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                                                                   EXHIBIT 10.12

                                                                      MARIMBA(R)

                                                                   Marimba, Inc.
                                                                440 Clyde Avenue
                                                               Mountain View, CA
                                                                      94034-2232
                                                                 www.marimba.com

                                                                  P 650 930-5282
                                                                  F 650 930-5600

                                January 29, 2003

Mr. Matt Thompson
3312 Deer Hollow Dr
Danville, CA  94506

Dear Matt:

         This letter is to confirm the agreement between you and Marimba, Inc.
(the "Company") regarding the termination of your employment with the Company.

         1.     Your employment with the Company will terminate on February 3,
                2003. Although you are not otherwise entitled to receive any
                severance pay from the Company, following the Effective Date of
                this agreement (as defined below) the Company will pay you
                severance totaling up to a maximum of $62,500, less all
                applicable withholdings, which equals up to three (3) months of
                your base salary as of your termination date. The severance will
                be paid out twice per month in equal semi-monthly payments of
                $10,416.67, less applicable withholdings ("Semi-Monthly
                Severance Payment"), and each Semi-Monthly Severance Payment
                shall be paid to you at the same time as the Company's normal
                employee payroll is paid, and shall continue through and until
                the earlier of: (a) the date that you have been paid six (6)
                Semi-Monthly Severance Payments; or (b) the date that you
                commence any employment or independent contractor relationship
                with any other party. You agree that within two (2) business
                days from commencing any employment or independent consulting
                relationship with any other party, you must provide the head of
                Human Resources Department of the Company (or his successor) a
                written statement confirming such employment or independent
                consulting relationship. The Company agrees that if you abide by
                your notice obligations in this paragraph, you will be entitled
                to receive a pro-rata share of the

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                unpaid Semi-Monthly Severance Payment in any applicable
                bi-monthly period that you have commenced any employment or
                consulting relationship with any other party.

         2.     In addition, you will be paid earned commissions in the amount
                of $43,105.

         3.     You agree that prior to the execution of this letter you were
                not entitled to receive any further monetary payments from the
                Company, and that the only payments and benefits that you are
                entitled to receive from the Company in the future are those
                specified in this letter. You further acknowledge that no
                bonuses, commissions or similar compensation is or will be owing
                or payable to you by the Company as of the date of termination
                of your employment or thereafter.

         4.     Subject to your completion and timely submission of the
                appropriate paperwork to commence coverage under the
                Consolidated Omnibus Budget Reconciliation Act of 1985, as
                amended ("COBRA"), the Company will pay your COBRA premium to
                continue your current medical, dental, vision and employee
                assistance program benefits under COBRA (including dependent
                coverage, if applicable) until the earlier of: (a) April 30,
                2003; or (b) the date that you commence any employment or
                independent contractor relationship with any other party.
                Following such date, you will have the option of continuing
                COBRA coverage at your own expense for as long as permitted by
                law.

         5.     In consideration for receiving the severance payments and
                benefits described above, you waive and release and promise
                never to assert any claims or causes of action, whether or not
                now known, against the Company or its predecessors, successors,
                or past or present subsidiaries, officers, directors, agents,
                employees and assigns, with respect to any matter, including but
                not limited to, any matter arising out of or connected with your
                employment with the Company or the termination of that
                employment, including without limitation, claims of wrongful
                discharge, emotional distress, defamation, fraud, breach of
                contract, breach of the covenant of good faith and fair dealing,
                any claims of discrimination or harassment based on sex, age,
                race, national origin, disability or on any other basis, under
                Title VII of the Civil Rights Act of 1964, as amended, the
                California Fair Employment and Housing Act, the Age
                Discrimination in Employment Act of 1967, as amended, and all
                other laws and regulations relating to employment.

         6.     You expressly waive and release any and all rights and benefits
                under Section 1542 of the Civil Code of the State of California
                (or any analogous law of any other state), which reads as
                follows:

                           "A general release does not extend to claims which
                           the creditor does not know or suspect to exist in his
                           favor at the time of executing the release, which, if
                           known by him, must have materially affected his
                           settlement with the debtor."

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         7.     Nothing contained in this letter shall constitute or be treated
                as an admission by you or the Company of liability, of any
                wrongdoing, or of any violation of law.

         8.     At all times in the future, you will remain bound by the
                Company's Proprietary Information and Invention Agreement signed
                by you on December 20, 2000, a copy of which is attached hereto.
                Neither the Proprietary Information and Inventions Agreement or
                the Indemnification Agreement dated as of February 5, 2001
                between you and the Company shall be affected by this agreement,
                and each such agreement shall continue to be legally effective
                in accordance with its respective terms.

         9.     Any stock options or restricted stock awards held by you shall
                be governed and legally effective in accordance with their
                applicable terms and conditions, and shall not be affected by
                this agreement.

         10.    You agree that you will not disclose to others the fact or terms
                of this letter, except that you may disclose such information to
                your attorney or accountant in order for such individuals to
                render services to you.

         11.    You agree that except as expressly provided in this letter, this
                letter renders null and void any and all prior agreements
                between you and the Company. You and the Company agree that this
                letter agreement constitutes the entire agreement between you
                and the Company regarding the subject matter of this agreement,
                and that this letter agreement may be modified only in a written
                document signed by you and a duly authorized officer of the
                Company.

         12.    This agreement shall be construed and interpreted in accordance
                with the laws of the State of California.

         13.    This agreement may be executed in counterparts, each of which
                shall be an original, but all of which together shall constitute
                one agreement.

         14.    Any controversy involving the construction or application of any
                terms, covenants or conditions of this letter, or any claims
                arising out of any alleged breach of this letter, will be
                governed by the rules of the American Arbitration Association
                and submitted to and settled by final and binding arbitration in
                Santa Clara County, California, except that any alleged breach
                of the Company's Proprietary Information and Inventions
                Agreement shall not be submitted to arbitration and instead the
                Company may seek all legal and equitable remedies, including
                without limitation, injunctive relief.

         15.    You have up to forty-five (45) days after receipt of this letter
                within which to review it, and to discuss it with an attorney of
                your own choosing regarding whether or not you wish to execute
                it. Furthermore, you have seven (7) days after you have signed
                this letter during which time you may revoke this agreement. If
                you wish to revoke this agreement, you may do so by delivering a
                letter of revocation to me. Because of this revocation period,
                you understand that the

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                agreement set forth in this letter shall not become effective or
                enforceable until the eighth day after the date you sign this
                letter (the "Effective Date").

         16.    You acknowledge that you have been provided with a notice, as
                required by the Older Workers Benefit Protection Act of 1990,
                that contains information about the individuals who are being
                terminated in the restructuring of the Company, the eligibility
                factors for receiving severance benefits, the time limits
                applicable to receive severance pay, the job titles and ages of
                the employees terminated in restructuring of the Company, and
                the ages of the employees with the same job titles who have not
                been terminated in this restructuring of the Company. (See
                Attachment 1 hereto).

         17.    You acknowledge that before signing this agreement, you:

                  . Have read and understand it;

                  . Know that you are giving up important rights;

                  . Are aware of your right to consult an attorney before
                    signing the agreement; and

                  . Have signed the agreement knowingly and voluntarily.



         Please indicate your agreement with the above terms by signing the
signature block provided below.

                                Sincerely yours,

                                /s/ Todd Riesterer
                                Todd Riesterer
                                VP, Corporate Services

         My agreement with the above terms is signified by my signature below.
Furthermore, I acknowledge that I have read and understand this letter and that
I sign this release of all claims voluntarily, with full appreciation that at no
time in the future may I pursue any of the rights I have waived in this release.

Signed:           /s/ Matt Thompson                           Dated: 2/4 , 2002
         --------------------------------------------
                  Matt Thompson

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                                                                    Attachment 1

                                     Notice

         As required by the Older Workers Benefit Protection Act of 1990, this
notice contains information about the individuals terminated in the Marimba,
Inc. (the "Company") restructuring, the eligibility factors for receiving
severance pay, the time limits applicable to receiving severance pay, the job
titles and ages of the employees terminated in the restructuring of the Company,
and the ages of the employees in the same job classification who have not been
terminated in the reduction in force.

         1.     Severance benefits are being provided to regular employees of
                the Company whose employment is terminated as a result of
                restructuring of the Company on February 3, 2003.

         2.     Employees are not eligible to receive any severance benefit
                unless they sign a General Release of All Claims (the
                "Release"). Employees who have attained age 40 must return the
                Release to the Company within 45 days after receiving the
                Release, and once the signed Release is returned to the Company,
                the employees have 7 days to revoke the Release.

         3.     The following is a listing of the ages and job titles of Company
                employees terminated in the reduction in force, and the ages of
                Company employees in the same job classification who have not
                been terminated in the reduction in force:

<TABLE>
<CAPTION>
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     Job Title                                    Age            Number Selected           Number Not Selected
     ---------                                    ---            ---------------           -------------------
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<S>                                           <C>                <C>                       <C>
VP, Worldwide Sales                           44                             1                        0
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VP, Channel Sales                             38                             1                        0
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</TABLE>

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