be Registered Not Applicable

10. Interests of Named Experts and Counsel Not Applicable

11. Material Changes Not Applicable

12. Incorporation of Certain Information Documents Incorporated by Reference

13. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act Liabilities
</TABLE>

<PAGE> 4

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference

Marimba, Inc. ("Marimba" or the "Company") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "SEC"):

(a) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 30, 1999 and March 31, 1999; and

(b) The Company's prospectus filed with the SEC pursuant to Rule 424(b) of
the Securities Act of 1933, as amended (the "1933 Act"), in connection
with the Registration Statement No. 333-72353 on Form S-1 filed with
the SEC on February 12, 1999, together with any and all amendments
thereto, in which there is set forth audited financial statements for
the Company's fiscal years ended December 31, 1996, 1997 and 1998; and

(c) The Company's Registration Statement No. 000-25683 on Form 8-A filed
with the SEC on March 31, 1999, together with all amendments thereto,
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "1934 Act") in which there is described the terms, rights
and provisions applicable to the Company's outstanding Common Stock.

All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.

Item 4. Description of Securities

Not Applicable.

Item 5. Interests of Named Experts and Counsel

Not Applicable.

Item 6. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. Article VII,
Section 6, of the Company's Bylaws provides for mandatory indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation Law.
The Company's Certificate of Incorporation provides that, pursuant to Delaware
law, its directors shall not be liable for monetary damages for breach of their
fiduciary duty as directors to the Company and its stockholders. This provision
in the Certificate of Incorporation does not eliminate the fiduciary duty of the
directors, and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain available under
Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company for acts
or omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Company has entered
into Indemnification Agreements with its officers and directors. The
Indemnification Agreements provide the

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<PAGE> 5

Company's officers and directors with further indemnification to the maximum
extent permitted by the Delaware General Corporation Law.

Item 7. Exemption from Registration Claimed

Not Applicable.

Item 8. Exhibits

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<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instrument Defining Rights of Stockholders. Reference is made to Company's
Registration Statement No. 000-25683 on Form 8-A, together with all amendments
thereto, which is incorporated herein by reference pursuant to Item 3(c) of this
Registration Statement.

5 Opinion and consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP.

23.1 Consent of Ernst & Young LLP, Independent Auditors.

23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP is
contained in Exhibit 5.

24 Power of Attorney. Reference is made to page II-3 of this Registration
Statement.

99.1 Form of Written Compensation Agreement.
</TABLE>

Item 9. Undertakings
------------

A. The undersigned Company hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the SEC by the Company pursuant to Section 13 or Section 15(d) of
the 1934 Act that are incorporated by reference in this Registration Statement;
(2) that for the purpose of determining any liability under the 1933 Act each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Written Compensation Agreements with Certain Designated Individuals and Certain
Unnamed Individuals.

B. The undersigned Company hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Company
pursuant to the indemnification provisions summarized in Item 6 or otherwise,
the Company has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.

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<PAGE> 6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mountain View, State of California on this 27th day
of August, 1999.

MARIMBA, INC.

By: /s/ Kim K. Polese
------------------------------------
Kim K. Polese
President and Chief
Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned officers and directors of Marimba, Inc., a Delaware
corporation, do hereby constitute and appoint Kim K. Polese and Fred M. Gerson,
and either of them, the lawful attorneys-in-fact and agents with full power and
authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and either one of them, determine
may be necessary or advisable or required to enable said corporation to comply
with the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms all that said
attorneys and agents, or either one of them, shall do or cause to be done by
virtue hereof. This Power of Attorney may be signed in several counterparts.

IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.

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<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ Kim K. Polese President, Chief Executive Officer and Director August 27, 1999
- ---------------------------------- (Principal Executive Officer)
Kim K. Polese

/s/ Fred M. Gerson Vice President, Finance and Chief Financial August 27, 1999
- ---------------------------------- Officer (Principal Financial and Accounting
Fred M. Gerson Officer)

/s/ Arthur A. van Hoff Chief Technology Officer and Director August 27, 1999
- ----------------------------------
Arthur A. van Hoff
</TABLE>

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<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ Aneel Bhusri Director August 12, 1999
- ----------------------------------
Aneel Bhusri

/s/ Raymond J. Lane Director August 27, 1999
- ----------------------------------
Raymond J. Lane

/s/ Douglas J. Mackenzie Director August 27, 1999
- ----------------------------------
Douglas J. Mackenzie

/s/ Stratton D. Sclavos Director August 27, 1999
- ----------------------------------
Stratton D. Sclavos
</TABLE>

II-4
<PAGE> 8

SHARES OF COMMON STOCK
MARIMBA, INC.

This Reoffer Prospectus relates to 25,775 shares of the common stock, par
value $0.0001 (the "Common Stock"), of Marimba, Inc. ("Marimba" or the
"Company"), which may be offered from time to time by certain key employees and
certain of their family members, both as defined under Form S-8, and named
herein (the "Registered Stockholders"). It is anticipated that the Registered
Stockholders will offer shares for sale at prevailing prices on the Nasdaq
National Market System on the date of sale. The Company will receive no part of
the proceeds of sale made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all selling
and other expenses incurred by the Registered Stockholders will be borne by such
Registered Stockholders.

The Common Stock is traded on the Nasdaq National Market System.

The Registered Stockholders and any broker executing selling orders on
behalf of the Registered Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended (the "1933 Act"), in which
event commissions received by such broker may be deemed to be underwriting
commissions under the 1933 Act.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Registered Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.

The date of this Prospectus is August 30, 1999.

1
<PAGE> 9

AVAILABLE INFORMATION

The Company became subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act") upon the first
date on which its Common Stock was registered under Section 12(g) of the 1934
Act and in accordance therewith will file reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy statements and other information can be inspected and copied at
the Public Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the SEC's regional offices at 219 South Dearborn Street, Chicago,
IL 60604; 26 Federal Plaza, New York, NY 10007; and 5757 Wilshire Boulevard, Los
Angeles, CA 90036, at prescribed rates. The Common Stock is quoted on the Nasdaq
National Market System. Reports, proxy statements, informational statements and
other information concerning the Company can be inspected at the offices of the
National Association of Securities Dealers, Inc. at 1735 K Street, N.W.,
Washington, D.C. 20006.

The Company intends to furnish its stockholders with annual reports
containing additional financial statements and a report thereon by independent
certified public accountants.

A copy of any document incorporated by reference in the Registration
Statement (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that the Registration Statement incorporates) of which this
Reoffer Prospectus forms a part but which is not delivered with this Reoffer
Prospectus will be provided by the Company without charge to any person
(including any beneficial owner) to whom this Reoffer Prospectus has been
delivered upon the oral or written request of such person. Such request should
be directed to Todd Smithline, Marimba, Inc., 440 Clyde Avenue, Mountain View,
California 94043. The Company's telephone number at that location is (650)
930-5282.

TABLE OF CONTENTS

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PAGE
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<S> <C>
THE COMPANY.................................................................... 3

RISK FACTORS................................................................... 4

REGISTERED STOCKHOLDERS........................................................ 12

PLAN OF DISTRIBUTION........................................................... 13

DOCUMENTS INCORPORATED BY REFERENCE............................................ 14

INDEMNIFICATION................................................................ 14
</TABLE>

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<PAGE> 10

THE COMPANY

Marimba, Inc. ("Marimba" or the "Company") is a leading provider of
Internet-based software management solutions that enable companies to expand
their market reach, streamline business processes and strengthen relationships
with customers, business partners and employees. Our Castanet product family
provides an efficient and reliable way for enterprises to distribute, update and
manage applications and related data over corporate intranets, extranets and the
Internet.

Companies are increasingly relying on the Internet to deliver business
critical applications and services to users inside and outside the enterprise.
As the Internet has evolved as a business tool, demands on its infrastructure
have grown and the enterprise computing environment is becoming more complex.
Furthermore, as business applications are increasingly being advertised and
delivered as services, companies and their customers are demanding the same high
levels of availability, ease of use and quality of service that they expect from
common utilities, including electricity and telephone systems. This has created
significant software management challenges. As a result, there is a need for a
new management solution designed specifically for the Internet.

Marimba develops Internet services management solutions that enable
companies to deploy and manage e-business applications and services, which
encompass business-to-business, business-to-employee and business-to-consumer
communications and transactions over corporate intranets, extranets and the
Internet. Castanet centralizes and automates the ongoing distribution and
management of applications and services. We believe that by using Castanet,
organizations can leverage the Internet to reduce software management costs,
deliver greater functionality and improve customer loyalty. We intend to extend
the Castanet foundation to manage the array of infrastructure, systems and
components upon which business applications and services depend. The key
elements of our strategy are to extend our technological leadership position,
target companies and service providers conducting e-business, expand our
worldwide distribution channels and expand our professional service
capabilities.

Our global customer base spans multiple industry segments including
financial services, insurance, retail, manufacturing and telecommunications.
Castanet customers include various industry leaders, including Bear Stearns,
Charles Schwab, EarthLink, The Home Depot, Intuit, Ingram Micro, Seagate
Technology and Sun Microsystems. We market our Castanet product worldwide
through a combination of a direct sales force, resellers and distributors.

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

We were incorporated in Delaware in February 1996. Our principal executive
offices are located at 440 Clyde Avenue, Mountain View, California 94043, and
our telephone number is (650) 930-5282.

3
<PAGE> 11

RISK FACTORS

OUR LIMITED OPERATING HISTORY MAY PREVENT US FROM ACHIEVING SUCCESS
IN OUR BUSINESS

We were founded in February 1996 and have a limited operating history. We
began offering our Castanet product in January 1997 and released Castanet 4.0 in
March 1999. We have a limited operating history that may prevent us from
achieving success in our business. The revenues and income potential of our
business and market are unproven. We will encounter challenges and difficulties
frequently encountered by early-stage companies in new and rapidly evolving
markets. We may not successfully address any of these challenges and the failure
to do so would seriously harm our business and operating results. In addition,
because of our limited operating history, we have limited insight into trends
that may emerge and affect our business.

WE HAVE INCURRED LOSSES AND WE EXPECT FUTURE LOSSES

Our failure to significantly increase our revenues would seriously harm our
business and operating results. We have experienced operating losses in each
quarterly and annual period since inception and we expect to incur significant
losses in the future. As of June 30, 1999, we had an accumulated deficit of
$17.8 million. We expect to significantly increase our research and development,
sales and marketing and general and administrative expenses. As a result, we
will need to significantly increase our quarterly revenues to achieve and
maintain profitability. We may not be able to sustain our recent revenue growth
rates. In fact, we may not have any revenue growth, and our revenues could
decline.

OUR QUARTERLY OPERATING RESULTS ARE VOLATILE AND FUTURE OPERATING RESULTS REMAIN
UNCERTAIN

Our quarterly operating results have varied significantly in the past and
will likely vary significantly in the future. As a result, we believe that
period-to-period comparisons of our operating results are not meaningful and
should not be relied upon as indicators of our future performance. In the
future, our operating results will likely be below the expectations of
securities analysts and investors. Our failure to meet these expectations would
likely seriously harm the market price of our common stock. Operating results
vary depending on a number of factors, many of which are outside our control.

In addition, we anticipate that the size of customer orders may increase as
we focus on larger business accounts. As a result, a delay in recognizing
revenue, even from just one account, could have a significant negative impact on
our operating results. In the past, a significant portion of our sales have been
realized near the end of a quarter. As a result, a delay in an anticipated sale
past the end of a particular quarter could negatively impact our operating
results.

We generally expect that revenues in the first quarter of each year will be
lower than revenues in the fourth quarter of the preceding year due to annual
nature of companies' purchasing and budgeting cycles and the year-to-date
structure of our sales incentive program.

Our expense levels are relatively fixed and are based, in part, on
expectations as to future revenues. As a result, if revenue levels fall below
our expectations, our net loss will increase because only a small portion of our
expenses vary with our revenues.

WE EXPECT SIGNIFICANT INCREASES IN OUR OPERATING EXPENSES

We intend to substantially increase our operating expenses as we:

o Increase our sales and marketing activities, including expanding our
direct sales force;

o Increase our research and development activities;

o Expand our customer support and professional services organizations;
and

o Expand our distribution channels.

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<PAGE> 12

With these additional expenses, we must significantly increase our revenues
in order to become profitable. These expenses will be incurred before we
generate any revenues by this increased spending. If we do not significantly
increase revenues from these efforts, our business and operating results would
be seriously harmed.

OUR SUCCESS DEPENDS ON OUR CASTANET PRODUCT FAMILY AND NEW PRODUCT DEVELOPMENT

We expect to continue to derive substantially all of our revenues from our
Castanet software product family and related services. A decline in the price of
Castanet or our inability to increase sales of Castanet would seriously harm our
business and operating results. We cannot predict Castanet's success. In March
1999 we introduced Castanet 4.0, which was designed to provide customers with
additional functionality. We periodically update Castanet to make improvements
and provide additional enhancements. New versions of Castanet may not provide
the benefits we expect and could fail to meet customers' requirements or achieve
widespread market acceptance.

Our strategy requires Castanet to be highly scalable -- in other words,
able to rapidly increase deployment size from a limited number of end-users to a
very large number of end-users. If we are unable to achieve this level of
scalability, the attractiveness of our products and services would be
diminished.

WE NEED TO DEVELOP AND INTRODUCE NEW TECHNOLOGIES

To provide a comprehensive Internet services management solution, we will
need to develop and introduce new products which offer functionality that we do
not currently provide. We may not be able to develop these technologies and
therefore we may not be able to offer a comprehensive Internet services
management solution. In addition, in the past we have experienced delays in new
product releases, and we may experience similar delays in the future. If we fail
to deploy new product releases on a timely basis, our business and operating
results could be seriously harmed.

WE DEPEND ON THE GROWTH OF OUR CUSTOMER BASE

Our success is substantially dependent on the continued growth of our
customer base. If we fail to increase our customer base, our business and
operating results would be seriously harmed. Our ability to attract new
customers will depend on a variety of factors, including the reliability,
security, scalability and cost-effectiveness of our products and services as
well as our ability to effectively market our products and services. In the
past, we have lost potential customers to competitors for various reasons,
including lower prices.

WE DEPEND ON INCREASED BUSINESS FROM OUR CURRENT CUSTOMERS

If we fail to generate repeat and expanded business from our current
customers, our business and operating results would be seriously harmed. Many of
our customers initially make a limited purchase of our products and services for
pilot programs. These customers may not choose to purchase additional licenses
to expand their use of Castanet. In addition, as we deploy new versions of
Castanet or introduce new products, our current customers may not require the
functionality of our new products and may not ultimately license these products.

Because the total amount of maintenance and support fees we receive in any
period depends in large part on the size and number of licenses that we have
previously sold, any downturn in our software license revenues would negatively
impact our future service revenues. In addition, if customers elect not to renew
their maintenance agreements, our service revenues could be significantly
adversely affected.

WE HAVE A LONG SALES CYCLE THAT DEPENDS UPON FACTORS OUTSIDE OUR CONTROL

A customer's decision to purchase Castanet typically involves a significant
commitment of resources and is influenced by the customer's budget cycles. In
addition, selling Castanet requires us to educate potential customers on its use
and benefits. As a result, our products have a long sales cycle which can take
over six months. We face difficulty predicting the quarter in which sales to
expected customers may occur. The sale of our products is also subject to delays
from the lengthy budgeting, approval and competitive evaluation processes that
typically accompany significant capital expenditures. For example, customers
frequently begin by evaluating our products on a limited basis and devote time
and resources to testing our products before they decide whether or not to
purchase a

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<PAGE> 13

license for deployment. Customers may also defer orders as a result of
anticipated releases of new products or enhancements by us or our competitors.

WE DEPEND ON OUR RELATIONSHIP WITH TIVOLI

Tivoli, has been a primary reseller of our products. In March of 1998, we also
entered into an original equipment manufacturer agreement with Tivoli under
which Tivoli built upon the Castanet infrastructure to develop a product called
Cross-Site, which was released in April 1999. During the second quarter of 1999,
we derived 11% of our total revenues from Tivoli. This represented a combination
of Castanet sales by Tivoli, as well as royalties on sales of Cross-Site. We
expect revenues from Tivoli's resale of Castanet to rapidly decrease and become
insignificant as Tivoli focuses on the sale of Cross-Site. Furthermore, the per
seat royalties under the OEM agreement are less than the per seat prices under
our reseller agreement with Tivoli. There is no assurance that royalties from
the sale of Cross-Site will be sufficient to replace Tivoli's sales of Castanet.
Any failure of Cross-Site to achieve widespread market acceptance could
significantly harm our business and operating results. Additionally, because
Cross-Site is built upon the Castanet infrastructure, we expect Cross-Site to
compete with our Castanet products.

NOVADIGM HAS CLAIMED THAT WE INFRINGE ITS INTELLECTUAL PROPERTY

On March 3, 1997, Novadigm filed a complaint against us in the United
States District Court for the Northern District of California, alleging
infringement by us of a patent held by Novadigm (U.S. Patent No. 5,581,764, the
"Novadigm Patent"). Novadigm alleges that our infringement relates to methods
for updating data and software over a computer network that we use in our
Castanet products. The complaint also alleges that we have willfully infringed
the Novadigm Patent and seeks up to triple damages under the United States
Patent Act. On May 2, 1997, we filed our answer to Novadigm's complaint and
filed a counterclaim against Novadigm.

Litigation is subject to inherent uncertainties. In addition, cases like
this generally involve issues of law that are evolving, presenting further
uncertainty. Our defense of this litigation, regardless of the merits of the
complaint, has been, and will likely continue to be, time-consuming and a
diversion for our personnel. In addition, publicity related to this litigation
has in the past, and will likely in the future, have a negative impact on the
sale of our Castanet products.

A failure to prevail in the litigation could result in:

o Our paying monetary damages, which could be tripled if the
infringement is found to have been willful;

o The issuance of a preliminary or permanent injunction requiring us to
stop selling Castanet in its current form;

o Our having to redesign Castanet, which could be costly and
time-consuming and could substantially delay Castanet shipments,
assuming that a redesign is feasible;

o Our having to reimburse Novadigm for some or all of its attorneys'
fees;

o Our having to obtain from Novadigm a license to its patent, which
license might not be made available to us on reasonable terms,
particularly because Novadigm is a competitor; and/or

o Our having to indemnify our customers against any losses they may
incur due to the alleged infringement.

Any of these results would seriously harm our business and operating
results. Furthermore, we expect to continue to incur substantial costs in
defending against this litigation and these costs could increase significantly
when our dispute goes to trial. It is possible that these costs could
substantially exceed our expectations in future periods.

6
<PAGE> 14

OUR MARKETS ARE HIGHLY COMPETITIVE

Our markets are new, rapidly evolving and highly competitive, and we expect
this competition to persist and intensify in the future. Our failure to maintain
and enhance our competitive position could seriously harm our business and
operating results. We encounter current or potential competition from a number
of sources, including:

o Sellers of enterprise-wide management systems, which include
electronic software distribution;

o Companies that market products that support the distribution of
software applications; and

o Desktop software management suites.

In addition, we compete with various methods of application distribution
and management, including the web browser, and with application server vendors
and others that have introduced software distribution capabilities into their
products.

Potential competitors may bundle their products or incorporate an Internet
services management component into existing products in a manner that
discourages users from purchasing our products. For example, we expect that
future releases of Microsoft's Windows operating systems, which manage the
programs on a computer, will include components addressing Internet services
management functions. Furthermore, new competitors or alliances among
competitors may emerge and rapidly acquire significant market share. Our
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements than we can.

Some of our competitors have longer operating histories and significantly
greater financial, technical, marketing and other resources than we do. Many of
these companies have more extensive customer bases and broader customer
relationships that they could leverage, including relationships with many of our
current and potential customers. These companies also have significantly more
established customer support and professional services organizations than we do.
In addition, these companies may adopt aggressive pricing policies.

PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED

We rely on a combination of patent, trademark, trade secret and copyright
law and contractual restrictions to protect the proprietary aspects of our
technology. These legal protections afford only limited protection. Despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to
copy aspects of our products or to obtain and use our proprietary information.
Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets and to determine the validity and scope of the
proprietary rights of others. For example, on July 30, 1999 we filed a complaint
against Novadigm alleging patent infringement. Such litigation could result in
substantial costs and diversion of resources and could seriously harm our
business and operating results. The lawsuit is at a preliminary stage, and we
cannot assure that the outcome of this litigation will be favorable to us. In
addition, we sell our products internationally, and the laws of many countries
do not protect our proprietary rights as well as the laws of the United States.

WE MAY BE FOUND TO INFRINGE PROPRIETARY RIGHTS OF OTHERS

Other companies, including our competitors, may obtain patents or other
proprietary rights that would prevent, or limit or interfere with our ability to
make, use or sell our products. As a result, we may be found to infringe on the
proprietary rights of others. Furthermore, companies in the software market are
increasingly bringing suits alleging infringement of their proprietary rights,
particularly patent rights. We could incur substantial costs to defend any
litigation, and intellectual property litigation could force us to do one or
more of the following:

o Cease selling, incorporating or using products or services that
incorporate the challenged intellectual property;

o Obtain a license from the holder of the infringed intellectual
property right; and

o Redesign products or services.

7
<PAGE> 15

In the event of a successful claim of infringement against us and our failure or
inability to license the infringed technology, our business and operating
results would be significantly harmed.

We have a limited number of distribution agreements and we may not be able
to increase our number of distribution relationships or maintain our existing
relationships. For example, Netscape, a reseller of our products, accounted for
a significant amount of our revenues in 1997 and 1998, but is no longer a
reseller of our products.

Our current agreements with our channel partners do not prevent these
companies from selling products of other companies, including products that may
compete with our products, and do not generally require these companies to
purchase minimum quantities of our products. These distributors could give
higher priority to the products of other companies or to their own products,
than they give to our products. In addition, sales through these channels
generally have a lower price than direct sales. As a result, while the loss of,
or significant reduction in sales volume to any of our current or future
distribution partners could seriously harm our revenues and operating results, a
significant increase in sales through these channels could also negatively
impact our gross margins.

WE NEED TO DEVELOP AND EXPAND OUR SALES, MARKETING AND DISTRIBUTION CAPABILITIES

We need to expand our marketing and direct sales operations in order to
increase market awareness of our products, market Castanet to a greater number
of enterprises and generate increased revenues. However, competition for
qualified sales personnel is intense and we may not be able to hire enough
qualified individuals in the future. Our products and services require a
sophisticated sales effort targeted at senior management of our prospective
customers. New hires require extensive training and typically take at least six
months to achieve full productivity. In addition, we have limited experience
marketing our products broadly to a large number of potential customers.

WE NEED TO EXPAND OUR PROFESSIONAL SERVICES

We may not be able to attract, train or retain the number of highly
qualified services personnel that our business needs. We believe that growth in
our product sales depends on our ability to provide our customers with
professional services and to educate third-party resellers and consultants on
how to provide similar services. As a result, we plan to increase the number of
our services personnel to meet these needs. However, competition for qualified
services personnel is intense.

We expect our service revenues to increase in dollar amount as we continue
to provide support, consulting and training services that complement our
products and as our installed base of customers grows. This could negatively
impact our gross margin because margins on revenues derived from services are
generally lower than margins on revenues derived from the license of Castanet.

EXPANDING INTERNATIONALLY IS EXPENSIVE, WE MAY RECEIVE NO BENEFIT FROM OUR
EXPANSION AND OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO GOVERNMENTAL
REGULATION

We plan to increase our international sales force and operations. However,
we may not be successful in increasing our international sales. In addition, our
international business activities are subject to a variety of risks, including
the adoption of laws, currency fluctuations, actions by third parties and
political and economic conditions that could restrict or eliminate our ability
to do business in foreign jurisdictions. To date, we have not adopted a hedging
program to protect us from risks associated with foreign currency fluctuations.

Export, and in some cases, import clearances must be obtained before
Castanet can be distributed internationally. Current or new government laws and
regulations, or the application of existing laws and regulations, could expose
us to significant liabilities, significantly slow our growth and seriously harm
our business and operating results.

WE MUST MANAGE OUR GROWTH AND EXPANSION

Our historical growth has placed, and any further growth is likely to
continue to place, a significant strain on our resources. Any failure to manage
growth effectively could seriously harm our business and operating results. To
be successful, we will need to implement additional management information
systems, improve our operating,

8
<PAGE> 16

administrative, financial and accounting systems and controls, train new
employees and maintain close coordination among our executive, engineering,
accounting, finance, marketing, sales and operations organizations. In addition,
our growth has resulted, and any future growth will result, in increased
responsibilities for management personnel.

WE MUST RETAIN AND ATTRACT KEY PERSONNEL

Our success depends largely on the skills, experience and performance of
the members of our senior management and other key personnel, including our
President and Chief Executive Officer, Kim Polese, our Executive Vice President,
Worldwide Sales and Chief Operating Officer, Steven P. Williams and our Chief
Technical Officer, Arthur van Hoff. We may not be successful in attracting,
assimilating or retaining qualified personnel in the future. None of our senior
management or other key personnel is bound by an employment agreement. If we
lose one or more of these key employees, our business and operating results
could be seriously harmed. In addition, our future success will depend largely
on our ability to continue attracting and retaining highly skilled personnel.
Like other companies in the San Francisco Bay Area, we face intense competition
for qualified personnel.

WE RELY ON THIRD-PARTY SOFTWARE AND APPLICATIONS

We integrate third-party security and encryption software and digital
certificates as a component of our software. There are inherent limitations in
the use and capabilities of much of the technology that we license from third
parties. As a result, we face a number of challenges in integrating these
technologies into Castanet. We would be seriously harmed if the providers from
whom we license software ceased to deliver and support reliable products,
enhance their current products or respond to emerging industry standards. In
addition, the third-party software may not continue to be available to us on
commercially reasonable terms or at all. The loss of, or inability to maintain
or obtain this software, could result in shipment delays or reductions.
Furthermore, we might be forced to limit the features available in our current
or future product offerings. Either alternative could seriously harm our
business and operating results.

Almost all of our products are written in Java and require a Java virtual
machine made available by Sun Microsystems, Inc. in order to operate. Sun may
not continue to make these implementations of the Java virtual machines
available at commercially reasonable terms or at all. Furthermore, if Sun were
to make significant changes to the Java language or its Java virtual machine
implementations, or fail to correct defects and limitations in these products,
our ability to continue to improve and ship our products could be impaired. In
the future, our customers may also require the ability to deploy our products on
platforms for which technically acceptable Java implementations either do not
exist or are not available on commercially reasonable terms. Our customers may
also use particular implementations of the Java virtual machine that may not be
technically or commercially acceptable for integration into our products.

SOFTWARE DEFECTS IN CASTANET WOULD HARM OUR BUSINESS

Complex software products like ours often contain errors or defects,
including errors relating to security, particularly when first introduced or
when new versions or enhancements are released. Castanet extensively utilizes
digital certificates and other complex technology. Our use of this technology
has in the past and may in the future result in product behavior problems which
may not be anticipated by us or our customers. For example, most versions of
Castanet shipped before Castanet 4.0 contain digital certificates that cause
Castanet and any applications being delivered with Castanet to stop running when
the certificate used expires. We have developed an update which avoids this
problem and have distributed the update to customers. It is possible that we may
not have identified all affected customers. Customers that do not install the
update will experience this problem with respect to any applications they have
deployed with Castanet and signed with a certificate on the date of expiration
of the certificate they elected to use. Defects or errors in current or future
products could result in lost revenues or a delay in market acceptance, which
would seriously harm our business and operating results.

Since many of our customers use our products for business-critical
applications, errors, defects or other performance problems could result in
financial or other damage to our customers and could significantly impair their
operations. Our customers could seek damages for losses related to any of these
issues. For example, we could be subject to claims for losses by customers that
we are unable to identify and notify and, as a result, do not install our

9
<PAGE> 17

update that avoids the digital certificate problem. A product liability claim
brought against us, even if not successful, would likely be time consuming and
costly to defend and could adversely affect our marketing efforts.

YEAR 2000 ISSUES COULD AFFECT OUR BUSINESS

We are in the process of assessing any Year 2000 issues with the computer
communications, software and security systems that we use to deliver and manage
our products and to manage our internal operations. If our systems do not
operate properly with respect to date calculations involving the Year 2000 and
subsequent dates, we could incur unanticipated expenses to remedy any problems,
which could seriously harm our business. We may also experience reduced sales of
our products as current or potential customers reduce their budgets for Internet
services management products due to increased expenditures on their own Year
2000 compliance efforts.

We have identified one Year 2000 date-related limitation in earlier
versions of Castanet. Versions of Castanet before 3.2 display date-related data
to the user in a manner that uses only two digits to represent a year. A
two-digit display of the Year 2000 could cause a user to believe the year
represented was 1900 instead of 2000. Despite our testing and correcting, our
products, including Castanet 4.0, may contain errors or faults with respect to
the Year 2000.

VOLATILITY OF STOCK PRICE

The market price of our common stock has been and is likely to continue to
be highly volatile and may be significantly affected by factors such as actual
or anticipated fluctuations in our operating results, announcements of
technological innovations, new products or new contracts by Marimba or its
competitors, developments with respect to copyrights or proprietary rights and
related litigation, adoption of new accounting standards affecting the software
industry, general market conditions and other factors. In addition, the stock
market has from time to time experienced significant price and volume
fluctuations that have particularly affected the market price for the common
stock of technology companies. These types of broad market fluctuations may
adversely affect the market price of our common stock. In the past, following
periods of volatility in the market price of a company's securities, securities
class action litigation has often been initiated against such company. Such
litigation against Marimba could result in substantial costs and a diversion of
our attention and resources and seriously harm our business and operating
results.

OUR FUTURE CAPITAL NEEDS ARE UNCERTAIN

We expect that our current cash, cash equivalents and investments will be
sufficient to meet our working capital and capital expenditure needs for at
least twelve months. After that, we may need to raise additional funds, and
additional financing may not be available on favorable terms, if at all. This
could seriously harm our business and operating results. Furthermore, if we
issue additional equity securities, stockholders may experience dilution, and
the new equity securities could have rights senior to those of existing holders
of our common stock. If we cannot raise funds, if needed, on acceptable terms,
we may not be able to develop or enhance our products, take advantage of future
opportunities or respond to competitive pressures or unanticipated requirements.

WE FACE CHALLENGES STEMMING FROM OUR EMERGING MARKETS

The market for Internet services management software has only recently
begun to develop, is rapidly evolving and will likely have an increasing number
of competitors. We cannot be certain that a viable market for our products will
emerge or be sustainable. If the Internet services management market fails to
develop, or develops more slowly than expected, our business and operating
results would be seriously harmed.

Furthermore, in order to be successful in this emerging market, we must be
able to differentiate Marimba from our competitors through our product and
service offerings and brand name recognition. We may not be successful in
differentiating Marimba or achieving widespread market acceptance of our
products and services. Furthermore, enterprises that have already invested
substantial resources in other methods of deploying and managing their
applications and services may be reluctant or slow to adopt a new approach that
may replace, limit or compete with their existing systems.

10
<PAGE> 18

WE DEPEND ON CONTINUED USE OF THE INTERNET AND GROWTH OF ELECTRONIC BUSINESS

Rapid growth in the use of and interest in the Internet has occurred only
recently. As a result, acceptance and use may not continue to develop at
historical rates, and a sufficiently broad base of consumers may not adopt, and
continue to use, the Internet and other online services as a medium of commerce.
Demand and market acceptance for recently introduced services and products over
the Internet are subject to a high level of uncertainty, and there exist few
proven services and products.

In addition, the Internet may not be accepted as a long-term commercial
marketplace for a number of reasons, including potentially inadequate
development of the necessary network infrastructure or delayed development of
enabling technologies and performance improvements. Our success will depend, in
large part, upon third parties maintaining the Internet infrastructure to
provide a reliable network backbone with the necessary speed, data capacity,
security and hardware necessary for reliable Internet access and services.

WE MUST RESPOND TO RAPID TECHNOLOGICAL CHANGE AND EVOLVING INDUSTRY STANDARDS

The markets for our Internet services management solutions are marked by
rapid technological change, frequent new product introductions and enhancements,
uncertain product life cycles, changes in customer demands and evolving industry
standards. New products based on new technologies or new industry standards can
quickly render existing products obsolete and unmarketable. Any delays in our
ability to develop and release enhanced or new products could seriously harm our
business and operating results. Our technology is complex, and new products and
product enhancements can require long development and testing periods. Our
failure to conform to prevailing standards could have a negative effect on our
business and operating results.

11
<PAGE> 19

REGISTERED STOCKHOLDERS

The Reoffer Prospectus relates to shares of Common Stock which have been
acquired by certain key employees of the Company and certain of their family
members, both as defined under Form S-8 (the "Registered Stockholders"). The
Registered Stockholders acquired shares of Common Stock to be offered hereunder
pursuant to the exercise of options granted under the 1996 Stock Plan or
pursuant to gifts of such exercised shares.

The following table sets forth certain information with respect to the
Registered Stockholders as of August 30, 1999:

<TABLE>
<CAPTION>
Number of Number of Number of
Optionee's Position Shares Owned Shares to be Shares Owned
Registered Stockholder with the Company Before Offering Offered Hereby After Offering
- ---------------------- ------------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Carl Haynes Employee 28,125 625 27,500
Richard S. Michaels Employee 1,900 1,900 0
Susan M. Miller Employee 2,500 2,500 0
Stratton Sclavos Director 13,734 13,734 0
Stratton D. Sclavos Cust (1) 1,333 1,333 0
FBO Alexandra C.
Sclavos U/CA/GTMA
Stratton D. Sclavos Cust (1) 1,333 1,333 0
FBO Nicholas C.
Sclavos U/CA/GTMA
Angelina Wolff Employee 6,250 250 6,000
Certain unnamed (3) 4,100 4,100 0
non-affiliates of the
Company(2)
</TABLE>
- ----------
(1) Director's family member, as defined under Form S-8.
(2) Each unnamed non-affiliate may use this reoffer prospectus to sell up to
1,000 shares of common stock.
(3) Includes employees of the Company and certain family members, as defined
under Form S-8, of Director.

12
<PAGE> 20

PLAN OF DISTRIBUTION

The shares of Common Stock covered by this Reoffer Prospectus are being
registered by the Company for the account of the Registered Stockholders. The
Company understands that none of such shares will be offered through
underwriters.

Shares of Common Stock covered by this Reoffer Prospectus may be offered
and sold from time to time by the Registered Stockholders through brokers
through the Nasdaq National Market System or otherwise, at the prices prevailing
at the time of such sales. To the Company's knowledge, no specific brokers or
dealers have been designated by the Registered Stockholders nor has any
agreement been entered into in respect of brokerage commissions or for the
exclusive or coordinated sale of any securities which may be offered pursuant to
this Reoffer Prospectus. The Company will pay all expenses of preparing and
reproducing this Reoffer Prospectus, but will not receive the proceeds from
sales by the Registered Stockholders. Sales will be made at prices prevailing at
the time of such sales.

The Company will not receive any of the proceeds from the offering
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by the Registered Stockholders will be borne by such Registered
Stockholders.

13
<PAGE> 21

DOCUMENTS INCORPORATED BY REFERENCE

(a) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 30, 1999 and March 31, 1999; and

INDEMNIFICATION

14
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instrument Defining Rights of Stockholders. Reference is made to Company's
Registration Statement No. 000-25683 on Form 8-A, together with all amendments
thereto, which is incorporated herein by reference pursuant to Item 3(c) of this
Registration Statement.

5 Opinion and consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP.

23.1 Consent of Ernst & Young LLP, Independent Auditors.

23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP is
contained in Exhibit 5.

24 Power of Attorney. Reference is made to page II-3 of this Registration
Statement.

99.1 Form of Written Compensation Agreement.
</TABLE>

<PAGE> 1
EXHIBIT 5

August 30, 1999

Marimba, Inc.
440 Clyde Avenue
Mountain View, California 94043

Re: Marimba, Inc. (the "Company")
Registration Statement for
an aggregate of 25,775 Shares of Common Stock

Ladies and Gentlemen:

We refer to your registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of 25,775 shares of Common Stock
acquired under Written Compensation Agreements with certain individuals
designated in the Registration Statement and certain unnamed individuals. We
advise you that, in our opinion, when such shares have been issued and sold
under the applicable provisions of the Written Compensation Agreements with
certain individuals designated in the Registration Statement and certain unnamed
individuals and in accordance with the Registration Statement, such shares will
be validly issued, fully paid and nonassessable shares of the Company's Common
Stock.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.

Very truly yours,

/s/ Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
--------------------------------------------
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP

<PAGE> 1

EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Marimba, Inc. 1996 Stock Plan shares acquired under
written compensation agreements with certain designated individuals and certain
unnamed individuals of our report dated January 13, 1999 with respect to the
consolidated financial statements of Marimba, Inc. included in its Registration
Statement on Form S-1, filed with the Securities and Exchange Commission.

/s/ ERNST & YOUNG LLP
-----------------------------

Palo Alto, California
August 26, 1999

<PAGE> 1
EXHIBIT 99.1

MARIMBA, INC. 1996 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

You have been granted the following option to purchase Common Stock of
Marimba, Inc. (the "Company"):

<TABLE>
<S> <C>
Name of Optionee: <<Name>>

Total Number of Shares Granted: <<TotalShares>>

Type of Option: Incentive Stock Option

Exercise Price Per Share: $<<PricePerShare>>

Date of Grant: <<DateGrant>>

Date Exercisable: This option may be exercised, in whole or in part, for 100% of the Shares
subject to this option at any time after the Date of Grant.

Vesting Commencement Date: <<VestComDate>>

Vesting Schedule: The Right of Repurchase shall lapse with respect to the first 25%
of the Shares subject to this option upon the Optionee's completion of 12 months
of Service from the Vesting Commencement Date and an additional 1/48 of the
Shares on the <<VestDate>> day of each month thereafter.

Expiration Date: <<ExpDate>>
</TABLE>

By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the 1996 Stock Plan and the Stock Option Agreement, both
of which are attached to and made a part of this document.

OPTIONEE: MARIMBA, INC.

By:
- ------------------------------------- ------------------------------------

Title:
- ------------------------------------- ---------------------------------
Print Name

II-5
<PAGE> 2

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

MARIMBA, INC. 1996 STOCK PLAN:
STOCK OPTION AGREEMENT

SECTION 1. GRANT OF OPTION.

(a) OPTION. On the terms and conditions set forth in the Notice of Stock
Option Grant and this Agreement, the Company grants to the Optionee on the Date
of Grant the option to purchase at the Exercise Price the number of Shares set
forth in the Notice of Stock Option Grant. The Exercise Price is agreed to be at
least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair
Market Value if Section 3(b) of the Plan applies). This option is intended to be
an ISO or a Nonstatutory Option, as provided in the Notice of Stock Option
Grant.

(b) STOCK PLAN AND DEFINED TERMS. This option is granted pursuant to the
Plan, a copy of which the Optionee acknowledges having received. The provisions
of the Plan are incorporated into this Agreement by this reference. Capitalized
terms are defined in Section 14 of this Agreement.

SECTION 2. RIGHT TO EXERCISE.

(a) EXERCISABILITY. Subject to Subsections (b) and (c) below and the other
conditions set forth in this Agreement, all or part of this option may be
exercised prior to its expiration at the time or times set forth in the Notice
of Stock Option Grant. Shares purchased by exercising this option may be subject
to the Right of Repurchase under Section 7.

(b) $100,000 LIMITATION. If this Option is designated as an ISO in the
Notice of Stock Option Grant, then the Optionee's right to exercise this option
shall be deferred to the extent (and only to the extent) that this option
otherwise would not be treated as an ISO by reason of the $100,000 annual
limitation under Section 422(d) of the Code, except that:

(i) The Optionee's right to exercise this option shall in any event
become exercisable at least as rapidly as 20% per year over the five-year
period commencing on the Date of Grant, unless the Optionee is an officer
of the Company, an Outside Director or a Consultant; and

(ii) The Optionee's right to exercise this option shall no longer be
deferred in the event that (A) a Change in Control occurs, (B) this option
does not remain

<PAGE> 3

outstanding, (C) this option is not assumed by the surviving corporation or
its parent and (D) the surviving corporation or its parent does not
substitute its own option for this option.

(c) STOCKHOLDER APPROVAL. Any other provision of this Agreement
notwithstanding, no portion of this option shall be exercisable at any time
prior to the approval of the Plan by the Company's stockholders.

SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.

Except as otherwise provided in this Agreement, this option and the rights
and privileges conferred hereby shall not be sold, pledged or otherwise
transferred (whether by operation of law or otherwise) and shall not be subject
to sale under execution, attachment, levy or similar process.

SECTION 4. EXERCISE PROCEDURES.

(a) NOTICE OF EXERCISE. The Optionee or the Optionee's representative may
exercise this option by giving written notice to the Company pursuant to Section
13(c). The notice shall specify the election to exercise this option, the number
of Shares for which it is being exercised and the form of payment. The notice
shall be signed by the person exercising this option. In the event that this
option is being exercised by the representative of the Optionee, the notice
shall be accompanied by proof (satisfactory to the Company) of the
representative's right to exercise this option. The Optionee or the Optionee's
representative shall deliver to the Company, at the time of giving the notice,
payment in a form permissible under Section 5 for the full amount of the
Purchase Price.

(b) ISSUANCE OF SHARES. After receiving a proper notice of exercise, the
Company shall cause to be issued a certificate or certificates for the Shares as
to which this option has been exercised, registered in the name of the person
exercising this option (or in the names of such person and his or her spouse as
community property or as joint tenants with right of survivorship). The Company
shall cause such certificate or certificates to be deposited in escrow or
delivered to or upon the order of the person exercising this option.

(c) WITHHOLDING TAXES. In the event that the Company determines that it is
required to withhold any tax as a result of the exercise of this option, the
Optionee, as a condition to the exercise of this option, shall make arrangements
satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the vesting or disposition of Shares purchased by exercising
this option.

SECTION 5. PAYMENT FOR STOCK.

(a) CASH. All or part of the Purchase Price may be paid in cash or cash
equivalents.

(b) SURRENDER OF STOCK. All or part of the Purchase Price may be paid by
the surrender of Shares in good form for transfer. Such Shares must have a fair
market value (as

2
<PAGE> 4

determined by the Board of Directors) on the date of exercise of this option
which, together with any amount paid in another form permissible under this
Section 5, is equal to the Purchase Price. The Optionee shall not surrender
Shares in payment of the Exercise Price if such surrender would cause the
Company to recognize compensation expense with respect to the option for
financial reporting purposes.

(c) EXERCISE/SALE. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.

(d) EXERCISE/PLEDGE. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

SECTION 6. TERM AND EXPIRATION.

(a) BASIC TERM. This option shall in any event expire on the expiration
date set forth in the Notice of Stock Option Grant, which date is 10 years after
the Date of Grant (five years after the Date of Grant if this option is
designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the
Plan applies).

(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's Service
terminates for any reason other than death, then this option shall expire on the
earliest of the following occasions:

(i) The expiration date determined pursuant to Subsection (a) above;

(ii) The date three months after the termination of the Optionee's
Service for any reason other than Disability; or

(iii) The date six months after the termination of the Optionee's
Service by reason of Disability.

The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's Service terminated. When the
Optionee's Service terminates, this option shall expire immediately with respect
to the number of Shares for which this option is not yet exercisable and with
respect to any Restricted Shares. In the event that the Optionee dies after
termination of Service but before the expiration of this option, all or part of
this option may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has acquired this
option directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that this option had become exercisable
before the Optionee's Service terminated.

(c) DEATH OF THE OPTIONEE. If the Optionee dies while in Service, then
this option shall expire on the earlier of the following dates:

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(i) The expiration date determined pursuant to Subsection (a) above;
or

(ii) The date 12 months after the Optionee's death.

All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by beneficiary designation, bequest or inheritance, but only to the
extent that this option had become exercisable before the Optionee's death. When
the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect
to any Restricted Shares.

(d) LEAVES OF ABSENCE. For any purpose under this Agreement, Service shall
be deemed to continue while the Optionee is on a bona fide leave of absence, if
such leave was approved by the Company in writing and if continued crediting of
Service for such purpose is expressly required by the terms of such leave or by
applicable law (as determined by the Company); provided, however, that at the
sole discretion of the Company, the vesting of the Shares subject to this option
may be suspended during a leave of absence, in accordance with the Company's
general policies, which may be amended from time to time.

(e) NOTICE CONCERNING ISO TREATMENT. If this option is designated as an
ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax
treatment as an ISO to the extent it is exercised (i) more than three months
after the date the Optionee ceases to be an Employee for any reason other than
death or permanent and total disability (as defined in Section 22(e)(3) of the
Code), (ii) more than 12 months after the date the Optionee ceases to be an
Employee by reason of such permanent and total disability or (iii) after the
Optionee has been on a leave of absence for more than 90 days, unless the
Optionee's reemployment rights are guaranteed by statute or by contract.

SECTION 7. RIGHT OF REPURCHASE.

(a) SCOPE OF REPURCHASE RIGHT. Unless they have become vested in
accordance with the Notice of Stock Option Grant and Subsection (c) below, the
Shares acquired under this Agreement initially shall be Restricted Shares and
shall be subject to a right (but not an obligation) of repurchase by the
Company. The Optionee shall not transfer, assign, encumber or otherwise dispose
of any Restricted Shares, except as provided in the following sentence. The
Optionee may transfer Restricted Shares (i) by beneficiary designation, will or
intestate succession or (ii) to the Optionee's spouse, children or grandchildren
or to a trust established by the Optionee for the benefit of the Optionee or the
Optionee's spouse, children or grandchildren, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by
all provisions of this Agreement. If the Optionee transfers any Restricted
Shares, then this Section 7 shall apply to the Transferee to the same extent as
to the Optionee.

(b) CONDITION PRECEDENT TO EXERCISE. The Right of Repurchase shall be
exercisable only during the 60-day period next following the later of:

(i) The date when the Optionee's Service terminates for any reason,
with or without cause, including (without limitation) death or disability;
or

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(ii) The date when this option was exercised by the Optionee, the
executors or administrators of the Optionee's estate or any person who has
acquired this option directly from the Optionee by bequest, inheritance or
beneficiary designation.

(c) LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse with
respect to the Shares subject to this option in accordance with the vesting
schedule set forth in the Notice of Stock Option Grant. The Right of Repurchase
shall lapse if the Company is subject to a Change in Control and the Right of
Repurchase is not assigned to the entity that employs the Optionee immediately
after the Change in Control or to its parent or subsidiary.

(d) REPURCHASE COST. If the Company exercises the Right of Repurchase, it
shall pay the Optionee an amount equal to the Exercise Price for each of the
Restricted Shares being repurchased.

(e) EXERCISE OF REPURCHASE RIGHT. The Right of Repurchase shall be
exercisable only by written notice delivered to the Optionee prior to the
expiration of the 60-day period specified in Subsection (b) above. The notice
shall set forth the date on which the repurchase is to be effected. Such date
shall not be more than 30 days after the date of the notice. The certificate(s)
representing the Restricted Shares to be repurchased shall, prior to the close
of business on the date specified for the repurchase, be delivered to the
Company properly endorsed for transfer. The Company shall, concurrently with the
receipt of such certificate(s), pay to the Optionee the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness to the Company incurred by the
Optionee in the purchase of the Restricted Shares. The Right of Repurchase shall
terminate with respect to any Restricted Shares for which it has not been timely
exercised pursuant to this Subsection (e).

(f) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of the
declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) which are by reason of such transaction
distributed with respect to any Restricted Shares or into which such Restricted
Shares thereby become convertible shall immediately be subject to the Right of
Repurchase. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also, after each such
transaction, be made to the price per share to be paid upon the exercise of the
Right of Repurchase in order to reflect any change in the Company's outstanding
securities effected without receipt of consideration therefor; provided,
however, that the aggregate purchase price payable for the Restricted Shares
shall remain the same.

(g) TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes available,
at the time and place and in the amount and form provided in this Agreement, the
consideration for the Restricted Shares to be repurchased in accordance with
this Section 7, then after such time the person from whom such Restricted Shares
are to be repurchased shall no longer have any rights as a holder of such
Restricted Shares (other than the right to receive payment of such

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consideration in accordance with this Agreement). Such Restricted Shares shall
be deemed to have been repurchased in accordance with the applicable provisions
hereof, whether or not the certificate(s) therefor have been delivered as
required by this Agreement.

(h) ESCROW. Upon issuance, the certificates for Restricted Shares shall be
deposited in escrow with the Company to be held in accordance with the
provisions of this Agreement. Any new, substituted or additional securities or
other property described in Subsection (f) above shall immediately be delivered
to the Company to be held in escrow, but only to the extent the Shares are at
the time Restricted Shares. All regular cash dividends on Restricted Shares (or
other securities at the time held in escrow) shall be paid directly to the
Optionee and shall not be held in escrow. Restricted Shares, together with any
other assets or securities held in escrow hereunder, shall be (i) surrendered to
the Company for repurchase and cancellation upon the Company's exercise of its
Right of Repurchase or Right of First Refusal or (ii) released to the Optionee
upon the Optionee's request to the extent the Shares are no longer Restricted
Shares (but not more frequently than once every six months). In any event, all
Shares which have vested (and any other vested assets and securities
attributable thereto) shall be released within 60 days after the earlier of (i)
the Optionee's cessation of Service or (ii) the lapse of the Right of First
Refusal.

SECTION 8. RIGHT OF FIRST REFUSAL.

The Optionee shall be subject to the right of first refusal described in
the Company's bylaws with respect to the Shares acquired under this Agreement.

SECTION 9. LEGALITY OF INITIAL ISSUANCE.

No Shares shall be issued upon the exercise of this option unless and until
the Company has determined that:

(a) It and the Optionee have taken any actions required to register the
Shares under the Securities Act or to perfect an exemption from the registration
requirements thereof;

(b) Any applicable listing requirement of any stock exchange on which
Stock is listed has been satisfied; and

SECTION 10. NO REGISTRATION RIGHTS.

The Company may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The Company
shall not be obligated to take any affirmative action in order to cause the sale
of Shares under this Agreement to comply with any law.

SECTION 11. RESTRICTIONS ON TRANSFER.

(a) SECURITIES LAW RESTRICTIONS. Regardless of whether the offering and
sale of Shares under the Plan have been registered under the Securities Act or
have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose

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restrictions upon the sale, pledge or other transfer of such Shares (including
the placement of appropriate legends on stock certificates or the imposition of
stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance with the
Securities Act, the securities laws of any state or any other law.

(b) MARKET STAND-OFF. In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, including the Company's initial public
offering, the Optionee shall not directly or indirectly sell, make any short
sale of, loan, hypothecate, pledge, offer, grant or sell any option or other
contract for the purchase of, purchase any option or other contract for the sale
of, or otherwise dispose of or transfer, or agree to engage in any of the
foregoing transactions with respect to, any Shares acquired under this Agreement
without the prior written consent of the Company or its underwriters. Such
restriction (the "Market Stand-Off") shall be in effect for such period of time
following the date of the final prospectus for the offering as may be requested
by the Company or such underwriters. In no event, however, shall such period
exceed 180 days. The Market Stand-Off shall in any event terminate two years
after the date of the Company's initial public offering. In the event of the
declaration of a stock dividend, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities which are by reason of such transaction
distributed with respect to any Shares subject to the Market Stand-Off, or into
which such Shares thereby become convertible, shall immediately be subject to
the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may
impose stop-transfer instructions with respect to the Shares acquired under this
Agreement until the end of the applicable stand-off period. The Company's
underwriters shall be beneficiaries of the agreement set forth in this
Subsection (b). This Subsection (b) shall not apply to Shares registered in the
public offering under the Securities Act, and the Optionee shall be subject to
this Subsection (b) only if the directors and officers of the Company are
subject to similar arrangements.

(c) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees that
the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.

(d) INVESTMENT INTENT AT EXERCISE. In the event that the sale of Shares
under the Plan is not registered under the Securities Act but an exemption is
available which requires an investment representation or other representation,
the Optionee shall represent and agree at the time of exercise that the Shares
being acquired upon exercising this option are being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such
other representations as are deemed necessary or appropriate by the Company and
its counsel.

(e) LEGENDS. All certificates evidencing Shares purchased under this
Agreement shall bear the following legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL OPTION IN FAVOR OF THE COMPANY, AS PROVIDED IN THE BYLAWS OF THE
COMPANY, AND A RIGHT OF REPURCHASE OPTION IN FAVOR OF THE COMPANY, AS
PROVIDED IN

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A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE
SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE
HOLDER HEREOF WITHOUT CHARGE."

All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):

"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."

(f) REMOVAL OF LEGENDS. If, in the opinion of the Company and its counsel,
any legend placed on a stock certificate representing Shares sold under this
Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.

(g) ADMINISTRATION. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section 11 shall be
conclusive and binding on the Optionee and all other persons.

SECTION 12. ADJUSTMENT OF SHARES.

In the event of any transaction described in Section 8(a) of the Plan, the
terms of this option (including, without limitation, the number and kind of
Shares subject to this option and the Exercise Price) shall be adjusted as set
forth in Section 8(a) of the Plan. In the event that the Company is a party to a
merger or consolidation, this option shall be subject to the agreement of merger
or consolidation, as provided in Section 8(b) of the Plan.

SECTION 13. MISCELLANEOUS PROVISIONS.

(a) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Shares
subject to this option until the Optionee or the Optionee's representative
becomes entitled to receive such Shares by filing a notice of exercise and
paying the Purchase Price pursuant to Sections 4 and 5.

(b) NO RETENTION RIGHTS. Nothing in this option or in the Plan shall
confer upon the Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Parent or Subsidiary employing or retaining the Optionee)
or of the Optionee, which rights are hereby expressly reserved by each, to
terminate his or her Service at any time and for any reason, with or without
cause.

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(c) NOTICE. Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Optionee at the address that he or she
most recently provided to the Company.

(d) ENTIRE AGREEMENT. The Notice of Stock Option Grant, this Agreement and
the Plan constitute the entire contract between the parties hereto with regard
to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.

(e) CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.

SECTION 14. DEFINITIONS.

(a) "AGREEMENT" shall mean this Stock Option Agreement.

(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company,
as constituted from time to time or, if a Committee has been appointed, such
Committee.

(i) The consummation of a merger or consolidation of the Company with
or into another entity or any other corporate reorganization, if more than
50% of the combined voting power of the continuing or surviving entity's
securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other
reorganization; or

(ii) The sale, transfer or other disposition of all or substantially
all of the Company's assets.

A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of the Company's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Company's securities immediately before such transaction.

(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

(e) "COMMITTEE" shall mean a committee of the Board of Directors, as
described in Section 2 of the Plan.

(f) "COMPANY" shall mean Marimba, Inc., a Delaware corporation.

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(g) "CONSULTANT" shall mean an individual who performs bona fide services
for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Outside Directors.

(h) "DATE OF GRANT" shall mean the date specified in the Notice of Stock
Option Grant, which date shall be the later of (i) the date on which the Board
of Directors resolved to grant this option or (ii) the first day of the
Optionee's Service.

(i) "DISABILITY" shall mean that the Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment.

(j) "EMPLOYEE" shall mean any individual who is a common-law employee of
the Company, a Parent or a Subsidiary.

(k) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of this option, as specified in the Notice of Stock
Option Grant.

(l) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.

(m) "ISO" shall mean an employee incentive stock option described in
Section 422(b) of the Code.

(n) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.

(o) "NOTICE OF STOCK OPTION GRANT" shall mean the document so entitled to
which this Agreement is attached.

(p) "OPTIONEE" shall mean the individual named in the Notice of Stock
Option Grant.

(q) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who
is not an Employee.

(r) "PARENT" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

(s) "PLAN" shall mean the Marimba, Inc. 1996 Stock Plan, as in effect on
the Date of Grant.

(t) "PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of Shares with respect to which this option is being exercised.

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(u) "RESTRICTED SHARE" shall mean a Share that is subject to the Right of
Repurchase.

(v) "RIGHT OF REPURCHASE" shall mean the Company's right of repurchase
described in Section 7.

(w) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

(x) "SERVICE" shall mean service as an Employee, Outside Director or
Consultant.

(y) "SHARE" shall mean one share of Stock, as adjusted in accordance with
Section 8 of the Plan (if applicable).

(z) "STOCK" shall mean the Common Stock of the Company, with a par value
of $.0001 per Share.

(aa) "SUBSIDIARY" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.