Exhibit
10.3

    


    TRANSACTION
APPROVAL AGREEMENT

    


    THIS TRANSACTION APPROVAL AGREEMENT
(this "Agreement"), dated as of March
31, 2010, is entered into by and among ZANETT,
INC.,  Delaware corporation (the "Company") and the Stockholders
listed on the signature page to this Agreement (each, a "Stockholder" and collectively,
the "Stockholders").

    


    WHEREAS, on February 28, 2010,
Rockport Investments Ltd. (the "Investor") and Bruno Guazzoni
entered into an arrangement whereby (i) the Investor agreed to purchase from
Bruno Guazzoni, and Bruno Guazzoni agreed to sell to the Investor, those two
certain promissory notes owing by the Company held by Bruno Guazzoni in an
aggregate principal amount equal to $5,325,000 (the "Promissory Notes"), and (ii)
the Investor agreed to assume from Bruno Guazzoni, and Bruno Guazzoni agreed to
assign to the Investor, all of Bruno Guazzoni's obligations and rights under
that certain line of credit to extend credit to the Company up to $3,000,000
(the "Line of Credit"),
in each case extinguishing in full all obligations owing by the Company to Bruno
Guazzoni thereunder in favor of repayment obligations owing to the
Investor.

    


    WHEREAS, the Company wishes to
refinance its obligations now owing to the Investor in respect of the Promissory
Notes and the Line of Credit in a transaction with the Investor in which the
Company will issue convertible debt of the Company to the Investor (the "Company Convertible Debt") in
exchange for the Promissory Notes and the Line of Credit, on the terms and
conditions set forth in that certain Term Debt – Convertible Debt Exchange
Agreement between the Investor and the Company dated as of March 15, 2010 (the
"Exchange
Agreement");

    


    WHEREAS, the consummation of
the transactions contemplated by the Exchange Agreement and the issuance of the
Company Convertible Debt (collectively, the "Transactions") are contingent
on the approval by the common stockholders of the Company at the 2010 Annual
Meeting of Stockholders;

    


    WHEREAS, the Stockholders are
record holders of common stock of the Company, par value $0.001 ("Common Stock");
and

    


    WHEREAS, each of the
Stockholders wishes, on the terms and subject to the conditions set forth
herein, to agree to vote the Common Stock held by it in favor of the
Transactions and as otherwise may be necessary to facilitate the consummation of
the Transactions, including, without limitation, approving (i) an amendment to
the Company’s Certificate of Incorporation to increase the number of authorized
shares of Common Stock to at least 149,669,463, and (ii) the issuance of shares
of Common Stock upon conversion of the Company Convertible Debt (including, in
each case, any shares issuable as a result of antidilution adjustments pursuant
to the terms of the Company Convertible Debt) or as otherwise contemplated by
the terms of the Company Convertible Debt.

    C.G.
______

    D.H.
______


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    NOW, THEREFORE, for good and
valuable consideration, the receipt, sufficiency and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

    


    1.           Representations of the
Stockholders.  Each Stockholder represents and warrants to the
Company, as to himself, that (i) he lawfully owns beneficially (as such term is
defined in the Securities Exchange Act of 1934, as amended) and of record the
number of shares of Common Stock set forth opposite his name on Exhibit A free
and clear of all liens, claims, charges, security interests or other
encumbrances and, except for this Agreement, there are no voting trusts or
voting agreements with respect to such shares, (ii) he does not beneficially own
any Common Stock or other voting securities of the Company other than the shares
set forth on Exhibit A, (iii)
he has full power and authority to vote all of the shares of Common Stock set
forth on Exhibit A and to enter into, execute and deliver this Agreement and to
perform fully his obligations hereunder, and (iv) this Agreement has been duly
executed and delivered by him, constitutes his legal, valid and binding
obligation, and is enforceable against him in accordance with its
terms.

     

    2.           Agreement to Vote
Shares.  Each Stockholder agrees, as to himself, that he will
vote the shares of Common Stock held of record or beneficially by him (including
the shares set forth opposite his name on Exhibit A and any New Company
Securities (as defined in Section 4 hereof)), or will, if applicable, cause any
holder of record of the shares of Common Stock owned beneficially by him
(including, any New Company Securities), to vote the shares of Common Stock and
New Company Securities at every meeting of the stockholders of the Company at
which such matters are considered and at every adjournment thereof and in
connection with any written consent of the stockholders of the Company
(including, without limitation, the 2010 Annual Meeting of Stockholders of the
Company):  (a) in favor of consummation of the Transactions and all
actions necessary to facilitate the consummation of the Transactions, (b) in
favor of an amendment to the Company’s Certificate of Incorporation to increase
the number of authorized shares of Common Stock to at least 149,669,463, (c) in
favor of approving the issuance of shares of Common Stock upon conversion of the
Company Convertible Debt (including, in each case, any shares issuable as a
result of antidilution adjustments pursuant to the terms of the Company
Convertible Debt) or as otherwise contemplated by the terms of the Notes and
Warrants, (d) against any action or agreement that would result, or would be
reasonably likely to result, in a breach in any material respect of any
covenant, representation or warranty or any other obligation of the Company
under the Exchange Agreement or the Convertible Note and (e) against any action
or agreement contrary to those set forth in this Section 2.  Each
Stockholder will retain the right to vote his Common Stock, in his sole
discretion, on all matters other than those described in this Section 2 or shall
grant a proxy in a form approved by the Company to vote the matters described in
this Section 2, and each Stockholder may grant proxies and enter into voting
agreements or voting trusts for the Common Stock in respect of such other
matters.

     

    C.G.
______

    D.H.
______



    
      
         


      

      
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    3.           Transfer and
Encumbrance.  From the date hereof until after the completion
of the 2010 Annual Meeting of Stockholders of the Company (or any adjournments
thereof) at which the matters set forth in Section 2 above are considered, or
such later date upon which the Transactions are approved by the stockholders of
the Company, each Stockholder agrees not to transfer, sell, offer, exchange,
pledge or otherwise dispose of or encumber any of the Common Stock or any New
Company Securities held by him, unless the transferee agrees in written form
satisfactory to the Company to be bound by the terms of this Agreement as if
such transferee were a signatory to this Agreement, or to grant any other voting
rights with respect thereto or enter into any other agreement or arrangement
regarding the voting thereof.

     

    4.           Additional
Purchases.  Each Stockholder agrees that any Common Stock or
other voting securities of the Company purchased or otherwise acquired by him
after the date of execution of this Agreement ("New Company Securities") shall
be subject to the terms of this Agreement to the same extent as if they had been
owned by him on the date hereof.

     

    5.           Specific
Performance.  Each party hereto acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other party will not have an adequate remedy at law for
damages.  Accordingly, each party hereto agrees that injunctive relief
or other equitable remedy, in addition to remedies at law for damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
relief on the basis that the other party has an adequate remedy at
law.  Each party hereto agrees that it will not seek, and agrees to
waive any requirement for, the securing or posting of a bond in connection with
any other party’s seeking or obtaining such equitable relief.

     

    6.           Capacity of
Stockholders.  Each Stockholder has executed this Agreement
solely in such Stockholder’s capacity as a securityholder of the Company and not
in such Stockholder’s capacity as an officer, director or employee of the
Company or any of its affiliates.  Without limiting the foregoing,
nothing in this Agreement shall limit or affect any actions taken by such
Stockholder in such Stockholder’s capacity as an officer, director or employee
of the Company or any of its affiliates.

     

    7.           Entire
Agreement.  As among the Stockholders and the Company, this
Agreement supersedes all prior agreements, written or oral, among the parties
hereto with respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter
hereof.  This Agreement may not be amended, supplemented or modified,
and no provisions hereof may be modified or waived, except by an instrument in
writing signed by all the parties hereto.  No waiver of any provisions
hereof by any party shall be deemed a waiver of any other provisions hereof by
such party, nor shall any such waiver be deemed a continuing waiver of any
provision hereof by such party.

     

    8.           Notice.  Any
notice, request, instruction or other document to be given hereunder by any
party to the others shall be deemed given if in writing and delivered personally
or sent by registered or certified mail (return receipt requested) or overnight
courier (providing proof of delivery), postage prepaid, or by facsimile (which
is confirmed):

     

    C.G.
______

    D.H.
______


    
      
         


      

      
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                          If
to the Company:

    


    Zanett,
Inc.

    635
Madison Ave., 15th
Floor

    New York,
NY  10022

    Attention:  Dennis
Harkins

    


    With a
concurrent copy to:

    


    Drinker
Biddle & Reath LLP

    One Logan
Square

    Suite
2000

    Philadelphia,
PA  19103

    Attention:  Stephen
T. Burdumy, Esq.

    


    If to a Stockholder, to the address set
forth on Exhibit
A hereto.

    


    or to
such other persons or addresses as may be designated in writing by the party to
receive such notice as provided above.

    


    9.            Miscellaneous.

     

    (a)           This
Agreement shall be deemed a contract made under, and for all purposes shall be
construed in accordance with, the laws of the State of Delaware.

     

    (b)           If
any provision of this Agreement or the application of such provision to any
person or circumstances shall be held invalid or unenforceable by a court of
competent jurisdiction, such provision or application shall be unenforceable
only to the extent of such invalidity or unenforceability and the remainder of
the provision held invalid or unenforceable and the application of such
provision to persons or circumstances, other than the party as to which it is
held invalid, and the remainder of this Agreement, shall not be
affected.

     

    (c)           This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.

     

    (d)           Each
party hereto shall execute and deliver such additional documents as may be
necessary or desirable to effect the transactions contemplated by this
Agreement.

     

    (e)           All
Section headings herein are for convenience of reference only and are not part
of this Agreement, and no construction or reference shall be derived
therefrom.

     

    (f)           The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties
hereto.

     

    C.G.
______

    D.H.
______


    
      
         


      

      
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    (g)           The
obligations of the Stockholders set forth in this Agreement shall not be
effective or binding upon such party until after such time as the Exchange
Agreement is executed and delivered by the parties thereto.

    


    [Remainder of Page Intentionally Left
Blank]

    


    C.G.
______

    D.H.
______


    
      
         


      

      
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    IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Agreement as of the date first
written above.

    


    
      
        	 
      	
                ZANETT,
      INC.

              
	 
      	 
      
	 
      	
                By:

              	
                   

              
	 
      	
                Name:

              	
                   

              
	 
      	
                Title:

              	
                   

              
	 
      	 
      	 
      
	 
      	
                STOCKHOLDERS:

              
	 
      	 
      
	 
      	
                   

              
	 
      	
                Claudio
      M. Guazzoni

              
	 
      	 
      
	 
      	
                   

              
	 
      	
                Bruno
      Guazzoni

              
	 
      	 
      
	 
      	
                   

              
	 
      	
                Charles
      Deskins

              
	 
      	 
      
	 
      	
                   

              
	 
      	
                Dennis
      Harkins

              


      

    

    


    C.G.
______

    D.H.
______


    
      
         


      

      
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    Exhibit
10.3


    EXHIBIT
A

    


    
      
        
          	
                  Name and Address

                	 
      	 
      
	
                  of Stockholder

                	 
      	
                  Number of Shares

                
	 
      	 
      	 
      
	
                  Claudio
      M. Guazzoni

                	 
      	
                  2,109,204

                
	
                  Zanett,
      Inc.

                	 
      	 
      
	
                  635
      Madison Ave. 15th
      Floor

                	 
      	 
      
	
                  New
      York, NY  10022

                	 
      	 
      
	 
      	 
      	 
      
	
                  Bruno
      Guazzoni

                	 
      	
                  2,430,711

                
	
                  Zanett,
      Inc.

                	 
      	 
      
	
                  635
      Madison Ave. 15th
      Floor

                	 
      	 
      
	
                  New
      York, NY  10022

                	 
      	 
      
	 
      	 
      	 
      
	
                  Charles
      Deskins

                	 
      	
                  70,000

                
	
                  Zanett,
      Inc.

                	 
      	 
      
	
                  635
      Madison Ave. 15th
      Floor

                	 
      	 
      
	
                  New
      York, NY  10022

                	 
      	 
      
	 
      	 
      	 
      
	
                  Dennis
      Harkins

                	 
      	
                  100,000

                
	
                  Zanett,
      Inc.

                	 
      	 
      
	
                  635
      Madison Ave. 15th
      Floor

                	 
      	 
      
	
                  New
      York, NY  10022

                	 
      	 
      


        

      

    

    


    C.G.
______

    D.H.
______


    
      
         


      

      
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