THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE

    SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE

    STATE
SECURITIES LAW, INCLUDING THE

    STATE
OF NEW YORK,

    AND
MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED

    OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE

    WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS

    AND
THE OTHER RESTRICTIONS ON TRANSFER SET FORTH HEREIN.

     

    
      
        

      

    

    


    SUBORDINATED
PROMISSORY NOTE

    


    
      	
              $500,000

            	
              New
      York, New York

            
	 
      	
              May
      25, 2010

            


    

    


    FOR VALUE RECEIVED, Zanett, Inc., a
Delaware corporation (the “Company”), hereby unconditionally promises to pay to
the order of Rockport Investments Ltd. or its permitted assigns, (the “Holder”),
on or before July 27, 2010, the principal amount of Five Hundred Thousand
Dollars ($500,000), together with interest as set forth below, until the date on
which the principal amount is paid in full, in accordance with the terms of this
promissory note (the “Note”).

    


     The principal balance of this
Note and all accrued but unpaid interest theron shall be due and payable on July
27, 2010 (the “Maturity Date”).

    


    During the period beginning on the date
hereof and ending on the Maturity Date, interest shall accrue daily on the
outstanding principal amount hereunder at the simple rate of 1.5% per
month.  Interest shall be calculated on the basis of actual days
elapsed based on a 30-day month, and shall be paid monthly in arrears on the
fifth business day of each month, beginning on June 7, 2010.  Interest
shall continue to accrue on the principal balance hereof at the then-applicable
simple rate of interest specified in this Note, notwithstanding any demand for
payment or the entry of any judgment against the Company, until all principal
owing hereunder is paid in full.

    


    The Company will pay or cause to be
paid all sums becoming due hereon for principal and interest in lawful money of
the United States of America by wire transfer sent to an account for which the
Holder provides information to the Company or check sent to the Holder’s address
on file with the Company or to such other address as Holder may designate for
such purpose from time to time by written notice to the Company, without any
requirement for the presentation of this Note or making any notation thereon
except that the Holder hereof agrees that payment of the final amount due shall
be made only upon surrender of this Note to the Company for
cancellation.

    


    The Company may prepay this Note in
whole or in part at any time without premium or penalty.  Any partial
prepayment shall be applied to the unpaid installments of principal in the
inverse order of their maturity.

    


    The Note will be an unsecured
obligation of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The occurrence of any of the following
shall constitute an Event of Default hereunder: (a) default in any payment
by the Company hereunder when due; (b) sale of all or substantially all of
the Company’s assets, or any formal action in contemplation of the dissolution,
liquidation or termination of the Company’s existence; (c) entry of a
judgment in an amount in excess of $100,000 against the Company or attachment or
seizure of or levy upon any material property of the Company; (d) acceleration
of the maturity of any of the Company’s liabilities for borrowed money; or
(e) institution of any proceedings by or against the Company under any law
relating to bankruptcy, insolvency, reorganization or other form of debtor
relief or the Company’s making an assignment for the benefit of creditors, or
the appointment of a receiver, trustee, conservator or other judicial
representative for the Company or the Company’s property.

    


    Upon the occurrence of an Event of
Default hereunder, the entire principal amount of this Note and any accrued but
unpaid interest thereon shall be immediately due and
payable.  Further, if an Event of Default shall occur hereunder due to
the Company’s default in payment of any amounts due hereunder on the Maturity
Date, then for each calendar day that elapses after the Maturity Date until such
time as all amounts due and payable by the Company hereunder are paid in full,
the Company shall issue to the Holder 10,000 shares (as adjusted for stock
splits, dividends or similar events) of the Company’s common stock, par value
$0.001 per share (the “Common Stock”); provided that if the Company is
prohibited by Rule 5635(d) of the NASDAQ Listing Rules, or any successor or
similar rule, or the rules or regulation of any other securities exchange on
which the Common Stock is then listed or traded, from issuing a number of shares
of Company Stock pursuant to this paragraph in excess of a prescribed amount,
without stockholder approval or otherwise (the “Cap Amount”), then the Company
shall not issue shares pursuant to this paragraph in excess of the Cap
Amount.  Assuming solely for the purposes of this paragraph that such
Rule 5635(d) or a similar rule is applicable, the Cap Amount shall be the number
of shares equal to 19.99% of the number of shares of Common Stock outstanding
immediately prior to the issuance of this Note.

    


    No failure or delay on the part of the
Holder to insist on strict performance of the Company’s obligations hereunder or
to exercise any remedy shall constitute a waiver of the Holder’s rights in that
or any other instance.  No waiver of any of the Holder’s rights shall
be effective unless in writing, and any waiver of any default or any instance of
non-compliance shall be limited to its express terms and shall not extend to any
other default or instance of non-compliance.

    


    This Note shall be construed in
accordance with and governed by the laws of the State of New York, without
giving effect to conflict of laws principles.  The Company hereby
submits to the personal jurisdiction in the State of New York, consents to the
jurisdiction of any competent state or federal district court sitting in New
York City, New York, and waives any and all rights to raise lack of personal
jurisdiction as a defense in any action, suit or proceeding in connection with
this Note or any related matter.  Because of the greater time and
expense required therefor, the Company hereby waives, to the extent permitted by
law, a trial by jury.

    


    The Company shall pay all reasonable
costs and expenses (including attorneys’ fees) incurred by the Holder relating
to the enforcement of this Note.

    


    Any provision hereof found to be
illegal, invalid or unenforceable for any reason whatsoever shall not affect the
validity, legality or enforceability of the remainder hereof.

    


    If the effective interest rate on this
Note would otherwise violate any applicable usury law, then the interest rate
shall be reduced to the maximum permissible rate and any payment received by the
Holder in excess of the maximum permissible rate shall be treated as a
prepayment of the principal of this Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This Note shall be binding upon the
Company’s successors and assigns and shall inure to the benefit of each holder
of this Note and such holder’s successors, endorsees and assigns.

    


    No recourse whatsoever, either directly
or through the Company or any trustee, receiver or assignee, shall be had in any
event or in any manner against any past, present or future stockholder, director
or officer of the Company for the payment of, principal of or interest on this
Note or any of them or for any claim based thereon or otherwise in respect this
Note, this Note being a corporate obligation only.

     

    The Company shall consider and treat
the person in whose name this Note shall be registered as the absolute owner
thereof for all purposes whatsoever, and the Company shall not be affected by
any notice to the contrary.  This Note shall be transferable by the
Holder in whole but not in part upon the written consent of the
Company.

     

    All communications provided hereunder
shall be in writing and, if to the Company, delivered or mailed by registered or
certified mail addressed to Zanett, Inc., 635 Madison Avenue, 15th Floor,
New York, NY  10022, Attention:  Chief
Executive Officer, or, if to the Holder to the address on file with the
Company.

    


    [Signature
Page Follows]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    IN WITNESS WHEREOF, the undersigned has
caused this Note to be executed on behalf of the Company as of the day and year
first written above.

    


    
      
        	 
      	
                ZANETT,
      INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Dennis Harkins

              
	 
      	 
      	
                Name:
      Dennis Harkins

              
	 
      	 
      	
                Title:
      Chief Financial Officer

              


      

    

    


    By signing below, intending to be
legally bound, the Holder agrees that, except as and to the extent hereinafter
provided, the obligations of the Company to the Holder under this Note (the
“Subordinated Obligations”) are and shall be subordinate and subject in right of
payment to the prior indefeasible payment in full in cash of all of the
Company’s obligations to Bank of America, N.A. (or, in the event the Company’s
obligations to Bank of America, N.A. are refinanced with another senior lender,
to the Company’s obligations to such senior lender) pursuant to that certain
Loan and Security Agreement (the “Loan Agreement”), dated as of December 21,
2005, by and between the Company and the other parties named therein, as amended
(such obligations, the “Senior Obligations”), whether or not the Senior
Obligations have been voided, disallowed or subordinated pursuant to Section 548
of the United States Bankruptcy Code (11 USC §101, et seq.) or any applicable
state fraudulent conveyance laws, whether asserted directly or under Section 544
of the United States Bankruptcy Code.  Without limiting the foregoing,
the Holder also hereby agrees that (a) except as otherwise set forth below, it
will not ask, demand, sue for, take or receive from the Company (other than
directing the Company to make payment directly to the holder of the Senior
Obligations for the purpose of causing the Senior Obligations to be paid), by
set-off or in any other manner, payment of the whole or any part of the
Subordinated Obligations, or any security therefor, and (b) without limiting the
generality of clause (a) of this paragraph, it will not take any action to
collect, demand payment of or accelerate all or any portion of the Subordinated
Obligations other than the filing of appropriate proofs of claim or any other
similar action necessary to preserve its claim against the Holder (provided that
the Holder may accelerate the Subordinated Obligations if all outstanding Senior
Obligations shall have been previously accelerated), take, foreclose or
otherwise realize upon any security therefor or exercise any of its other rights
or remedies against the Holder that it may have in respect of the Subordinated
Obligations, in each case unless and until all of the Senior Obligations shall
have been indefeasibly paid in full in cash, whether or not such Senior
Obligations have been voided, disallowed or subordinated pursuant to Section 548
of the United States Bankruptcy Code or any applicable state fraudulent
conveyance laws, whether asserted directly or under Section 544 of the United
States Bankruptcy Code.  Notwithstanding the foregoing, so long as no
Event of Default (as defined in the Loan Agreement) has occurred and is
continuing, or would be caused thereby, the Holder may from time to time receive
from the Company and the Company may pay to the Holder the payments of principal
and interest called for by the terms of this Note (the “Permitted
Payments”).  Nothing in this Agreement shall limit the right of the
Holder to receive any payments (whether Permitted Payments or otherwise) on or
in respect of the Subordinated Obligations at any time after the Senior
Obligations shall have been indefeasibly paid in full in cash.

    


    
      
        	 
      	
                ROCKPORT
      INVESTMENTS LTD.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ J. Pickles

              
	 
      	 
      	
                Name:
      J. Pickles

              
	 
      	 
      	
                Title:
      Portfolio Manager

              


      

    

    


    [Signature
Page to Promissory Note]