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Pledge Agreement

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Exhibit 10.46



EXECUTION COPY



PLEDGE AGREEMENT none



THIS PLEDGE AGREEMENT, dated as of June 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, this " Pledge Agreementnone" ), is made by BLACKBAUD, INC., a Delaware corporation (the " Borrowernone" ) and the Subsidiaries of the Borrower who are or may become party hereto as pledgors (the " Subsidiary Pledgorsnone" and, together with the Borrower, as pledgors, the " Pledgorsnone" and, each individually, a " Pledgornone" ) and the Issuers and Partnerships/LLCs (each as hereinafter defined) party hereto, in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent (the " Administrative Agentnone" ), for the ratable benefit of itself and the financial institutions (the " Lendersnone" ) that are, or may from time to time become, parties to the Credit Agreement (as defined below).



STATEMENT OF PURPOSE none



Pursuant to the terms of that certain Credit Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the " Credit Agreementnone" ) by and among the Borrower, the Lenders and the Administrative Agent, the Lenders have agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein.

It is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Pledgors shall have executed and delivered this Pledge Agreement to the Administrative Agent, for the ratable benefit of itself and the Lenders.

The Pledgors are the legal and beneficial owners of (a) the shares of Pledged Stock (as hereinafter defined) issued by certain corporations (collectively, the " Issuersnone" ) as specified on Schedule Inone hereto and incorporated herein by reference (as such schedule may be amended, restated, supplemented or otherwise modified from time to time) and (b) the Partnership/LLC Interests (as hereinafter defined) in the partnerships and limited liability companies (collectively, the " Partnerships/LLCsnone" ) listed on Schedule Inone hereto and incorporated herein by reference (as such schedule may be amended, restated, supplemented or otherwise modified from time to time).

NOW, THEREFORE, in consideration of the foregoing premises and to induce the Administrative Agent and the Lenders to enter into and make available extensions of credit pursuant to the Credit Agreement, the Pledgors, the Issuers and the Partnership/LLCs hereby agree with the Administrative Agent, for the ratable benefit of itself and the Lenders, as follows:

SECTION 1. Defined Termsnone .

(a) The following terms shall have the following meanings:

" Codenone" means the Uniform Commercial Code as in effect in the State of North Carolina (as amended or otherwise modified from time to time); providednone that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than North Carolina, " Code" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

" Collateralnone" means the Stock Collateral and the Partnership/LLC Collateral.




" Obligationsnone" means:



(i) with respect to the Borrower, the meaning assigned thereto in the Credit Agreement;

(ii) with respect to each Subsidiary Pledgor, each Issuer and each Partnership/LLC, the obligations, if any, of such Subsidiary Pledgor, such Issuer and such Partnership/LLC under the Guaranty Agreement (including, without limitation, the Guaranteed Obligations, as defined in the Guaranty Agreement); and

(iii) with respect to all Pledgors, all Issuers and all Partnership/LLCs, all liabilities and obligations of the Pledgors, the Issuers and the Partnership/LLCs hereunder.



" Partnership/LLC Collateralnone" means the Partnership/LLC Interests and all Proceeds therefrom.

" Partnership/LLC Interestsnone" means the entire partnership or membership interest of the Pledgors in each Partnership/LLC (a) listed on Schedule Inone hereto (as such schedule may be amended, restated, supplemented or modified from time to time) and (b) now owned or existing or owned, acquired, or arising hereafter, in each case including, without limitation, the Pledgors' capital accounts, their interest as partners or members in the net cash flow, net profit and net loss, and items of income, gain, loss, deduction and credit of the Partnerships/LLCs, their interests in all distributions made or to be made by the Partnerships/LLCs to the Pledgors an d all of the other economic rights, titles and interests of the Pledgors as partners or members of the Partnerships/LLCs, whether set forth in the partnership agreement or membership agreement of the Partnerships/LLCs, by separate agreement or otherwise.

" Pledge Agreementnone" means this Pledge Agreement, as amended, restated, supplemented or otherwise modified from time to time.

" Pledged Stocknone" means the shares of capital stock of each Issuer (a) listed on Schedule Inone hereto (as such schedule may be amended, restated, supplemented or modified from time to time) and (b) now owned or existing or owned, acquired, or arising hereafter, together with all stock certificates, options or rights of any nature whatsoever that may be issued or granted by such Issuer to the Pledgors while this Pledge Agreement is in effect (including, without limitation, all of the other economic rights, titles and interests of any Pledgor as a shareholder or owner of such Issuer, whether set forth in the articles, bylaws or other governing document of such Issuer, by separate agreement or otherwise).

" Proceedsnone" means all " Proceeds" as such term is defined in Section 9-102(64) of the Code on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock and the Partnership/LLC Interests, collections thereon, proceeds of sale thereof or distributions with respect thereto.

" Security Interestsnone" means the security interests granted pursuant to Section 2none , as well as all other security interests created or assigned as additional security for the Obligations pursuant to the provisions of the Credit Agreement.

" Stock Collateralnone" means the Pledged Stock and all Proceeds therefrom.

(b) Capitalized terms defined in the Credit Agreement and not otherwise defined herein shall have the meaning assigned thereto in the Credit Agreement. Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Pledgor, shall refer to such Pledgor' s Collateral or the relevant part thereof. Capitalized terms defined in the Code and not otherwise defined herein shall have the meaning assigned thereto in the Code.







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SECTION 2. Pledge and Grant of Security Interestnone . The Pledgors hereby deliver to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, all certificates representing the Pledged Stock and Partnership/LLC Interests and hereby grant to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, a first priority security interest in the Pledged Stock, Partnership/LLC Interests and all other Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations; providednone , that any Security Interest in any Collateral constituting Pledged Stock or Partnership/LLC Interests issued by any Issuer or Partnership/LLC which is not organized under the laws of any political subdivision of the United States shall be limited to sixty-five percent (65%) of all issued and outstanding shares of all classes of voting Capital Stock of such Issuer or Partnership/LLC and one hundred percent (100%) of all issued and outstanding shares of all classes of non-voting Capital Stock of such Issuer or Partnership/LLC.



Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that a Pledgor may from time to time hereafter pledge and deliver additional shares of capital stock and/or partnership and membership interests to the Administrative Agent as collateral security for the Obligations. Upon such pledge and delivery to the Administrative Agent, such additional shares of capital stock and/or partnership and membership interests shall be deemed to be part of the Pledged Stock and/or Partnership/LLC Interests, as applicable, of such Pledgor and shall be subject to the terms of this Pledge Agreement whether or not Schedule Inone has been amended to refer to such additional shares as required by Section 7(i)none .

SECTION 3. Stock Powers; Register of Pledgenone . Concurrently with the delivery to the Administrative Agent of each certificate representing one or more shares of Pledged Stock, the Pledgors shall deliver an undated stock power covering such certificate, duly executed in blank by the applicable Pledgor with, if the Administrative Agent so requests, signature guaranteed.

SECTION 4. Partnership/LLC Interestsnone .



(a) Notwithstanding anything to the contrary contained in any limited liability agreement, operating agreement, membership agreement, partnership agreement or similar agreement relating to any Partnership/LLC Interests (as amended, restated, supplemented or otherwise modified from time to time, a " Partnership/LLC Agreementnone" ), each member, manager and partner shall be entitled to pledge its Partnership/LLC Interests to, and grant and collaterally assign to, the Administrative Agent, for the ratable benefit of itself and the Lenders, a lien and security interest in its Partnership/LLC Interests without any further consent, approval or action by any other party, including, without limitation, any other party to any Partnership/LLC Agreement or otherwise.

(b) Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent or its designee shall have the right (but not the obligation) to be substituted for the applicable Pledgor as a member, manager or partner under the applicable Partnership/LLC Agreement and the Administrative Agent or its designee shall have all rights, powers and benefits as a member, manager or partner, as applicable, under such Partnership/LLC Agreement. For avoidance of doubt, such rights, powers and benefits of a substituted member shall include all voting and other rights and not merely the rights of an economic interest holder. So long as this Pledge Agreement remains in effect, no further consent, approval or action by any other party including, without limitation, any other party to the Partnership/LLC Agreement or otherwise shall be necessary to permit the Administrative Agent or its designee to be substituted as a member, manager or partner pursuant to this paragraph. The rights, powers and benefits granted pursuant to this paragraph shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors, assigns and designated agents, as intended third party beneficiaries.







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SECTION 5. Pledgors Remain Liablenone . Anything herein to the contrary notwithstanding: (a) each Pledgor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder (including, without limitation, all of its obligations as a partner or member of any Partnership/LLC, if applicable) to the same extent as if this Pledge Agreement had not been executed, (b) the exercise by the Administrative Agent or any Lender of any of their respective rights hereunder shall not release any Pledgor from any of its duties or obligations under the contracts and agreements included in the Collateral (including, without limitation, all of its obligations as a partner or member of any Partnership/LLC, if applicable), (c) neither the Administrative Agent nor any Lender shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Pledge Agreement (including, without limitation, any obligations or l iabilities as a partner or member of any Partnership/LLC), nor shall the Administrative Agent or any Lender be obligated to perform any of the obligations or duties of any Pledgor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder, and (d) neither the Administrative Agent nor any Lender shall have any liability in contract or tort for any Pledgor' s acts or omissions.



SECTION 6. Representations and Warrantiesnone . To induce the Administrative Agent and the Lenders to execute the Credit Agreement and make any extensions of credit and to accept the security contemplated hereby, each Pledgor hereby represents and warrants that:



(a) Such Pledgor (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation; (ii) has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and (iii) is authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization except where the failure to be so qualified would not have a Material Adverse Effect.

(b) The execution, delivery and performance by such Pledgor of this Pledge Agreement (i) have all been duly authorized by all necessary action; (ii) are within the power and authority of such Pledgor; (iii) do not and will not require any Governmental Approval or violate any Applicable Law relating to such Pledgor; (iv) do not and will not conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organization documents of such Pledgor or any indenture, agreement or other instrument to which such Pledgor is a party or by which any of its properties may be bound or any Governmental Approval relating to such Pledgor; (v) do not and will not result in the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Pledgor other than Liens arising under the Loan Documents or (vi) do not and will not require any consent or authorization of, filing with, or other act in respect of, any arbitrator or Governmental Authority.

(c) This Pledge Agreement is a legal, valid and binding obligation of such Pledgor, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors' rights in general and the availability of equitable remedies.

(d) All necessary permits, registrations and consents for such making and performance of this Pledge Agreement have been obtained (including, without limitation, the consent of any stockholder or creditor of any Pledgor or any Issuer or any general or limited partner or member of any Partnership/LLC).







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(e) The Security Interests will constitute valid and perfected first and prior Liens on the Collateral described herein, subject to no other Liens whatsoever except Permitted Liens.



(f) Each financing statement naming such Pledgor as a debtor and attached hereto as Addendum Anone is in appropriate form for filing in the appropriate filing offices of the states specified on Schedule IInone and, upon the filing of appropriate financing statements in such filing offices, the Security Interests will be perfected to the extent such Security Interests can be perfected by the filing of financing statements.

(g) The shares of Pledged Stock listed on Schedule Inone (as such schedule may be amended, restated, supplemented or otherwise modified from time to time) constitute (i) all of the issued and outstanding shares of all classes of the Capital Stock of each Issuer that is a Domestic Subsidiary, (ii) sixty-five percent (65%) of all issued and outstanding shares of all classes of voting Capital Stock of each Issuer that is a first-tier Foreign Subsidiary and (iii) one hundred percent (100%) of all issued and outstanding shares of all classes of non-voting Capital Stock of each Issuer that is a first-tier Foreign Subsidiary.

(h) The Partnership/LLC Interests listed on Schedule Inone (as such schedule may be amended, restated, supplemented or otherwise modified from time to time) constitute (i) all of the outstanding ownership interests in which each Pledgor has any right, title or interest in each Partnership/LLC which is a Domestic Subsidiary, (ii) sixty-five percent (65%) of the outstanding voting ownership interests in which each Pledgor has any right, title and interest in each Partnership/LLC which is a first-tier Foreign Subsidiary and (iii) one hundred percent (100%) of all issued and outstanding shares of all classes of non-voting ownership interests of each Partnership/LLC that is a first-tier Foreign Subsidiary.

(i) The Pledged Stock has been duly and validly issued and is fully paid and nonassessable and all of the Partnership/LLC Interests have been duly and validly issued.

(j) Such Pledgor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock and Partnership/LLC Interests listed on Schedule Inone (as such schedule may be amended, restated, supplemented or otherwise modified from time to time) free of any and all Liens or options in favor of, or claims of, any other Person, except the Lien created by this Pledge Agreement.

(k) Such Pledgor is organized under the laws of the state identified on Schedule IInone under such Pledgor' s name. The taxpayer identification number and Registered Organization number of such Pledgor is set forth on Schedule IInone under such Pledgor' s name. The chief place of business, chief executive office and any other office where such Pledgor keeps its books and records relating to the Collateral are located at the locations specified on Schedule IInone under such Pledgor' s name. Such Pledgor does no business nor has done business during the past five years under any trade name or fictitious business name except as disclosed on Schedule IInone under such Pledgor' s name.

(l) Upon delivery to the Administrative Agent of the stock certificates evidencing the Pledged Stock, the Lien granted pursuant to this Pledge Agreement will constitute a valid, perfected first priority Lien on the Collateral, enforceable as such against all creditors of the Pledgors and any Persons purporting to purchase any of the Collateral from any Pledgor.







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(m) None of the Partnership/LLC Interests (i) are traded on a Securities exchange or in Securities markets, (ii) by their terms expressly provide that they are Securities governed by Article 8 of the Code, (iii) are Investment Company Securities (as defined in the Code) or (iv) are held or maintained in the form of a Securities Entitlement or credited to any Securities Account.



(n) The Pledgors have delivered or made available to the Administrative Agent true and complete copies of the partnership agreements and operating agreements, as applicable, for each of the Partnerships/LLCs, which partnership agreements and operating agreements are currently in full force and effect and have not been amended or modified except as disclosed to the Administrative Agent in writing.



SECTION 7. Certain Covenantsnone . The Pledgors covenant and agree with the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, that, from and after the date of this Pledge Agreement until the Obligations are paid in full and the Commitments are terminated:



(a) Each Pledgor shall promptly notify the Administrative Agent, in writing, of (i) any Lien (other than the Lien created by this Pledge Agreement or Permitted Liens) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder or (b) the acquisition or ownership by such Pledgor of any Collateral after the date hereof. At the request of the Administrative Agent or the Required Lenders, each Pledgor shall promptly (and in any event within ten (10) Business Days after such request) deliver to the Administrative Agent updated Schedules to this Agreement.

(b) The Pledgors agree that as partners or members in the Partnerships/LLCs they will abide by, perform and discharge each and every obligation, covenant and agreement to be abided by, performed or discharged by the Pledgors under the terms of the partnership agreements and operating agreements, as applicable, of the Partnerships/LLCs, at no cost or expense to the Administrative Agent and the Lenders.

(c) If any Pledgor shall, as a result of its ownership of the Collateral, become entitled to receive or shall receive any Certificated Securities (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any of the Collateral, or otherwise in respect thereof, such Pledgor shall accept the same as the agent of the Administrative Agent, hold the same in trust for the Administrative Agent and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Pledgor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Pledgor, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations; providednone , that at no time shall the Pledged Stock or Partnership/LLC Interests of any Issuer or Partnership/LLC that is a first-tier Foreign Subsidiary exceed sixty-five percent (65%) of the voting Pledged Stock or voting Partnership/LLC Interests of such Subsidiary and one hundred percent (100%) of the non-voting Pledged Stock or non-voting Partnership/LLC Interests of such Subsidiary. In addition, except as provided by Section 10.4(d) none of the Credit Agreement, any sums paid upon or in respect of the Collateral upon the liquidation or dissolution of any Issuer or Partnership/LLC shall be held by the Administrative Agent as additional collateral security for the Obligations.

(d) Without the prior written consent of the Administrative Agent, no Pledgor will (i) vote to enable, or take any other action to permit, any Issuer or Partnership/LLC to issue any stock, partnership interests, limited liability company interests or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock,







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partnership interests, limited liability company interests or other equity securities of any nature of such Issuer or Partnership/LLC except for additional Pledged Stock or Partnership/LLC Interests that will be subject to the Security Interest granted herein, (ii) except as expressly provided to the contrary herein or in the Credit Agreement, consent to any modification, extension or alteration of the terms of any partnership agreement or operating agreement of the Partnerships/LLCs, (iii) except as expressly provided to the contrary herein or in the Credit Agreement, accept a surrender of any partnership agreement or operating agreement of any of the Partnerships/LLCs or waive any breach of or default under any partnership agreement or operating agreement of any of the Partnerships/LLCs by any other party thereto, (iv) except as expressly permitted pursuant to the terms of the Credit Agreement, sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, or (v) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the
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