**EMPLOYMENT AGREEMENT**
     THIS EMPLOYMENT AGREEMENT (the “**Agreement**”) is entered into by and between Todd Gibby (“**you**”) andBlackboard Inc. (“**Blackboard**”).
     WHEREAS, Blackboard desires to employ you on the terms and conditions hereinafter set forthand 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 forOperations. You shall devote your entire business time, attention, skill and energy exclusively tothe business of Blackboard and perform the responsibilities assigned to you in accordance with thestandards and policies that Blackboard may from time to time establish. With prior written noticeto Blackboard, you may engage in appropriate civic, charitable or religious activities and devote areasonable amount of time to private investments or boards or other activities provided that suchactivities do not interfere or conflict with your responsibilities and are not or are not likely tobe contrary to Blackboard’s interests. You and Blackboard agree that your position is essential toBlackboard’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 inemployment with Blackboard, from the date hereof until June 30, 2006 (the “**Initial Term**”), unlessyour employment terminates earlier pursuant to Section 5 below. This Agreement shall automaticallyrenew for successive one (1) year periods (each, a “**Renewal Term**” and together with the InitialTerm, the “**Term**”) unless either party provides prior written notice of its intent not to renew atleast 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 withBlackboard’s regular payroll practices from time to time in effect. Blackboard’s Board ofDirectors (the “**Board**”) may review and adjust your Base Compensation periodically.
     (b)     Bonus Compensation. To be eligible to receive an annual bonus for any year, youmust meet financial performance targets set by the Board and be employed through March31st of the following year. Your initial bonus may be up to 50% of your BaseCompensation. The actual amount of the bonus, if any, will be determined by the Board in its solegood faith discretion. If a bonus is awarded, it will be paid in the year following that for whichthe bonus is being awarded. You will receive your first bonus, if any, in fiscal year 2006 forfiscal year 2005.
     (c)     Business Expenses. During the Term, Blackboard shall pay or reimburse you for allordinary and reasonable business-related expenses you incur in the performance of your duties underthis Agreement. Blackboard will reimburse you for all such expenses upon the presentation by youof an itemized account of such expenditures, together with supporting receipts and otherappropriate documentation.
4.     Employee Benefits.
     (a)     In General. During the Term, you shall be eligible for all employee benefits thatBlackboard may provide to employees who are officers of Blackboard, which may include, but are notlimited 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 programin question and to the determinations of any person or committee administering any such plan orprogram in accordance with the terms of such plan or program. Blackboard reserves the right tomodify or terminate any such benefit plan or program at any time.
     (b)     Vacation. You shall be eligible to take paid vacation during each calendar yearin accordance with Blackboard’s Employment Handbook.
5.     Termination of Employment. Upon the effective date of termination of your employmentwith Blackboard (the “**Termination Date**”), you will not be eligible for further compensation,benefits or perquisites under Sections 3 and 4
 

 

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 underSection 2 expires pursuant to the notice requirements of Section 2; or
     (b)     Termination of Employment by Blackboard. Blackboard has the right to terminateyour 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 yourjob responsibilities, other than a failure resulting from your complete or partial incapacity dueto 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, afelony; or
          (iv)     a material breach of any duty owed to Blackboard, including but not limited to the dutiesof loyalty and confidentiality.
     (c)     Resignation by You. You have the right to resign your employment with Blackboardat any time, with or without Good Reason, provided that you may resign with Good Reason only if youprovide notice of such reason for resignation to Blackboard stating that such reason will begrounds 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 byBlackboard to perform its obligations under this Agreement; (B) your relocation outside of the yourcurrent 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% ofthe total number of shares of the outstanding capital stock of Blackboard or all or substantiallyall of the assets of Blackboard to a single unrelated entity or group of affiliated entities (notrelated to Blackboard) in one or a series of closely related transactions, or (II) a merger orconsolidation in which Blackboard is not the surviving entity or in which the shareholders inBlackboard prior to the merger or consolidation own less than 50% of the shares of outstandingcapital stock of Blackboard.
          (ii)     During the Term, you agree to provide Blackboard three (3) months’ prior written noticeof your resignation, with or without Good Reason. Blackboard may in its sole discretion place youon paid administrative leave as of any date prior to the end of such three (3) month notice periodand request that you no longer be present on Blackboard premises. During any period of paidadministrative leave, you will not be authorized to act as a representative, or make any statementson behalf of, Blackboard; or
     (d)     Death or Disability. Your employment shall be deemed to have been terminated byyou upon your (i) death or (ii) inability to perform your duties under this Agreement, even withreasonable accommodation, for more than twenty-six (26) weeks, whether or not consecutive, in anytwelve-month period (“**Disability**”). Termination will be effective upon the occurrence of suchevent.
6.     Severance Payments.
     (a)     If Blackboard terminates your employment without Cause (as defined in Section 5(b)) ordoes not renew this Agreement pursuant to Section 2**,**then Blackboard will pay you your then currentBase Salary, less applicable tax withholdings (and if you elect COBRA coverage, COBRA premiums) fornine (9) months (in each case, the “**Severance Payments**”). The Severance Payments shall be madeconsistent with Blackboard’s regular payroll schedule. To receive the Severance Payments you mustsign a release of any and all claims in the form provided by Blackboard. Such Severance Paymentsshall 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 endnine (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 beentitled to the Severance Payment as described in Section 6(a), provided that you continue workingfor Blackboard for a period of at least three (3) months following Blackboard’s receipt of writtennotice from you of your resignation pursuant to Section 5(c)(i)(A) or such shorter period as may bemutually agreed upon by you and Blackboard. To receive the Severance Payment, you must sign arelease of any and all claims in the form provided by Blackboard. Such Severance Payment shallbegin 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 propertybelonging to Blackboard. This includes all documents and other information prepared by you or onyour behalf or provided to you in connection with performing your duties for Blackboard, regardlessof 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 orstoring documents or other information. You hereby warrant that you will not retain in any formany such document or other information or copies thereof, except as provided in the followingsentence. You may retain your business cards, a copy of this Agreement and any documentsdescribing any rights or obligations you may have after the Termination Date, including rights andobligations under any employee benefit plan or other agreements, and any other information thatBlackboard 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, eitherduring 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 proprietaryinformation, 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 proforma financial information, sales and marketing strategies, plans and programs and productdevelopment information, employees’ and consultants’ benefits, perquisites, salaries, stockoptions, compensation, formulas or bonuses, and their non-business addresses and telephone numbers,organizational structure and reporting relationships, business plans, names, addresses, phonenumbers of customers, contracts, including contracts with clients, suppliers, independentcontractors or employees, business plans and forecasts, and existing and prospective projects orbusiness opportunities (“**Confidential Information**”) of Blackboard, whether patentable or not, whichyou learn as a result of your employment with Blackboard, whether or not you developed suchinformation. **“Confidential Information”**shall not include, without limitation, your businesscards, information that is or later becomes publicly available in a manner wholly unrelated to anybreach of this Agreement by you as of the date it enters the public domain. If you are uncertainwhether something is Confidential Information you should treat it as Confidential Information untilyou receive clarification from Blackboard that it is not Confidential Information. ConfidentialInformation shall remain at all times the property of Blackboard. You may use or discloseConfidential Information only as authorized and necessary in performing your responsibilities underthis Agreement during your employment with Blackboard; with the General Counsel’s prior writtenconsent; in a legal proceeding between you and Blackboard to establish the rights of either partyunder this Agreement, provided that you stipulate to a protective order to prevent any unnecessaryuse or disclosure; or subject to a compulsory legal process that requires disclosure of suchinformation, provided that you have complied with the following procedures to ensure thatBlackboard 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, youshall provide a copy of the compulsory process and complete information regarding the circumstancesunder which you received it to Blackboard by hand delivery within twenty-four (24) hours. You willnot make any disclosure until the latest possible date for making such disclosure in accordancewith the compulsory process (“**Latest Possible Date**”). If Blackboard seeks to prevent disclosure inaccordance with the applicable legal procedures, and provides you with notice before the LatestPossible Date that it has initiated such procedures, you will not make disclosures of anyConfidential Information that is the subject of such procedures, until such objections arewithdrawn or ruled on. You hereby acknowledge that any breach of this Section 8(a) would causeBlackboard irreparable harm. Notwithstanding anything to the contrary herein, you are notprohibited from disclosing the terms of this Agreement for the purposes of enforcement of thisAgreement, tax compliance and personal finances.
     (b)     Outside Activities. You shall submit to Blackboard’s General Counsel, within areasonable time prior to dissemination, the text of any speech, professional paper, article orsimilar communication created by you which
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relates to Blackboard’s present or future business or research and development endeavors. TheGeneral Counsel then will notify you if the dissemination of the communication is permitted underthe terms of this Agreement.
     (c)     Ownership of Confidential Information; Return of Materials. All ConfidentialInformation, including without limitation that which is produced by or for Blackboard by you oranyone else, all materials embodying Confidential Information, and all copies thereof, will remainthe property of Blackboard or of the third party who has furnished it to Blackboard. On yourTermination Date, or at the written request of Blackboard at any time, you will immediately deliverto Blackboard all materials, and copies thereof, which are in your possession or control and whichcontain or are related in any way to any Confidential Information. This includes all documents andother information prepared by you or on your behalf or provided to you in connection with yourduties while employed by Blackboard, regardless of the form in which such document or informationare 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 herebywarrant that you will not retain in any form any such document or other information or copiesthereof. You may retain a copy of this Agreement and any documents describing any rights orobligations you may have after the Termination Date, including rights under any employee benefitplan or other agreements, and any other information that Blackboard informs you at the time of thetermination 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 ornot patentable, made to any Inventions and/or Confidential Information.
               (C) “**Copyrighted Work**” shall mean any work of authorship eligible for copyright protectionunder 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 ofthe United States and foreign countries.
          (ii)     Exclusions. An Invention, Copyright or Copyrighted Work will not be subject tothis Agreement when all the following criteria are met: (A) no equipment, supplies, facilities, orConfidential Information of Blackboard was used in developing the Invention or Copyrighted Work orin applying for or obtaining a patent or Copyright; (B) the Invention or Copyrighted Work wasdeveloped entirely on your own time; (C) the Invention or Copyrighted Work does not relate directlyto the business of Blackboard or to Blackboard’s actual or demonstrably anticipated research ordevelopment; and (D) the Invention, Copyright or Copyrighted Work does not result from any workperformed 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 conceiveor develop, either alone or with others, shall be the exclusive property of Blackboard. You herebyassign, and agree to assign, to Blackboard your entire right, title, and interest in and to (I) anyand all such Improvements and Inventions, (II) any and all applications for patent, domestic andforeign that may be filed on said Improvements and Inventions, and (III) any and all patents thatmay issue or be granted on such applications, except those excluded under Section 8(d)(ii) of thisAgreement. Both during and after your Termination Date you will on request immediately sign anddeliver to Blackboard without further consideration any and all documents necessary to perfect theassignments granted in this Section.
               (B)     You understand and agree that all Copyrighted Works conceived, developed, created orcontributed to by you shall be considered works made for hire under the copyright laws of theUnited States and shall be the exclusive property of Blackboard. Blackboard shall be consideredthe author of such Copyrighted Works. You further understand and agree that in the event anyCopyrighted Work created by you within the scope of, or in connection with, your work withBlackboard, 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 toBlackboard all of your rights, title, and interest, including copyrights, in, to and under suchCopyrighted Works. Blackboard shall have sole and absolute discretion to register, enforce, and/orassign 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 anddeliver to Blackboard without further consideration, all instruments in writing requiring yoursignature and deemed by Blackboard to be necessary or advisable in, or in connection with, filingor prosecuting of any application for any patent covering Improvements, Inventions or anydivisional, continuing, renewal or reissue application or reexamination request based upon anyapplication for patent. In the event that Blackboard is unable for any reason whatsoever to secureyour signature to any lawful and necessary documents required to apply for or execute any patentapplication with respect to such idea, process, development, design, system, program, discovery,invention, improvement or writing (including renewals, extensions, continuations, divisions orcontinuations in pat thereof), you hereby irrevocably designate and appoint Blackboard and itsofficers and agents, as your agents and attorneys-in-fact to act for and on your behalf and insteadof you, to execute and file any such application and to do all other lawfully permitted acts tofurther the prosecution and issuance of patents thereon with the same legal force and effect as ifexecuted by you.
               (B)     You will aid Blackboard promptly on request, and without further consideration, in anymatter 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 suchrequest is made after your employment has ended, Blackboard will reimburse you for any expensesincurred and compensate for any services rendered in complying with such request at the same rateat which you were compensated during the final month of your employment.
9.     Non-Solicitation/Non-Competition. During your employment and for one (1) year followingyour Termination Date (the “**Restricted Period**”) you will not, except with prior written approval ofBlackboard’s General Counsel, directly or indirectly, individually or as part of or on behalf ofany other person, company, employer or other entity: (a) hire or attempt to solicit for hire, orencourage to end their relationship with Blackboard, any persons who have been employed byBlackboard at any time within the previous six (6) months (a “**Covered Employee**”); (b) solicit forthe purposes of selling or otherwise providing, services or products that are similar or related tothose sold by Blackboard as of the Termination Date to any person or entity that has within thetwelve (12) months preceding the Termination Date purchased any such services or products fromBlackboard 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 contractwith, or support in any manner any business that is substantially similar to the type of businessconducted by Blackboard as of the Termination Date within the geographical area in which, as of theTermination Date, Blackboard is actively marketing or has made a significant investment in time andmoney to prepare to market its products or services within the six (6) month period after theTermination Date. You agree that these provisions are necessary to protect Blackboard’s legitimatebusiness interests. You warrant that the provisions will not unreasonably interfere in yourability to earn a living or to pursue your occupation after the Termination Date. You agree tonotify any person or entity to which you provide services during the Restricted Period of yourobligations under this Section 9.
10.     Non-Disparagement. You agree to refrain from making any derogatory or defamatoryremarks or comments that may disparage Blackboard, or any officer, employee or agent of Blackboardduring or after your Termination Date. Blackboard agrees that none of its officers ordirectors will make any derogatory or defamatory remarks or comments that may disparage you duringor after your employment.
11.     Other Obligations. You warrant that you are not subject to any other obligationsthat would conflict with or inhibit your ability to perform your duties under this Agreement. Yourepresent that you have disclosed to Blackboard the existence and contents of all covenants not tocompete that you have entered into with any other entity. You further warrant that you have notand will not bring to Blackboard or use in the performance of your responsibilities at Blackboardany equipment, supplies, facility or trade secret information (that is not generally available tothe public) of any current or former employer or organization other than Blackboard to which youprovided 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 communicationrequired to be given under the terms of this Agreement must be in writing and must be personallydelivered (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 followingthe 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 GibbyBlackboard Inc  5127 Baltimore Avenue1899 L Street, N.W., 5th Floor  Bethesda, MD 20816Washington 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 andBlackboard will be finally resolved by binding arbitration in accordance with the FederalArbitration Act (“**FAA**”). You and Blackboard agree to follow the Dispute Resolution Procedures setforth in **Attachment A**to this Agreement.
(c)     Nature of Agreement. This Agreement and the attachment hereto constitute the entireagreement between you and Blackboard and supercede all prior agreements and understandings betweenyou and Blackboard relating to the matters covered by this Agreement. Any long-term equityincentives between Blackboard and you shall be contained in a separate agreement. In making thisAgreement, the parties warrant that they did not rely on any representations or statements otherthan those contained in this Agreement. No modification of or amendment to this Agreement will beeffective unless in writing and signed by the Senior Vice President for Human Resources ofBlackboard. A delay or failure by Blackboard to exercise any right that is the subject of thisAgreement will not be construed as a waiver of that right. A waiver of a breach on any oneoccasion will not be construed as a waiver of any other breach. Regardless of the choice of lawprovisions of the District of Columbia or any other jurisdiction, the parties agree that thisAgreement shall be otherwise interpreted, enforced and governed by the laws of the District ofColumbia. This Agreement will continue in effect until all obligations under it are fulfilled. Ifany part of this Agreement is held by a court of competent jurisdiction to be void orunenforceable, the remaining provisions shall continue with full force and effect. This Agreementis not assignable by you. This Agreement is binding on you with respect to Blackboard, itssuccessors or assigns. This Agreement may be executed in any number of counterparts each of whichshall be an original, but all of which together shall constitute one instrument. The headings inthis 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 itknowingly and voluntarily.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case ofBlackboard by its authorized officer, as of the day and year set forth under their signaturesbelow.         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 submittingthe 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 thegrievance, all persons whose testimony would support the grievance, and the relief requestedor proposed. The written statements must be delivered to the other party within the timelimits 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 otherwisedoes not satisfy the demand of the party claiming to be aggrieved within thirty (30) days andthe aggrieved party wishes to pursue the issue, the aggrieved party shall by written noticedemand that the dispute be submitted to non-binding mediation before a mediator jointlyselected by the parties. C.  If mediation does not produce a resolution of the dispute and either party wishes to pursuethe issue, that party shall request arbitration of the dispute by giving written notice to theother party within thirty (30) days after mediation. The parties will attempt to agree on amutually acceptable arbitrator and, if no agreement is reached, the parties will request alist of nine arbitrators from the American Arbitration Association and select by alternatelystriking names. The arbitration will be conducted consistent with JAMS/Endispute’s rulesgoverning employment disputes (“**Rules**”) that are in effect at the time of the arbitration. Ifthere is any conflict between those Rules and the terms of the Employment Agreement(“**Agreement**”), including all attachments thereto, the Agreement will govern. The arbitratorshall have authority to decide whether the conduct complained of under Subsection (a) aboveviolates the legal rights of the parties. In any such arbitration proceeding, any hearingmust be transcribed by a certified court reporter and any decision must be supported bywritten findings of fact and conclusions of law. The arbitrator’s findings of fact must besupported by substantial evidence on the record as a whole and the conclusions of law and anyremedy must be provided for by and consistent with the laws of District of Columbia andfederal law. The arbitrator shall have no authority to add to, modify, change or disregardany 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 theparties, except 1) for workers’ compensation and unemployment claims and 2) when injunctiverelief is necessary to preserve the status quo or to prevent irreparable injury, including,without limitation, any claims concerning an alleged or threatened breach of yourConfidentiality, Non-Solicitation and Non-Competition Agreement. Injunctive relief may besought from any court of competent jurisdiction located in the District of Columbia.