Document:

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                                                                   Exhibit 10.43

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (herein
called this "AMENDMENT") made as of March 15, 2004 by and between PREFERRED HOME
MORTGAGE COMPANY, a Florida corporation ("BORROWER"), and GUARANTY BANK
("LENDER"),

                              W I T N E S S E T H:

         WHEREAS, Borrower and Lender have entered into that certain Amended and
Restated Credit Agreement dated as of December 19, 2003 (the "CREDIT
AGREEMENT"), for the purposes and consideration therein expressed, pursuant to
which Lender became obligated to make loans to Borrower as therein provided; and

         WHEREAS, Borrower and Lender desire to amend the Credit Agreement as
provided herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Credit Agreement, in
consideration of the loans which may hereafter be made by Lender to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.

                           DEFINITIONS AND REFERENCES

         1.1 TERMS DEFINED IN THE CREDIT AGREEMENT. Unless the context otherwise
requires or unless otherwise expressly defined herein, the terms defined in the
Credit Agreement shall have the same meanings whenever used in this Amendment.

                                  ARTICLE II.

                         AMENDMENTS TO CREDIT AGREEMENT

         2.1 DEFINITIONS. The definition of "Parent Debt Agreements" in SECTION
1.1 of the Credit Agreement is hereby amended in its entirety to read as
follows:

               "PARENT DEBT AGREEMENTS" means each of the following: (i) the
      Parent Credit Agreement, all related guaranties and pledge agreements and
      other instruments from time to time delivered in connection therewith;
      (ii) that certain Senior Indenture dated as of June 25, 2002 among the
      Parent, as issuer, the subsidiary guarantors party thereto and Wells Fargo
      Bank Minnesota, National Association, as trustee, pursuant to which the
      Parent's 9% Senior Notes due 2010 are issued; (iii) that certain Senior
      Subordinated Indenture dated as of June 25, 2002 among the Parent, as
      issuer, the subsidiary guarantors party thereto and Wells Fargo Bank
      Minnesota, National Association, as trustee, pursuant to which the
      Parent's 10 3/8% Senior Subordinated Notes due 2012 are issued; (iv) that
      certain Indenture dated as of February 3, 2003 among the Parent, as
      issuer, the subsidiary

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         guarantors party thereto and Wells Fargo Bank Minnesota, National
         Association, as trustee, pursuant to which the Parent's 9% Senior Notes
         due 2010 are issued, and (v) that certain Senior Subordinated Indenture
         dated as of March 17, 2004 among the Parent, as issuer, the subsidiary
         guarantors party thereto and Wells Fargo Bank, National Association, as
         trustee, pursuant to which the Parent's 7 1/2% Senior Subordinated
         Notes due 2011 are issued, in each case of clauses (i) through (v), as
         the same may be amended, modified, supplemented, waived, replaced,
         refinanced from time to time.

                                  ARTICLE III.

                   CONDITIONS, REPRESENTATIONS AND WARRANTIES

         3.1 EFFECTIVE DATE. This Amendment shall become effective as of the
date first above written when and only when Lender shall have received, at
Lender's office, a duly executed counterpart of this Amendment.

                                  ARTICLE IV.

                                  MISCELLANEOUS

         4.1 ACKNOWLEDGMENT. Except as otherwise specified herein, the terms and
provisions of the Credit Agreement are ratified and confirmed and shall remain
in full force and effect, enforceable in accordance with their terms. Borrower
hereby acknowledges, agrees and represents that (i) contemporaneously with the
effectiveness of this Amendment, the representations and warranties of Borrower
contained in the Credit Agreement are true and correct representations and
warranties, and (ii) Borrower has no set-offs, counterclaims, defenses or other
causes of action against Lender arising out of the Credit Agreement, this
Amendment or otherwise, and to the extent any such set-offs, counterclaims,
defenses or other causes of action may exist, whether known or unknown, such
items are hereby waived by Borrower.

         4.2 PARENT ACKNOWLEDGMENT. By signature below, Parent hereby consents
to Borrower's execution of this Amendment and hereby ratifies and confirms the
Keep-Well Agreement executed by Parent. Parent hereby acknowledges, agrees and
represents that (i) contemporaneously with the effectiveness of this Amendment,
the representations and warranties of Parent contained in the Keep-Well
Agreement are true and correct representations and warranties, and (ii) Parent
has no set-offs, counterclaims, defenses or other causes of action against
Lender arising out of the Keep-Well Agreement or otherwise, and to the extent
any such set-offs, counterclaims, defenses or other causes of action may exist,
whether known or unknown, such items are hereby waived by Parent.

         4.3 GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas and any applicable laws of the
United States of America in all respects, including construction, validity and
performance.

         4.4 COUNTERPARTS; FAX. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment. This Amendment may be duly executed by facsimile or other electronic
transmissions.

                                       2
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IN WITNESS WHEREOF, this Amendment is executed effective as of the date first
above written.

                                       PREFERRED HOME MORTGAGE COMPANY

                                       By: /s/ Patricia M. Petersen
                                           -------------------------------------
                                           Patricia M. Petersen
                                           Secretary

                                       GUARANTY BANK

                                       By: /s/ Randy Reid
                                           -------------------------------------
                                           Randy Reid
                                           Senior Vice President

CONSENTED AND AGREED TO BY:

TECHNICAL OLYMPIC USA, INC.,
a Delaware corporation

/s/ Patricia M. Petersen
----------------------------------
Patricia M. Petersen
Vice President and General Counsel

                                       3<PAGE>

                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is made
and entered into effective as of the 1st day of April, 2004 (the "Effective
Date"), by and between Blackbaud, Inc., a South Carolina corporation (the
"Company") and Robert J. Sywolski ("Executive").

                                    RECITALS

         WHEREAS, the Company and Executive entered into an Employment and
Noncompetition Agreement on or about March 1, 2000 (the "2000 Employment
Agreement"), the term of which will expire as of March 31, 2004; and

         WHEREAS, the Company and Executive desire to continue Executive's
employment as the President and Chief Executive Officer of the Company; and

         WHEREAS, the Board of Directors ("Board") of the Company has determined
what a reasonable compensation will be for Executive for the term of this
present Agreement, and has offered Executive continued employment for such
compensation and other benefits set forth herein, and Executive is willing to
accept continued employment on such terms.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants of the parties set forth herein, and for other good and
valuable new consideration, the receipt and sufficiency of which are
acknowledged, IT IS HEREBY AGREED AS FOLLOWS:

                                    AGREEMENT

         1. Employment; Term. Subject to and upon the terms and conditions
herein provided, the Company hereby agrees to employ Executive and Executive
hereby agrees to be employed by the Company for the term of this Agreement,
which term shall begin as of the Effective Date and shall continue until March
31, 2006 (the "Term") unless earlier terminated as provided herein.

         2. Executive Responsibilities. During the Term, Executive shall serve
as President and Chief Executive Officer of the Company, and shall have the
power and authority to conduct the business of the Company commensurate with the
office of Chief Executive Officer. Executive shall perform duties consistent
with Executive's knowledge, experience and position with the Company. In
performing such duties, Executive shall be subject to and shall abide by all
policies and procedures developed by the Company for, and all the rules and
regulations applicable to, senior executives of the Company.

         During the Term, Executive shall devote his entire business time,
energies, skills and attention to the affairs and activities of the Company and
the discharge of his duties and responsibilities; provided, however, Executive
shall be allowed to continue to serve on the Board of Directors of no more than
three (3) outside for-profit companies and such additional boards of directors
as have been or may be approved in advance by the Chairman of the Board of
Directors; provided further, however, that Executive's ability to devote the
required time,

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energies, skills and attention to perform his duties hereunder is not impaired.
It is contemplated that Executive shall perform charitable and industry related
work, and may serve on the board of directors of such organizations. For such
time that Executive is the President and Chief Executive Officer of the Company,
he shall be elected as a director of the Company.

         3. Compensation.

                  3.1 Base Salary. In consideration for the services provided
hereunder, the Company shall pay to Executive an annual base salary of
$525,000.00, subject to applicable federal, state and local payroll taxes, and
other withholdings required by law or properly requested by Executive (the "Base
Salary"). The Base Salary shall be payable in conformity with the Company's
customary payroll practices. Such Base Salary shall be subject to annual review
for increase in the sole discretion of the Company's Board.

                  3.2 Bonus.

                  (a) During the Term of this Agreement, Executive shall be
eligible to receive a bonus ("Bonus Compensation"). The formula to be used to
calculate the aggregate amount of Bonus Compensation payable for each year of
this Agreement shall be based upon the formula set forth in the Company's 2004
Bonus Plan, attached hereto as Schedule 3.2 (a).

                  3.3 Additional Compensation. In addition to Base Salary and
any Bonus Compensation, Executive shall be eligible for the following additional
compensation.

                  a. Executive, at the Company's expense, shall be eligible to
         participate in all employee benefit plans and fringe benefits
         (including post retirement benefit plans and programs, if any) as may
         be provided by the Company from time to time on the same basis as other
         senior executives of the Company are eligible, subject to and to the
         extent that Executive is eligible under such benefit plans in
         accordance with their respective terms.

                  b. Executive shall be entitled to reasonable periods of paid
         vacation, personal and sick leave during the Term in accordance with
         the Company's policies regarding vacation and leaves for senior
         executives of the Company.

                  c. The Company shall pay or reimburse Executive for all of his
         out of pocket expenses reasonably incurred in the performance of his
         duties hereunder on behalf of the Company, including, but not limited
         to, overnight delivery charges, long distance telephone and facsimile
         charges and travel expenses (including airfare, hotels, car rental
         expenses and meals), all in accordance with the Company's expense
         reimbursement policy. Payment shall be due after the Company's receipt
         of Executive's invoice or expense report therefor and in accordance
         with the Company's expense reimbursement policies. In addition, the
         Company shall reimburse Executive in an amount up to $5,000.00 annually
         for professional fees incurred by Executive for income tax and estate
         planning, and up to $10,000 for Executive's out-of-pocket legal
         expenses incurred in connection with the negotiation of this Agreement.

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                  d. During the Term, the Company shall provide the Executive
         with health and disability insurance, in scope and coverage equivalent
         to that provided to other senior executives of the Company; provided,
         however, that the disability insurance coverage shall be for an amount
         not less than 80% of Executive's Base Salary and such coverage may be
         provided by the Company supplementing benefits consistent with the
         Company's existing group disability policy.

                  e. Pursuant to the 2000 Employment Agreement, the Company
         granted Executive an option (the "Option") to purchase up to seven
         percent (7%) of the fully-diluted Common Stock of the Company, subject
         to the vesting schedule, terms, conditions and restrictions set forth
         in a the Option Agreement dated March 8, 2000, a copy of which is
         attached hereto as Exhibit A (the "Option Agreement"), and the
         Company's Stock Plan. In accordance with the 2000 Employment Agreement,
         the shares subject to the Option will vest immediately: (i) upon
         consummation of an initial public offering of the Company's stock, or
         (ii) upon a change of control. A "Change of Control" shall mean the
         consummation of (i) a merger or consolidation in which the shareholders
         of the Company immediately prior to the merger or consolidation cease
         to own at least 50% of the combined entity immediately following the
         merger or consolidation, or (ii) a sale of all or substantially all of
         the assets of the Company (other than to Hellman & Friedman Capital
         Partners III, L.P. and its affiliates or an entity in which they are
         the controlling members). Notwithstanding anything to the contrary in
         this Agreement, any Company stock plan, or the Option Agreement, in the
         event Executive is terminated by the Company without Cause, Executive
         shall have until the termination date of the Option Agreement to
         exercise such Option for shares vested at the date of such termination.

                  f. The Company will reimburse Executive for the costs of one
         (1) family membership in the Daniel Island Club.

                  g. The Company shall (i) provide Executive with a car
         comparable to those provided for senior executives of the Company or
         (ii) provide Executive an allowance for a car consistent with the
         allowance provided for senior executives of the Company. In either
         case, the Company shall either cover or reimburse Executive the
         reasonable costs of maintenance and upkeep therefor. Upon retirement of
         the Executive or upon termination or expiration of this Agreement, the
         Executive may purchase any such Company-owned automobile for its then
         book value.

                  h. The Company shall, upon retirement of the Executive or upon
         termination or expiration of this Agreement where the termination is
         other than For Cause, provide so long as commercially available, group
         health and life insurance plans for Executive and his spouse until the
         last to die of the Executive and his spouse, at the same level and on
         substantially similar terms and conditions as in effect for current
         employees of the Company, provided that such coverage shall continue
         only so long as Executive and/or his spouse, as applicable, shall
         reimburse the Company for the cost of such coverage.

                  i. With respect to the Option, in the event that the Company
         shall declare a cash dividend on the shares of common stock underlying
         the Option, and at such time, the Company does not have a class of
         securities registered under the 1933 Securities Act, the

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         Company shall make a payment to Executive, as selected in writing by
         Executive, of either (i) a sum of cash equal to the amount of the
         aggregate dividend that would have been payable to Executive assuming
         for purposes of such calculation that Executive owned all of the shares
         of common stock underlying the Option, or (ii) a combination of fifty
         (50%) percent of the sum of cash payable under (i) above and a
         reduction in the per share strike price of the Option equal to fifty
         (50%) of the sum payable under (i) above. For example, if Executive
         owned an option to purchase 100,000 shares and at such time a dividend
         of $1.00 were declared, Executive would be entitled to receive either
         (i) $100,000 in cash or (ii) $50,000 in cash and a reduction of $.50
         per share in the strike price of his options.

         With respect to each of the items of benefit listed in this Section 3
and any vesting or other criteria for eligibility applicable thereto, Executive
shall be credited with length of service beginning as of the initial date of his
employment by the Company, except as otherwise required by law.

         4. Termination.

                  4.1 For Cause By Company. During the Term, the Company may
terminate Executive's employment under this Agreement at any time for "Cause"
and Executive shall thereafter be entitled to no compensation or benefits under
this Agreement, except for accrued but unpaid salary, vacation, benefits and
reimbursements, through the date of termination. For purposes of this Agreement,
"Cause" means:

                  a. Executive's conviction, that is final and non-appealable,
         of, or plea of nolo contendere to, any crime (whether or not involving
         the Company) that constitutes a felony in the jurisdiction involved
         (other than unintentional motor vehicle felonies and excluding routine
         traffic citations), other than a felony predicated exclusively on
         Employee's Vicarious Liability. "Vicarious Liability" for purposes of
         this Agreement shall mean any liability which is based on acts of the
         Company for which the Executive is charged solely as a result of his
         offices with the Company and in which he was not directly involved or
         did not have prior knowledge of such actions or intended actions.

                  b. any act of theft, fraud or embezzlement, or any other
         willful misconduct or willful dishonest behavior by Executive, which is
         materially detrimental to the business, operations of the Company;

                  c. Executive's continuing willful failure or refusal to
         perform his reasonably assigned duties (consistent with past practice
         of the Company) under this Agreement in accordance with Section 2
         (other than due to his incapacity due to illness or injury), provided
         that such willful failure or refusal is not corrected as promptly as
         practicable, and in any event within thirty (30) days after Executive
         shall have received written notice stating the nature of such failure
         or refusal; or

                  d. Executive's violation of any of his material obligations
         contained in that certain Employee Nondisclosure and Developments
         Agreement dated as of the date hereof and attached as Exhibit B hereto.

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         For purposes of this Agreement, no act or omission by Executive shall
be willful if reasonably believed by Executive to be in or not contrary to, the
best interests of the Company.

                  4.2 Without Cause by Company. During or after the Term, the
Company may terminate Executive's employment under this Agreement at any time
and for any reason without Cause. If the Company terminates Executive's
employment pursuant to the provisions of this Section 4.2 during the Term
(without cause), Executive shall, in addition to all accrued but unpaid Base
Salary and Bonus Compensation through the date of termination, following such
termination, receive a lump-sum amount equal to the Base Salary being paid to
him immediately prior to such termination for the remainder of the Term along
with such accrued rights as may be vested as of such date under any Company
benefits and Bonus Compensation plans (the "Severance Payment"). In the event of
any such termination, Executive shall be entitled to the applicable Severance
Payment set forth above and no further severance or other compensation or
benefits, except those specified under Section 3.3 (h).

                  4.3 Without Reason By Executive. During the Term, Executive
may voluntarily terminate his employment by giving the Company written notice no
less than ninety (90) days in advance of the effective date of such termination.
If Executive voluntarily terminates his employment pursuant to the provisions of
this Section 4.3, Executive shall not be entitled to receive any compensation or
benefits for the period following the date of such termination other than the
proceeds of, or payment of any benefits under, any pension plans or other
similar plans in effect on the date thereof. In the event of any such
termination, Executive shall be entitled to accrued and unpaid salary, vacation,
benefits and reimbursements through the termination date and no further
severance or other compensation or benefits.

                  4.4 For Good Reason by Executive. During the Term, Executive
may terminate his employment under this Agreement at any time for "Good Reason."
For purposes of this Agreement, "Good Reason" means:

                  a. Any materially adverse change or diminution in the office,
title, duties, powers, authority or responsibilities of Executive, provided such
change or diminution continues uncorrected for a period of thirty (30) days
after the Company shall have received written notice stating the nature of such
change or diminution;

                  b. The occurrence of a Change of Control, provided that within
sixty (60) days after such occurrence or the date Executive is notified thereof,
whichever is later, Executive gives the Company written notice of Executive's
intention to terminate on an effective date of termination that is no less than
ninety (90) days after the date of such notice; or

                  c. A failure of the Company to pay Executive any Base Salary,
Bonus Compensation, benefits or, unless there is a good faith dispute,
reimbursements that have become due and payable within 30 days after Executive
has given the Company written notice of demand therefor.

                  d. A reduction in the Executive's then Base Salary or target
Bonus Compensation or a material reduction of any material employee benefit or
perquisite enjoyed by

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him (other than as part of an across-the-board change or reduction applicable to
all senior officers of the Company).

                  e. A failure of the Executive to be elected as a director of
the Company during the term of this Agreement or his removal from such position
during such term.

                  f. A relocation of the Company's principal office, or the
Executive's own office location as assigned to him by the Company, to a location
more than 40 miles from Charleston, S.C. In the event that Executive elects not
to terminate his employment under this Section 4.4, the Company shall promptly
reimburse the Executive for the reasonable expenses he incurs in relocating his
household and family from their present location to the location of his new
office, without limitation, all expenses associated with selling his primary
residence in Charleston, S.C. and all closing costs relating to his acquisition
of a residence in the area of his new office, such a legal expenses.

                  g. Failure of the Company to obtain the assumption in writing
of its obligation to perform this Agreement by any purchaser (other than Hellman
& Friedman Capital Partners III, L.P. and its affiliates or an entity in which
they are the controlling members) of all or substantially all of the assets of
the Company within 15 days after a sale or transfer of such assets.

         Within thirty (30) days after the occurrence of a termination for Good
Reason, in addition to all accrued but unpaid Base Salary and Bonus Compensation
through the date of such termination, Executive shall be entitled to receive the
Severance Payment, and shall be entitled to receive continued coverage under
Section 3.3 (h).

                  4.5 Termination for Disability or Death. During the Term,
Executive's employment may be terminated by either party in the event Executive
suffers a physical or mental disability (as defined below) which, in the
reasonable opinion of a medical doctor selected by the agreement of the Company
and the Executive, renders him substantially unable to perform his duties under
this Agreement. In the event that the parties cannot agree on a medical doctor,
each party shall select a medical doctor and the two doctors shall select a
third who shall be the approved medical doctor for this purpose. To the extent
that the expenses associated with any such medical determination are not covered
by medical insurance, the Company shall bear all such costs. Executive shall be
deemed to be permanently disabled in the event that Executive has been unable,
for a period of ninety (90) consecutive days or one hundred eighty (180)
nonconsecutive days during any 360-day period to perform the services
contemplated hereby as a result of incapacity caused by a physical or mental
illness or injury. If Executive is terminated under this Section 4.5, he shall
be entitled to such benefits as are generally available under the Company's
disability insurance policies, if any. Except as otherwise provided herein, if
Executive dies or is terminated due to a disability under this Section 4.5,
Executive or his estate shall be entitled to accrued and unpaid salary,
vacation, benefits (including specifically the coverage provided under Section
3.3(h), reimbursements and Bonus Compensation prorated through the termination
date and no further severance or compensation or benefits. Notwithstanding
anything to the contrary in this Agreement, the Company's Stock Plan, or the
Option Agreement, upon Executive's death or disability as defined herein,
one-half (1/2) of the

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remaining unvested shares subject to the Option shall vest and Executive (or his
estate) shall have until the termination date of the Option Agreement to
exercise such Option.

                  4.6 No Mitigation: No Offset. In the event of any termination
of employment under this Section 4, the Executive shall be under no obligation
to seek other employment and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain.

         5. Non-Disclosure. Executive executed an Employee Nondisclosure and
Developments Agreement, a copy of which is attached hereto as Exhibit B, the
terms and conditions of which are incorporated herein by reference as if fully
set out.

         6. Possession. Executive agrees that upon termination of this
Agreement, or upon request by the Company, Executive shall turn over to the
Company all documents, files, office supplies and any other material or work
product in his possession or control which were created pursuant to or derived
from Executive's services to the Company.

         7. Noncompetition.

                  7.1 Noncompetition Provisions. Executive recognizes and agrees
that the Company has many substantial, legitimate business interests that can be
protected only by Executive agreeing not to compete with the Company or its
subsidiaries under certain circumstances. These interests include, without
limitation, the Company's contacts and relationships with its customers, the
Company's reputation and goodwill in the industry, the financial and other
support afforded by the Company, and the Company's rights in its confidential
information. Executive therefore agrees that during his employment with the
Company and for the one (1) year period of time following the termination of
such employment, regardless of the manner or cause of such termination, he will
not, without the prior written consent of the Company, engage in any of the
following activities in the United States (the "Protected Zones"), relating to
the Protected Businesses (as defined below):

                  a. engage in, manage, operate, control or supervise, or
         participate in the management, operation, control or supervision of,
         any business or entity which provides products or services directly
         competitive with those being actively developed, manufactured,
         marketed, sold or otherwise provided by the Company or its subsidiaries
         as of the date hereof (the "Protected Businesses") in the Protected
         Zones;

                  b. have any ownership or financial interest, directly or
         indirectly, in any entity in the Protected Zones engaged in the
         Protected Businesses, including, without limitation, as an individual,
         partner, shareholder (other than as an owner of an entity in which
         Executive owns less than 5% of the economic interests), officer,
         directly, executive, principal, agent or consultant;

                  c. solicit, acquire or conduct any Protected Business from or
         with any customers of the Company or its subsidiaries (as defined
         below) in the Protected Zones;

                  d. solicit any of the employees or independent contractors of
         the Company or its subsidiaries or induce any such persons to terminate
         their employment or contractual

<PAGE>

         relationships with any such entities or take action contrary to the
         best interest of the Company; provided, however, this limitation
         against solicitation of employees or independent contractors shall not
         apply to up to two administrative level employees or independent
         contractors who may have worked closely with Executive (such as, for
         example, an executive assistant who Executive may wish to continue to
         work with); or

                  e. serve as an officer or director of, or hold an equity
         interest in, any entity engaged in any of the Protected Businesses in
         the Protected Zones.

         For purposes of this Section 7, customers of the Company or its
subsidiaries shall include those customers to whom the Company or its
subsidiaries were providing products or services at the termination of
Executive's employment, or had proposals outstanding for the provision of
services, at the time of such termination.

                  7.2 Separate Covenants. The parties understand and agree that
the noncompetition agreement set forth in this Section 7 shall be construed as a
series of separate covenants not to compete: one covenant for each country,
state and province within the Protected Zone, one for each separate line of
business of the Company, and one for each month of the noncompetition period. If
any restriction set forth in this Section 7 is held by a court of competent
jurisdiction to be unenforceable with respect to one or more geographic areas,
lines of business and/or months of duration, then Executive agrees, and hereby
submits, to the reduction and limitation of such restriction to the minimal
effect necessary so that the provisions of this Section 7 shall be enforceable.

                  7.3 Limitation. Nothing contained in this Agreement or in
Exhibit B attached hereto shall prohibit Executive from utilizing his skill,
acumen or experience after a termination of his employment with the Company in
any business not in violation of this Section 7 at any location not in violation
of this Section 7.

         8. Indemnification.

                  8.1 General Indemnification Provisions. The Company agrees
that if the Executive is made a party, or is threatened to be made a party, to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he is or was a
director, officer or employee of the Company or is or was serving at the request
of the Company as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive's alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Company to the fullest extent legally
permitted or authorized by the Company's certificate of incorporation or bylaws
or resolutions of the Company's Board of Directors, or if greater, by the laws
of the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a
director, member, employee or agent of the Company or other entity and shall
inure to the benefit of the Executive's heirs, executors and administrators. The
Company shall advance to the Executive all reasonable costs and expenses

<PAGE>

incurred by him in connection with a Proceeding within 20 days after receipt by
the Company of a written request for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses.

                  8.2 Insurance Coverage. The Company agrees to continue and
maintain a directors and officers' liability insurance policy covering the
Executive to the extent the Company provides such coverage for its other
executive officers.

         9. Saving Provision. The Company and Executive agree and stipulate that
the agreements set out in Sections 5 and 7 above are fair and reasonably
necessary for the protection of the business, goodwill, confidential
information, and other protectable interests of the Company in light of all of
the facts and circumstances of the relationship between Executive and the
Company. In the event a court of competent jurisdiction should decline to
enforce those provisions, they shall be deemed to be modified to restrict
Executive to the maximum extent which the court shall find enforceable; however,
in no event shall the above provisions be deemed to be more restrictive to
Executive than those contained herein.

         10. Injunctive Relief. Executive acknowledges that the breach or
threatened breach of any of the nondisclosure or noncompetition covenants
contained herein would give rise to irreparable injury to the Company, which
injury would be inadequately compensable in money damages. Accordingly, the
Company may seek and obtain a restraining order and/or injunction prohibiting
the breach or threatened breach of any provision, requirement or covenant of
this Agreement, in addition to and not in limitation of any other legal remedies
which may be available. Executive further acknowledges and agrees that the
agreements set out above are necessary for the protection of the Company's
legitimate goodwill and business interests and are reasonable in scope and
content.

         11. Enforcement. The provisions of this Agreement shall be enforceable
notwithstanding the existence of any claim or cause of action against the
Company by Executive or against Executive by the Company, whether predicated on
this Agreement or otherwise.

         12. Governing Law. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship, whether or not
arising under this Agreement, shall be governed by and construed in accordance
with the internal laws of the State of South Carolina, without regard to
conflict of law principles.

         13. Waiver of Breach. The waiver of any breach of any provision of this
Agreement or failure to enforce any provision hereof shall not operate or be
construed as a waiver of any subsequent breach by any party.

         14. Notices. Any notice given to a Party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:

If to the Company:         Blackbaud, Inc.
                           2000 Daniel Island Drive

<PAGE>

                           Charleston, South Carolina 29492
                           Attention: Senior Vice President and General Counsel

If to the Executive:       Mr. Robert J. Sywolski
                           51 Legare Street
                           Charleston, South Carolina 29401

         With a copy to:
                           Edward G. R. Bennett
                           Evans, Carter, Kunes & Bennett, PA
                           115 Church Street
                           Charleston, South Carolina 29401

         15. Modification. This Agreement may be modified, and the rights,
remedies and obligations contained in any provision hereof may be waived, only
in accordance with this Section. No waiver by either party or any breach by the
other or any provision hereof shall be deemed to be a waiver of any later or
other breach thereof or as a waiver of any other provision of this Agreement.
This Agreement may not be waived, changed, discharged or terminated orally or by
any course of dealing between the parties, but only by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought. No modification or waiver by the Company shall be effective without the
consent of at least a majority of the members of the Board of Directors of the
Company then in office at the time of such modification or waiver, excluding
Executive's vote as a director on such matters.

         16. Entirety. This Agreement, including any exhibits hereto, as it may
be amended pursuant to the terms hereof, represents the complete and final
agreement of the parties and shall control over any other statement,
representation or agreement by the Company (e.g., as may appear in employment or
policy manuals). This Agreement supersedes in its entirety any prior
negotiations, discussions or agreements, either written or oral, between the
parties with regard or relating to the employment of Executive by the Company.

         17. Survival. The provisions of this Agreement relating to
post-termination compensation (including, without limitation, the Severance
Payment and related rights), confidentiality and noncompetition shall survive
the expiration or termination of this Agreement.

         18. Severability. Without in any way limiting the provisions of Section
7.2, in case any one or more of the provisions contained in this Agreement for
any reason shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed and reformed
to the maximum extent permitted by law.

         19. Binding Effect; Successors. This Agreement shall inure to the
benefit of Executive and his heirs, successors, personal representatives and
assigns. Executive acknowledges that the services to be rendered by him
thereunder are unique and personal in nature. Accordingly, Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. The Company shall have the right to assign or transfer this Agreement
to any successor of all of its business or assets; provided, however, that the
Company

<PAGE>

shall require any such successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company (other than (i) a successor in connection with a
reincorporation of the Company and (ii) Hellman & Friedman Capital Partners III,
L.P. and its affiliates or an entity in which they are the controlling members)
to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law or otherwise.

         20. Arbitration. In the event of any dispute or claim arising out of or
in connection with this Agreement or the enforcement of rights hereunder, such
dispute or claim shall be submitted to binding arbitration in accordance with
S.C. Code Ann. ss.15-48-10 et. seq., as amended, and the then current rules and
procedures of the American Arbitration Association ("AAA"). The arbitrator shall
be selected by an agreement of the parties to the dispute or claim from the
panel of arbitrators selected by the AAA, or, if the parties cannot agree on an
arbitrator within thirty (30) days after the notice of a party's desire to have
a dispute settled by arbitration, then the arbitrator shall be selected by the
AAA in Charleston, South Carolina. The arbitrator shall apply the laws of the
State of South Carolina, without reference to rules of conflict of law or
statutory rules of arbitration, to the merits of any dispute or claim. The
determination reached in such arbitration shall be final and binding on all
parties hereto without any right of appeal or further dispute. Execution of the
determination by such arbitration may be sought in any court of competent
jurisdiction.

         In the event of any arbitration as provided under this Agreement, or
the enforcement of rights hereunder, the arbitrator shall have the authority to,
but shall not be required to, award the prevailing party its costs and
reasonable attorneys' fees.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Employment and
Noncompetition Agreement effective as of the day and year first set forth above.

                                          COMPANY:
                                          -------

                                          BLACKBAUD, INC.

                                          By:    /s/ Marco W. Hellman
                                                 -------------------------------
                                          Name:  Marco W. Hellman
                                                 -------------------------------
                                          Title: Chairman
                                                 -------------------------------

                                          EXECUTIVE:
                                          ---------

                                          /s/ Robert J. Sywolski
                                          --------------------------------------
                                          Robert J. Sywolski

<PAGE>

                                    EXHIBIT A
                                    ---------

                             STOCK OPTION AGREEMENT

<PAGE>

                                    EXHIBIT B
                                    ---------

                EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT

         THIS EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT IS made and
entered into this 1st day of March, 2000, by and between Blackbaud, Inc., a
South Carolina corporation (the "Company") and Robert J. Sywolski (the
"Employee").

         WHEREAS, the Company desires to employ the Employee subject to the
terms and conditions set forth herein; and

         Employee desires to be employed by the Company and is willing to agree
to the terms and conditions set forth herein; and

         Employee understands that, in its business, the Company has developed
and uses commercially valuable technical and nontechnical information and that,
to guard the legitimate interests of the Company, it is necessary for the
Company to keep such information confidential and to protect such information as
trade secrets or by patent or copyright; and

         Employee recognizes that the computer programs, system documentation,
manuals and other materials developed by the Company are the proprietary
information of the Company, that the Company regards this information as
valuable trade secrets and that its use and disclosure must be carefully
controlled; and

         Employee further recognizes that, although some of the Company's
customers and suppliers are well known, other customers, suppliers and
prospective customers and suppliers are not so known, and the Company views the
names and identities of these customers, suppliers and prospective customers and
suppliers, as well as the content of any sales proposals, as being the Company's
trade secrets; and

         Employee further recognizes that any ideas, software or company
processes that presently are not being sold, and that therefore are not public
knowledge, are considered trade secrets of the Company; and

         Employee understands that special hardware and/or software developed by
the Company is subject to the Company's proprietary rights and that the Company
may treat those developments, whether hardware or software, as either trade
secrets, copyrighted material or patentable material, as applicable; and

         Employee understands that all such information is vital to the success
of the Company's business and that Employee, through Employee's employment, has
or may become acquainted with such information and may contribute to that
information through inventions, discoveries, improvements, software development,
or in some other manner;

         NOW, THEREFORE, in consideration of the foregoing premises and
Employee's continuation of employment, the parties agree as follows:

<PAGE>

         1. Employee will not at any time, whether during or after the
termination of his employment, reveal to any person or entity any of the trade
secrets or confidential information concerning the organization, business or
finances of the Company or of any third party that the Company is under an
obligation to keep confidential (including, but not limited to, trade secrets or
confidential information respecting inventions, research, products, designs,
methods, know-how, formulae, techniques, systems, processes, software programs,
works of authorship, customer lists, projects, plans and proposals), except (i)
as may be required in the ordinary course of performing his duties as an
employee of the Company or (ii) when required to do so by a court of law, by any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order him to divulge, disclose or make
accessible such information, and Employee shall keep secret all matters
entrusted to him and shall not use or attempt to use any such information in any
manner that may injure or cause loss to the Company.

         2. If at any time or times during Employee's employment, Employee shall
(either alone or with others) make, conceive, discover or reduce to practice any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data, technique,
know-how, secret or intellectual property right whatsoever or any interest
therein (whether or not patentable or registrable under copyright or similar
statutes or subject to analogous protection) that relates to the business of the
Company or any of the products or services being developed, manufactured or sold
by the Company or that may be used in relation therewith (herein called
"Developments"), such Developments and the benefits thereof shall immediately
become the sole and absolute property of the Company and its assigns, and
Employee shall promptly disclose to the Company each such Development and hereby
assigns any rights Employee may have or acquire in the Developments and benefits
and/or rights resulting therefrom to the Company and its assigns without further
compensation and shall communicate, without cost or delay, and without
publishing the same, all available information relating thereto to the Company.
Upon the request of the Company and without further remuneration by the Company,
but at the expense of the Company, the Employee will execute and deliver all
documents and do other acts which are or may be necessary to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain, extend and enforce any and all patents, trademark
registrations or copyrights under United States or foreign law with respect to
any such developments.

         3. During the Employee's employment, and for a period of one (1) year
thereafter, the Employee will not solicit business from any person or entity to
whom the Company or any of its affiliates has sold its products or services; nor
shall the Employee (except as permitted in Section 7.1(d) of the Employee's
employment agreement with the Company) contact, communicate with, solicit or
attempt to recruit or hire, any employee of the Company or any of its affiliates
with the intent or effect of inducing or encouraging said employee to leave the
employ of the Company or any of its affiliates or to breach other obligations to
the Company.

         4. Employee understands that this Agreement does not create an
obligation on the Company or any other person or entity to continue Employee's
employment.

         5. Employee represents that the Developments, if any, identified on
Exhibit A attached hereto comprise all the unpatented and uncopyrighted
Developments that Employee has made or conceived prior to or otherwise not in
connection with Employee's employment by the

                                       2

<PAGE>

Company, which Developments are excluded from this Agreement. Employee
understands that it is necessary only to list the title and purpose of such
Developments but not the details thereof.

                  Employee further represents that Employee's performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information acquired
by Employee in confidence or in trust prior to Employee's employment by the
Company. Employee has not entered into, and Employee agrees he will not enter
into, any agreement either written or oral in conflict herewith.

         6. Any waiver by the Company of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision or any other provision hereof.

         7. Employee hereby agrees that each provision herein shall be treated
as a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, activity or subject so
as to be unenforceable at law, such provision or provisions shall be construed
by the appropriate judicial body by limiting and reducing it or them, so as to
be enforceable to the maximum extent compatible with the applicable law as it
shall then exist.

         8. Employee's obligations under this Agreement shall survive the
termination of Employee's employment regardless of the manner of such
termination and shall be binding upon Employee's heirs, executors,
administrators and legal representatives.

         9. The term "Company" shall include Blackbaud, Inc. and any of its
subsidiaries, subdivisions or affiliates. The Company shall have the right to
assign this Agreement to its successors and assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by said
successors or assigns. This Agreement may be amended only in a writing signed by
each of the parties hereto.

         10. This Agreement shall be governed by and construed in accordance
with the laws of the State of South Carolina. This Agreement may be executed in
counterparts, but all such counterparts shall together constitute one and the
same instrument.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       3

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Employee
Nondisclosure and Developments Agreement as a sealed instrument as of the date
first above written.

                                         EMPLOYEE:
                                         --------

                                                                          (SEAL)
                                         ---------------------------------
                                         Robert J. Sywolski

                                         COMPANY:
                                         -------

                                         BLACKBAUD, INC.

                                         By:
                                                --------------------------------
                                         Name:
                                                --------------------------------
                                         Title:
                                                --------------------------------

                                       4

<PAGE>

                                    EXHIBIT A
                                    ---------

                         PRIOR DEVELOPMENTS BY EMPLOYEE

None

<PAGE>

                EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT

         THIS EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT IS made and
entered into this 1st day of March, 2000, by and between Blackbaud, Inc., a
South Carolina corporation (the "Company") and Robert J. Sywolski (the
"Employee").

         WHEREAS, the Company desires to employ the Employee subject to the
terms and conditions set forth herein; and

         Employee desires to be employed by the Company and is willing to agree
to the terms and conditions set forth herein; and

         Employee understands that, in its business, the Company has developed
and uses commercially valuable technical and nontechnical information and that,
to guard the legitimate interests of the Company, it is necessary for the
Company to keep such information confidential and to protect such information as
trade secrets or by patent or copyright; and

         Employee recognizes that the computer programs, system documentation,
manuals and other materials developed by the Company are the proprietary
information of the Company, that the Company regards this information as
valuable trade secrets and that its use and disclosure must be carefully
controlled; and

         Employee further recognizes that, although some of the Company's
customers and suppliers are well known, other customers, suppliers and
prospective customers and suppliers are not so known, and the Company views the
names and identities of these customers, suppliers and prospective customers and
suppliers, as well as the content of any sales proposals, as being the Company's
trade secrets; and

         Employee further recognizes that any ideas, software or company
processes that presently are not being sold, and that therefore are not public
knowledge, are considered trade secrets of the Company; and

         Employee understands that special hardware and/or software developed by
the Company is subject to the Company's proprietary rights and that the Company
may treat those developments, whether hardware or software, as either trade
secrets, copyrighted material or patentable material, as applicable; and

         Employee understands that all such information is vital to the success
of the Company's business and that Employee, through Employee's employment, has
or may become acquainted with such information and may contribute to that
information through inventions, discoveries, improvements, software development,
or in some other manner;

         NOW, THEREFORE, in consideration of the foregoing premises and
Employee's continuation of employment, the parties agree as follows:

         1. Employee will not at any time, whether during or after the
termination of his employment, reveal to any person or entity any of the trade
secrets or confidential information concerning the organization, business or
finances of the Company or of any third party that the

<PAGE>

Company is under an obligation to keep confidential (including, but not limited
to, trade secrets or confidential information respecting inventions, research,
products, designs, methods, know-how, formulae, techniques, systems, processes,
software programs, works of authorship, customer lists, projects, plans and
proposals), except (i) as may be required in the ordinary course of performing
his duties as an employee of the Company or (ii) when required to do so by a
court of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with apparent jurisdiction to order him to divulge,
disclose or make accessible such information, and Employee shall keep secret all
matters entrusted to him and shall not use or attempt to use any such
information in any manner that may injure or cause loss to the Company.

         2. If at any time or times during Employee's employment, Employee shall
(either alone or with others) make, conceive, discover or reduce to practice any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data, technique,
know-how, secret or intellectual property right whatsoever or any interest
therein (whether or not patentable or registrable under copyright or similar
statutes or subject to analogous protection) that relates to the business of the
Company or any of the products or services being developed, manufactured or sold
by the Company or that may be used in relation therewith (herein called
"Developments"), such Developments and the benefits thereof shall immediately
become the sole and absolute property of the Company and its assigns, and
Employee shall promptly disclose to the Company each such Development and hereby
assigns any rights Employee may have or acquire in the Developments and benefits
and/or rights resulting therefrom to the Company and its assigns without further
compensation and shall communicate, without cost or delay, and without
publishing the same, all available information relating thereto to the Company.
Upon the request of the Company and without further remuneration by the Company,
but at the expense of the Company, the Employee will execute and deliver all
documents and do other acts which are or may be necessary to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain, extend and enforce any and all patents, trademark
registrations or copyrights under United States or foreign law with respect to
any such developments.

         3. During the Employee's employment, and for a period of one (1) year
thereafter, the Employee will not solicit business from any person or entity to
whom the Company or any of its affiliates has sold its products or services; nor
shall the Employee (except as permitted in Section 7.1(d) of the Employee's
employment agreement with the Company) contact, communicate with, solicit or
attempt to recruit or hire, any employee of the Company or any of its affiliates
with the intent or effect of inducing or encouraging said employee to leave the
employ of the Company or any of its affiliates or to breach other obligations to
the Company.

         4. Employee understands that this Agreement does not create an
obligation on the Company or any other person or entity to continue Employee's
employment.

         5. Employee represents that the Developments, if any, identified on
Exhibit A attached hereto comprise all the unpatented and uncopyrighted
Developments that Employee has made or conceived prior to or otherwise not in
connection with Employee's employment by the Company, which Developments are
excluded from this Agreement. Employee understands that it is necessary only to
list the title and purpose of such Developments but not the details thereof.

                                       2

<PAGE>

                  Employee further represents that Employee's performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information acquired
by Employee in confidence or in trust prior to Employee's employment by the
Company. Employee has not entered into, and Employee agrees he will not enter
into, any agreement either written or oral in conflict herewith.

         6. Any waiver by the Company of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision or any other provision hereof.

         7. Employee hereby agrees that each provision herein shall be treated
as a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, activity or subject so
as to be unenforceable at law, such provision or provisions shall be construed
by the appropriate judicial body by limiting and reducing it or them, so as to
be enforceable to the maximum extent compatible with the applicable law as it
shall then exist.

         8. Employee's obligations under this Agreement shall survive the
termination of Employee's employment regardless of the manner of such
termination and shall be binding upon Employee's heirs, executors,
administrators and legal representatives.

         9. The term "Company" shall include Blackbaud, Inc. and any of its
subsidiaries, subdivisions or affiliates. The Company shall have the right to
assign this Agreement to its successors and assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by said
successors or assigns. This Agreement may be amended only in a writing signed by
each of the parties hereto.

         10. This Agreement shall be governed by and construed in accordance
with the laws of the State of South Carolina. This Agreement may be executed in
counterparts, but all such counterparts shall together constitute one and the
same instrument.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       3

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Employee
Nondisclosure and Developments Agreement as a sealed instrument as of the date
first above written.

                                            EMPLOYEE:
                                            --------

                                            /s/ ROBERT J. SYWOLSKI        (SEAL)
                                            ------------------------------
                                            Robert J. Sywolski

                                            COMPANY:
                                            --------

                                            BLACKBAUD, INC.

                                            By:    /s/ MARCO W. HELLMAN
                                                   -----------------------------
                                            Name:  Marco W. Hellman
                                                   -----------------------------
                                            Title: Chairman
                                                   -----------------------------

                                       4

<PAGE>

                                 SCHEDULE 3.2(a)
                                 ---------------

         The following summarizes Executive's annual bonus plan for 2004. The
key elements of the plan are as follows:

1.       Consistent with Executive's existing employment contract, Executive
         will have a guaranteed minimum bonus of $100,000.

2.       For payments above the guaranteed minimum, Executive's plan will
         resemble the Blackbaud Corporate Incentive Plan but will also include a
         subjective portion administered at the board's discretion. Executive's
         bonus will be based 80% on attainment of key financial goals (the
         "Quantitative Award") and 20% on the board's subjective evaluation of
         Executive's performance (the "Subjective Award"). Executive's target
         bonus will be $425,000 based on achievement of the financial plan and
         full utilization of the Subjective Award. Amounts could be greater or
         less than this amount based on actual results and the board's review of
         Executive's performance.

3.       The Quantitative Award will function as follows:

         o        Performance against Board-approved budget, both Revenue and
                  "Adjusted" EBITDA (EBITDA before bonus expense), will
                  determine the size of Executive's award.

         o        In calculating performance achievement, Revenue will receive a
                  70% weighting and "Adjusted" EBITDA a 30% weighting.

         o        Actual Revenue and Actual "Adjusted" EBITDA must both achieve
                  at least 90% of budget in order for Executive to qualify for a
                  bonus exceeding the guaranteed minimum. Less than 90%
                  performance against either budget will result in a payment of
                  the guaranteed minimum amount.

         o        Executive's Quantitative Award will be determined based upon a
                  factor calculated as follows:

                  Factor = .7 x Actual Revenue + .3 x Actual "Adjusted" EBITDA
                                --------------        ------------------------
                                Budgeted Revenue      Budgeted "Adjusted" EBITDA

                  When the factor equals 1.00, Executive's Quantitative Award
                  will be 100% of the target. For each .01 that the factor is
                  greater or less than 1.00, Executive's award changes by 5% of
                  "target" down to a minimum of 50% and a maximum of 200%.

<PAGE>

         o        Executive's target Quantitative Award will be $340,000. The
                  maximum award at a factor of 1.20 will be $680,000 and the
                  minimum award at a factor of .90 will be $170,000.

4.       The Subjective Award, targeted at $85,000, will as always require
         Executive's usual (exceptional!) performance.

5.       Bonus payment will occur within 30 days following finalization of
         year-end results.

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