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Exhibit 10.46
 

April 14, 2006

Mr. Scott Whitaker
Controller/Bookkeeper
Smart Online, Inc.
2530 Meridian Parkway
Durham, North Carolina  27713
 

Dear Scott:

This letter confirms that pursuant to Article X of its Bylaws, Smart Online,
Inc. will indemnify you, to the fullest extent permitted by Delaware law, for
any and all fees and expenses, as defined in Article X of the Bylaws
("Expenses"), including but not limited to attorneys' fees incurred by you or on
your behalf in connection with a proceeding that has been initiated by the
Securities and Exchange Commission and any other related proceeding that may
arise ("Proceeding").

Pursuant to Article X of its Bylaws, Smart Online, Inc. further agrees that
having received an undertaking from you agreeing that you will repay the
Expenses described herein should it ultimately be determined that you were not
entitled to indemnification, Smart Online, Inc. will pay Expenses incurred by
you in advance of the final disposition of the Proceeding.

 
Very truly yours,
     
/s/ Dennis Michael Nouri
 
Dennis Michael Nouri
 
President and Chief Executive Officer
Smart Online, Inc.

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UNDERTAKING

Pursuant to Article X of the Bylaws of Smart Online, Inc., I hereby undertake
and agree that I will repay any Expenses advanced to me or others on my behalf
in the event that it ultimately is determined that I was not entitled to
indemnification under the Bylaws and the law of the State of Delaware. I
understand that this Undertaking does not and cannot bind third parties, such as
my attorneys, to repay any Expenses paid to them for work done on my behalf.

 
By: /s/ Scott Whitaker
 
     Name: Scott Whitaker
     Title:  Controller
 
Dated:   April 19, 2006