EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

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

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

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

1.  Responsibilities . Blackboard agrees to continue to employ you as President and Chief Executive Officer. 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. You may engage in appropriate civic or charitable 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, until June 30, 2013 (the “Term ”), unless your employment terminates earlier pursuant to Section 5 below. Upon expiration of the Agreement, the Agreement will extend automatically until it is terminated pursuant to Section 5.

3.  Compensation .

(a)  Base Compensation . Your annual base compensation shall be US$550,000 (“ Base Compensation ”), less applicable taxes and withholdings, payable in accordance with Blackboard’s regular payroll practices from time to time in effect. The Compensation Committee of the Board of Directors (the “ Committee ”) may review and adjust your Base Compensation periodically.

(b)  Bonus Compensation . To be eligible to receive an annual bonus for any fiscal year, you must meet financial performance targets set by the Board and be employed through the payment date of the bonus. Your target bonus shall be 100% of your Base Compensation. The actual amount of the bonus, if any, will be determined by the Compensation Committee in its sole discretion (the “ Bonus ”). If a Bonus is awarded, it will be paid no later than March 15 of the year following that for which the Bonus is being awarded. You will receive your Bonus for fiscal year 2009, if any, by March 15, 2010. The Committee may review and adjust your Bonus Compensation periodically

(c)  Restricted Stock Unit Award. You will be granted an award of 120,000 restricted stock units (“ RSUs ”). The RSUs will vest on June 30, 2013 or, if it would occur prior to then, upon a Change in Control Event (as defined in the Blackboard Amended and Restated 2004 Stock Incentive Plan (the “ 2004 Plan ”)); provided, however, that the shares of common stock underlying the RSUs shall not be delivered to you until the earlier of (i) the date of your “separation from service” (as defined below) and (ii) a “Section 409A Change in Control Event” (as defined below); and, provided, further, however, that in the event that you are terminated for Cause, the RSUs (whether vested or unvested) will be immediately and automatically forfeited. If you are terminated without Cause, resign for Good Reason, die, or incur a Disability, in each case prior to June 30, 2013, such portion of the award shall vest as determined by the sum of the digits method using the number of whole calendar months elapsed after June 2009 (e.g., if terminated after 12 months, then 78/1176 of the award shall vest). At your written election received by the Company no later than 30 days following the date that the Board of Directors approves the grant of the RSUs to you, you may choose to receive up to one half (1/2) of your vested shares on December 31, 2015. For purposes of this Agreement, a “ Section 409A Change in Control Event ” shall be an event or occurrence that constitutes both (i) a Change in Control Event as defined in the 2004 Plan and (ii) a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5)(i). The RSUs shall be subject to the terms and conditions of Section 6(b) hereof. In the event of any conflict between this Section 3(c) and the written agreement granting the RSUs, such latter agreement shall govern.

(d)  Long-Term Cash Incentive. Your long-term cash incentive awards relating to fiscal year 2010 and later are canceled but the long-term cash incentive awards relating to fiscal year 2009 will be paid in 2010 according to its terms. No further payments will be made under such awards after this year including awards made in prior years.

(e)  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. Blackboard reserves the right to modify or terminate any such benefit at any time.

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

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 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)  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) nonfeasance or your material breach of this Agreement, provided that Blackboard first provides you with written notice of such failure and you fail to cure it within thirty (30) days of such notice;

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

(iv) a material breach of any legally recognized duty owed to Blackboard (e.g., your duty of loyalty and confidentiality).

(b)  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 (i) you provide notice of such reason for resignation to Blackboard within 90 days of the initial existence of the condition giving rise to the Good Reason and stating that such reason will be grounds for resignation with Good Reason, and (ii) if Blackboard fails to cure such reason within thirty (30) days following receipt of such notice. Furthermore, any such resignation shall occur within one (1) year of the occurrence of a Good Reason event.

(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 material relocation outside of your current residential area without your consent; or (C) a material diminution of your compensation, duties, or responsibilities at any time or for any reason other than for Cause during the Term of this Agreement;

(ii) During the Term, you agree to provide Blackboard ninety (90) days’ 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 ninety (90) day 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

(c)  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 Benefits .

(a)  Severance . If during the Term of this Agreement, Blackboard terminates your employment without Cause (as defined in Section 5(a)) or you resign for Good Reason (as defined in Section 5(b)) and comply with the obligations set forth herein, then Blackboard will pay you $999,999 (“ Severance Payment ”) within 30 days following the effective date of termination and on each of the next two succeeding anniversaries of the date of your termination. Each Severance Payment shall be less applicable taxes and withholdings. To receive the Severance Payments you must sign a release of any and all claims in the form provided by Blackboard (the “ Release ”), and any applicable revocation period within respect to such release must expire within 30 days following your date of termination. Notwithstanding the foregoing, in the event that your termination occurs within the two year period following a Section 409A Change in Control Event, the aggregate amount of the three installments of the Severance Payments shall be made to you in a lump sum within 30 days following your termination of employment, provided that the Release is executed and any applicable revocation period with respect thereto has expired as of such date.

(b)  Section 409A . Subject to this Section 6(b), any payments or benefits under Section 6 shall begin only upon the date of your “separation from service” as defined below which occurs on or after the date of termination under Section 5. The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to you under this Section 6:

(i) It is intended that each installment of the payments and benefits provided under Section 6 shall be treated as a separate “payment” for purposes of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”). Neither Blackboard nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A;

(ii) If, as of the date of your “separation from service” from Blackboard, you are not a “specified employee” (each within the meaning of Section 409A), then each installment of the payments and benefits shall be made on the dates and terms set forth in Section 6; and

(iii) If, as of the date of your “separation from service” from Blackboard, you are a “specified employee” (each, for purposes of this Agreement, within the meaning of Section 409A), then:

(A) Each installment of the payments and benefits due under Section 6 that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A; and

(B) Each installment of the payments and benefits due under Section 6 that is not described within Section 6(b)(iii)(A) and that would, absent this subsection, be paid within the six-month period following your “separation from service” from Blackboard shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments and benefits if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service) or Treasury Regulation 1.409A-1(b)(9)(iv) (relating to reimbursements and certain other separation payments). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of the second taxable year following the taxable year in which the separation from service occurs.

(iv) The determination of whether and when a separation from service has occurred shall