EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between
Todd Gibby (“you”) and Blackboard Inc. (“Blackboard”).

     WHEREAS, Blackboard desires to employ you on the terms and conditions
hereinafter set forth and you desire to accept such employment;

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

1.     Responsibilities. Blackboard agrees to hire you as Executive Vice
President for Operations. You shall devote your entire business time, attention,
skill and energy exclusively to the business of Blackboard and perform the
responsibilities assigned to you in accordance with the standards and policies
that Blackboard may from time to time establish. With prior written notice to
Blackboard, you may engage in appropriate civic, charitable or religious
activities and devote a reasonable amount of time to private investments or
boards or other activities provided that such activities do not interfere or
conflict with your responsibilities and are not or are not likely to be contrary
to Blackboard’s interests. You and Blackboard agree that your position is
essential to Blackboard’s success and that the highest level of performance is
required from you.

2.     Term of Employment. Blackboard agrees to employ you, and you agree to
remain in employment with Blackboard, from the date hereof until June 30, 2006
(the “Initial Term”), unless your employment terminates earlier pursuant to
Section 5 below. This Agreement shall automatically renew for successive one
(1) year periods (each, a “Renewal Term” and together with the Initial Term, the
“Term”) unless either party provides prior written notice of its intent not to
renew at least thirty (30) days before commencement of the applicable Renewal
Term.

3.     Compensation.

     (a)     Base Compensation. Your annual base compensation shall initially be
US$200,000 (“Base Compensation”), less applicable taxes and withholdings,
payable in accordance with Blackboard’s regular payroll practices from time to
time in effect. Blackboard’s Board of Directors (the “Board”) may review and
adjust your Base Compensation periodically.

     (b)     Bonus Compensation. To be eligible to receive an annual bonus for
any year, you must meet financial performance targets set by the Board and be
employed through March 31st of the following year. Your initial bonus may be up
to 50% of your Base Compensation. The actual amount of the bonus, if any, will
be determined by the Board in its sole good faith discretion. If a bonus is
awarded, it will be paid in the year following that for which the bonus is being
awarded. You will receive your first bonus, if any, in fiscal year 2006 for
fiscal year 2005.

     (c)     Business Expenses. During the Term, Blackboard shall pay or
reimburse you for all ordinary and reasonable business-related expenses you
incur in the performance of your duties under this Agreement. Blackboard will
reimburse you for all such expenses upon the presentation by you of an itemized
account of such expenditures, together with supporting receipts and other
appropriate documentation.

4.     Employee Benefits.

     (a)     In General. During the Term, you shall be eligible for all employee
benefits that Blackboard may provide to employees who are officers of
Blackboard, which may include, but are not limited to benefits such as health
insurance plans, a stock option plan, paid holidays and 401(k), subject in each
case to the generally applicable terms and conditions of any such plan or
program in question and to the determinations of any person or committee
administering any such plan or program in accordance with the terms of such plan
or program. Blackboard reserves the right to modify or terminate any such
benefit plan or program at any time.

     (b)     Vacation. You shall be eligible to take paid vacation during each
calendar year in accordance with Blackboard’s Employment Handbook.

5.     Termination of Employment. Upon the effective date of termination of your
employment with Blackboard (the “Termination Date”), you will not be eligible
for further compensation, benefits or perquisites under Sections 3 and 4

 

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of this Agreement, other than those that have already accrued or vested as of
the Termination Date. Termination of your employment may occur under any of the
following circumstances:

     (a)     Expiration of Term. Your employment will terminate if the Term
provided for under Section 2 expires pursuant to the notice requirements of
Section 2; or

     (b)     Termination of Employment by Blackboard. Blackboard has the right
to terminate your employment at any time with or without Cause. For all purposes
under this Agreement, (“Cause”) shall mean:

          (i)     a failure by you to substantially perform your obligations
under this Agreement or your job responsibilities, other than a failure
resulting from your complete or partial incapacity due to physical or mental
illness or impairment;

          (ii)     an act or omission by you that constitutes gross misconduct,
moral turpitude or fraud;

          (iii)     a conviction for, or a plea of “guilty” or “no contest” to,
a felony; or

          (iv)     a material breach of any duty owed to Blackboard, including
but not limited to the duties of loyalty and confidentiality.

     (c)     Resignation by You. You have the right to resign your employment
with Blackboard at any time, with or without Good Reason, provided that you may
resign with Good Reason only if you provide notice of such reason for
resignation to Blackboard stating that such reason will be grounds for
resignation with Good Reason, and if Blackboard fails to cure such reason within
thirty (30) days following receipt of such notice.

          (i)     For purposes of this Agreement, “Good Reason” shall mean (A) a
material failure by Blackboard to perform its obligations under this Agreement;
(B) your relocation outside of the your current residential area without your
consent; or (C) a material diminution of your compensation, duties or
responsibilities within three (3) months of (I) a sale or transfer of more than
50% of the total number of shares of the outstanding capital stock of Blackboard
or all or substantially all of the assets of Blackboard to a single unrelated
entity or group of affiliated entities (not related to Blackboard) in one or a
series of closely related transactions, or (II) a merger or consolidation in
which Blackboard is not the surviving entity or in which the shareholders in
Blackboard prior to the merger or consolidation own less than 50% of the shares
of outstanding capital stock of Blackboard.

          (ii)     During the Term, you agree to provide Blackboard three
(3) months’ prior written notice of your resignation, with or without Good
Reason. Blackboard may in its sole discretion place you on paid administrative
leave as of any date prior to the end of such three (3) month notice period and
request that you no longer be present on Blackboard premises. During any period
of paid administrative leave, you will not be authorized to act as a
representative, or make any statements on behalf of, Blackboard; or

     (d)     Death or Disability. Your employment shall be deemed to have been
terminated by you upon your (i) death or (ii) inability to perform your duties
under this Agreement, even with reasonable accommodation, for more than
twenty-six (26) weeks, whether or not consecutive, in any twelve-month period
(“Disability”). Termination will be effective upon the occurrence of such event.

6.     Severance Payments.

     (a)     If Blackboard terminates your employment without Cause (as defined
in Section 5(b)) or does not renew this Agreement pursuant to Section 2, then
Blackboard will pay you your then current Base Salary, less applicable tax
withholdings (and if you elect COBRA coverage, COBRA premiums) for nine
(9) months (in each case, the “Severance Payments”). The Severance Payments
shall be made consistent with Blackboard’s regular payroll schedule. To receive
the Severance Payments you must sign a release of any and all claims in the form
provided by Blackboard. Such Severance Payments shall begin at the later of
(A) the first pay period following your Termination Date or (B) ten (10) days
after you deliver the signed release to Blackboard. The Severance Payments will
end nine (9) months after they begin.

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     (b)     If during the Term you resign for Good Reason, as defined in
Section 5(c), you shall be entitled to the Severance Payment as described in
Section 6(a), provided that you continue working for Blackboard for a period of
at least three (3) months following Blackboard’s receipt of written notice from
you of your resignation pursuant to Section 5(c)(i)(A) or such shorter period as
may be mutually agreed upon by you and Blackboard. To receive the Severance
Payment, you must sign a release of any and all claims in the form provided by
Blackboard. Such Severance Payment shall begin at the later of (i) the first pay
period following your Termination Date or (ii) ten (10) days after you deliver
the signed release to Blackboard. The Severance Payments will end nine (9)
months after they begin.

7.     Return of Property. Upon termination of your employment with Blackboard
for any reason, you agree to immediately return to Blackboard all equipment,
credit cards and other property belonging to Blackboard. This includes all
documents and other information prepared by you or on your behalf or provided to
you in connection with performing your duties for Blackboard, regardless of the
form in which such documents or information are maintained or stored, including
computer, typed, written, imaged, audio, video, micro-fiche, electronic or any
other means of recording or storing documents or other information. You hereby
warrant that you will not retain in any form any such document or other
information or copies thereof, except as provided in the following sentence. You
may retain your business cards, a copy of this Agreement and any documents
describing any rights or obligations you may have after the Termination Date,
including rights and obligations under any employee benefit plan or other
agreements, and any other information that Blackboard informs you in writing at
the time of the termination that you may retain.

8.     Confidentiality, Non-Solicitation and Non-Competition Agreement.

     (a)     Confidential Information. You shall not disclose or use at any
time, either during or after your Termination Date, any confidential
information, including, but not limited to, the terms of this Agreement,
existing and prospective investments, trade secrets or proprietary information,
strategic sourcing information or analysis, financing information and sources,
patents, patent applications, developmental or experimental work, formulas, test
data, prototypes, models, know how and product specifications, financial
information, financial projections and pro forma financial information, sales
and marketing strategies, plans and programs and product development
information, employees’ and consultants’ benefits, perquisites, salaries, stock
options, compensation, formulas or bonuses, and their non-business addresses and
telephone numbers, organizational structure and reporting relationships,
business plans, names, addresses, phone numbers of customers, contracts,
including contracts with clients, suppliers, independent contractors or
employees, business plans and forecasts, and existing and prospective projects
or business opportunities (“Confidential Information”) of Blackboard, whether
patentable or not, which you learn as a result of your employment with
Blackboard, whether or not you developed such information. “Confidential
Information” shall not include, without limitation, your business cards,
information that is or later becomes publicly available in a manner wholly
unrelated to any breach of this Agreement by you as of the date it enters the
public domain. If you are uncertain whether something is Confidential
Information you should treat it as Confidential Information until you receive
clarification from Blackboard that it is not Confidential Information.
Confidential Information shall remain at all times the property of Blackboard.
You may use or disclose Confidential Information only as authorized and
necessary in performing your responsibilities under this Agreement during your
employment with Blackboard; with the General Counsel’s prior written consent; in
a legal proceeding between you and Blackboard to establish the rights of either
party under this Agreement, provided that you stipulate to a protective order to
prevent any unnecessary use or disclosure; or subject to a compulsory legal
process that requires disclosure of such information, provided that you have
complied with the following procedures to ensure that Blackboard has an adequate
opportunity to protect its legal interests in preventing disclosure. Upon
receipt of a subpoena that could possibly require disclosure of Confidential
Information, you shall provide a copy of the compulsory process and complete
information regarding the circumstances under which you received it to
Blackboard by hand delivery within twenty-four (24) hours. You will not make any
disclosure until the latest possible date for making such disclosure in
accordance with the compulsory process (“Latest Possible Date”). If Blackboard
seeks to prevent disclosure in accordance with the applicable legal procedures,
and provides you with notice before the Latest Possible Date that it has
initiated such procedures, you will not make disclosures of any Confidential
Information that is the subject of such procedures, until such objections are
withdrawn or ruled on. You hereby acknowledge that any breach of this Section
8(a) would cause Blackboard irreparable harm. Notwithstanding anything to the
contrary herein, you are not prohibited from disclosing the terms of this
Agreement for the purposes of enforcement of this Agreement, tax compliance and
personal finances.

     (b)     Outside Activities. You shall submit to Blackboard’s General
Counsel, within a reasonable time prior to dissemination, the text of any
speech, professional paper, article or similar communication created by you
which

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relates to Blackboard’s present or future business or research and development
endeavors. The General Counsel then will notify you if the dissemination of the
communication is permitted under the terms of this Agreement.

     (c)     Ownership of Confidential Information; Return of Materials. All
Confidential Information, including without limitation that which is produced by
or for Blackboard by you or anyone else, all materials embodying Confidential
Information, and all copies thereof, will remain the property of Blackboard or
of the third party who has furnished it to Blackboard. On your Termination Date,
or at the written request of Blackboard at any time, you will immediately
deliver to Blackboard all materials, and copies thereof, which are in your
possession or control and which contain or are related in any way to any
Confidential Information. This includes all documents and other information
prepared by you or on your behalf or provided to you in connection with your
duties while employed by Blackboard, regardless of the form in which such
document or information are maintained or stored, including computer, typed,
written, imaged, audio, video, micro-fiche, electronic or any other means of
recording or storing documents or other information. You hereby warrant that you
will not retain in any form any such document or other information or copies
thereof. You may retain a copy of this Agreement and any documents describing
any rights or obligations you may have after the Termination Date, including
rights under any employee benefit plan or other agreements, and any other
information that Blackboard informs you at the time of the termination that you
may retain.

     (d)     Intellectual Property.

          (i)     For purposes of this Agreement the following terms will be
defined as indicated:

               (A) “Inventions” shall mean inventions, ideas, formula,
developments, designs, systems, software, discoveries, and improvements to
existing technology, whether or not patentable.

               (B) “Improvements” shall mean all inventions, developments,
modifications, changes, whether or not patentable, made to any Inventions and/or
Confidential Information.

               (C) “Copyrighted Work” shall mean any work of authorship eligible
for copyright protection under the federal and state laws of the United States
and foreign countries.

               (D) “Copyrights” shall mean any and all rights granted in
Copyrighted Works under the laws of the United States and foreign countries.

          (ii)     Exclusions. An Invention, Copyright or Copyrighted Work will
not be subject to this Agreement when all the following criteria are met: (A) no
equipment, supplies, facilities, or Confidential Information of Blackboard was
used in developing the Invention or Copyrighted Work or in applying for or
obtaining a patent or Copyright; (B) the Invention or Copyrighted Work was
developed entirely on your own time; (C) the Invention or Copyrighted Work does
not relate directly to the business of Blackboard or to Blackboard’s actual or
demonstrably anticipated research or development; and (D) the Invention,
Copyright or Copyrighted Work does not result from any work performed by you for
Blackboard or at the request of Blackboard.

          (iii)     Ownership and Assignment of Rights.

               (A)     All Inventions, Improvements, or Confidential Information
that you have or will conceive or develop, either alone or with others, shall be
the exclusive property of Blackboard. You hereby assign, and agree to assign, to
Blackboard your entire right, title, and interest in and to (I) any and all such
Improvements and Inventions, (II) any and all applications for patent, domestic
and foreign that may be filed on said Improvements and Inventions, and (III) any
and all patents that may issue or be granted on such applications, except those
excluded under Section 8(d)(ii) of this Agreement. Both during and after your
Termination Date you will on request immediately sign and deliver to Blackboard
without further consideration any and all documents necessary to perfect the
assignments granted in this Section.

               (B)     You understand and agree that all Copyrighted Works
conceived, developed, created or contributed to by you shall be considered works
made for hire under the copyright laws of the United States and shall be the
exclusive property of Blackboard. Blackboard shall be considered the author of
such Copyrighted Works. You further understand and agree that in the event any
Copyrighted Work created by you within the scope of, or in connection with, your
work with Blackboard, or at the request of Blackboard, fails to meet the legal
requirements

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of a work made for hire owned by Blackboard, then this Agreement shall operate
to assign to Blackboard all of your rights, title, and interest, including
copyrights, in, to and under such Copyrighted Works. Blackboard shall have sole
and absolute discretion to register, enforce, and/or assign Copyrights for such
Copyrighted Works.

          (iv)     Assistance and Designation of Agent.

               (A)     Both during and after your Termination Date, you will on
request immediately sign and deliver to Blackboard without further
consideration, all instruments in writing requiring your signature and deemed by
Blackboard to be necessary or advisable in, or in connection with, filing or
prosecuting of any application for any patent covering Improvements, Inventions
or any divisional, continuing, renewal or reissue application or reexamination
request based upon any application for patent. In the event that Blackboard is
unable for any reason whatsoever to secure your signature to any lawful and
necessary documents required to apply for or execute any patent application with
respect to such idea, process, development, design, system, program, discovery,
invention, improvement or writing (including renewals, extensions,
continuations, divisions or continuations in pat thereof), you hereby
irrevocably designate and appoint Blackboard and its officers and agents, as
your agents and attorneys-in-fact to act for and on your behalf and instead of
you, to execute and file any such application and to do all other lawfully
permitted acts to further the prosecution and issuance of patents thereon with
the same legal force and effect as if executed by you.

               (B)     You will aid Blackboard promptly on request, and without
further consideration, in any matter pertaining to or relating to the protection
of any of the Improvements, Inventions, applications for patents covering
Inventions or Improvements, and/or Copyrighted Works. If such request is made
after your employment has ended, Blackboard will reimburse you for any expenses
incurred and compensate for any services rendered in complying with such request
at the same rate at which you were compensated during the final month of your
employment.

9.     Non-Solicitation/Non-Competition. During your employment and for one
(1) year following your Termination Date (the “Restricted Period”) you will not,
except with prior written approval of Blackboard’s General Counsel, directly or
indirectly, individually or as part of or on behalf of any other person,
company, employer or other entity: (a) hire or attempt to solicit for hire, or
encourage to end their relationship with Blackboard, any persons who have been
employed by Blackboard at any time within the previous six (6) months (a
“Covered Employee”); (b) solicit for the purposes of selling or otherwise
providing, services or products that are similar or related to those sold by
Blackboard as of the Termination Date to any person or entity that has within
the twelve (12) months preceding the Termination Date purchased any such
services or products from Blackboard and with whom you had direct contact on
behalf of Blackboard during that time; or (c) own, manage, operate, control, be
employed by, participate in, work in, advise, consult or contract with, or
support in any manner any business that is substantially similar to the type of
business conducted by Blackboard as of the Termination Date within the
geographical area in which, as of the Termination Date, Blackboard is actively
marketing or has made a significant investment in time and money to prepare to
market its products or services within the six (6) month period after the
Termination Date. You agree that these provisions are necessary to protect
Blackboard’s legitimate business interests. You warrant that the provisions will
not unreasonably interfere in your ability to earn a living or to pursue your
occupation after the Termination Date. You agree to notify any person or entity
to which you provide services during the Restricted Period of your obligations
under this Section 9.

10.     Non-Disparagement. You agree to refrain from making any derogatory or
defamatory remarks or comments that may disparage Blackboard, or any officer,
employee or agent of Blackboard during or after your Termination Date.
Blackboard agrees that none of its officers or directors will make any
derogatory or defamatory remarks or comments that may disparage you during or
after your employment.

11.     Other Obligations. You warrant that you are not subject to any other
obligations that would conflict with or inhibit your ability to perform your
duties under this Agreement. You represent that you have disclosed to Blackboard
the existence and contents of all covenants not to compete that you have entered
into with any other entity. You further warrant that you have not and will not
bring to Blackboard or use in the performance of your responsibilities at
Blackboard any equipment, supplies, facility or trade secret information (that
is not generally available to the public) of any current or former employer or
organization other than Blackboard to which you provided services, unless you
have obtained written authorization for their possession and use.

12.     Miscellaneous Provisions.

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     (a)     Notices. Unless otherwise provided herein, any notice or other
communication required to be given under the terms of this Agreement must be in
writing and must be personally delivered (i.e., left with an individual 18 years
of age or older) or sent by overnight delivery. Documents sent by overnight
delivery will be presumed received on the next business day following the day
sent.

       
If notice is to be sent to Blackboard, it will be sent to:
    If notice is to be sent to you, it will be sent to:
 
     
Matthew Small, Esq.
    Todd Gibby
Blackboard Inc
    5127 Baltimore Avenue
1899 L Street, N.W., 5th Floor
    Bethesda, MD 20816
Washington DC 20036
     
 
     
With a copy to:
     
 
     
Douglas B. Mishkin, Esq.
     
Patton Boggs, LLP
     
2550 M Street, NW
     
Washington, DC 20037
     

     (b)     Dispute Resolution. You and Blackboard agree that any dispute
between you and Blackboard will be finally resolved by binding arbitration in
accordance with the Federal Arbitration Act (“FAA”). You and Blackboard agree to
follow the Dispute Resolution Procedures set forth in Attachment A to this
Agreement.

(c)     Nature of Agreement. This Agreement and the attachment hereto constitute
the entire agreement between you and Blackboard and supercede all prior
agreements and understandings between you and Blackboard relating to the matters
covered by this Agreement. Any long-term equity incentives between Blackboard
and you shall be contained in a separate agreement. In making this Agreement,
the parties warrant that they did not rely on any representations or statements
other than those contained in this Agreement. No modification of or amendment to
this Agreement will be effective unless in writing and signed by the Senior Vice
President for Human Resources of Blackboard. A delay or failure by Blackboard to
exercise any right that is the subject of this Agreement will not be construed
as a waiver of that right. A waiver of a breach on any one occasion will not be
construed as a waiver of any other breach. Regardless of the choice of law
provisions of the District of Columbia or any other jurisdiction, the parties
agree that this Agreement shall be otherwise interpreted, enforced and governed
by the laws of the District of Columbia. This Agreement will continue in effect
until all obligations under it are fulfilled. If any part of this Agreement is
held by a court of competent jurisdiction to be void or unenforceable, the
remaining provisions shall continue with full force and effect. This Agreement
is not assignable by you. This Agreement is binding on you with respect to
Blackboard, its successors or assigns. This Agreement may be executed in any
number of counterparts each of which shall be an original, but all of which
together shall constitute one instrument. The headings in this Agreement are for
convenience only and shall not effect the interpretation of this Agreement. You
further certify that you fully understand the terms of this Agreement and have
entered into it knowingly and voluntarily.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of Blackboard by its authorized officer, as of the day and year set forth under
their signatures below.

                  Blackboard Inc.
 
           
/s/ Todd Gibby
  By:   /s/ Michael Chasen    
 
           
Todd Gibby
      Michael Chasen, CEO and President    
 
           
Date: May 11, 2005
  Date: May 11, 2005    

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Attachment A

DISPUTE RESOLUTION PROCEDURES

     The parties agree to make a good faith effort to informally resolve any
dispute before submitting the dispute to arbitration in accordance with the
following procedures:

A.   The party claiming to be aggrieved shall furnish to the other a written
statement of the grievance, all persons whose testimony would support the
grievance, and the relief requested or proposed. The written statements must be
delivered to the other party within the time limits for bringing an
administrative or court action based on that claim.   B.   If the other party
does not agree to furnish the relief requested or proposed, or otherwise does
not satisfy the demand of the party claiming to be aggrieved within thirty
(30) days and the aggrieved party wishes to pursue the issue, the aggrieved
party shall by written notice demand that the dispute be submitted to
non-binding mediation before a mediator jointly selected by the parties.   C.  
If mediation does not produce a resolution of the dispute and either party
wishes to pursue the issue, that party shall request arbitration of the dispute
by giving written notice to the other party within thirty (30) days after
mediation. The parties will attempt to agree on a mutually acceptable arbitrator
and, if no agreement is reached, the parties will request a list of nine
arbitrators from the American Arbitration Association and select by alternately
striking names. The arbitration will be conducted consistent with
JAMS/Endispute’s rules governing employment disputes (“Rules”) that are in
effect at the time of the arbitration. If there is any conflict between those
Rules and the terms of the Employment Agreement (“Agreement”), including all
attachments thereto, the Agreement will govern. The arbitrator shall have
authority to decide whether the conduct complained of under Subsection (a) above
violates the legal rights of the parties. In any such arbitration proceeding,
any hearing must be transcribed by a certified court reporter and any decision
must be supported by written findings of fact and conclusions of law. The
arbitrator’s findings of fact must be supported by substantial evidence on the
record as a whole and the conclusions of law and any remedy must be provided for
by and consistent with the laws of District of Columbia and federal law. The
arbitrator shall have no authority to add to, modify, change or disregard any
lawful term of the Agreement. Blackboard will pay the arbitrator’s fee.   D.  
Arbitration shall be the exclusive means for final resolution of any dispute
between the parties, except 1) for workers’ compensation and unemployment claims
and 2) when injunctive relief is necessary to preserve the status quo or to
prevent irreparable injury, including, without limitation, any claims concerning
an alleged or threatened breach of your Confidentiality, Non-Solicitation and
Non-Competition Agreement. Injunctive relief may be sought from any court of
competent jurisdiction located in the District of Columbia.