UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ---------------------

                                   FORM 8-K

                                 CURRENT REPORT
    Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of report (Date of earliest event reported) May 18, 2007
                                                --------------

                                   Zanett, Inc.
-----------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)


Delaware                             001-32589                56-438954
-----------------------------------------------------------------------------
(State or other jurisdiction        (Commission             (IRS Employer
of incorporation)                   File Number)          Identification No.)


635 Madison Avenue, 15th Floor, New York, NY            10022
-----------------------------------------------------------------------------
(Address of Principal Executive Offices)             (Zip Code)


Registrant's telephone number, including area code:  (212) 583-0300
                                                    -----------------

-------------------------------------------------------------------------------
         (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.      Entry into a Material Definitive Agreement.

On May 18, 2007, Zanett, Inc. (the "Company"), together with its wholly-owned
subsidiaries, Zanett Commercial Solutions, Inc. ("ZCS") and Paragon Dynamics,
Inc. ("PDI" and together with the Company and ZCS, the "Borrowers"), entered
into a First Amendment and Modification to Loan and Security Agreement and
Other Loan Documents (the "Amendment") with LaSalle Bank National Association
("LaSalle").  The Amendment amends certain terms of the Loan and Securities
Agreement dated December 21, 2006 between LaSalle and the Borrowers (the
"Loan Agreement") and the Subordination Agreement dated December 21, 2006
between Bruno Guazzoni and LaSalle.

The Amendment limits the maximum revolving credit borrowings under the Loan
Agreement to a principal amount of $8 million.  The Amendment also modifies
the fixed charge coverage ratio test and the senior debt ratio test required
by the Loan Agreement.  As amended, the Loan Agreement requires the Borrowers
to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 for the
three month period ending on December 31, 2006, not less than 0.77 to 1.0 for
the six month period ending on March 31, 2007, not less than 0.76 to 1.0 for
the nine month period ending on June 30, 2007, and not less than 1.1 to 1.0
for the twelve month period ending on September 30, 2007 and each twelve
month period ending on the last day of each fiscal quarter thereafter.  As
amended, the Loan Agreement also requires the Borrowers to maintain a senior
debt ratio of not greater than 3.0 to 1.0 for the three month period ending
on December 31, 2006, not greater than 4.30 to 1.0 for the six month period
ending March 31, 2007, not greater than 4.25 to 1.0 for the nine month period
ending on June 30, 2007, not greater than 2.75 to 1.0 for the twelve month
period ending on September 30, 2007, and not greater than 2.5 to 1.0 for the
twelve month period ending on December 31, 2007 and each twelve month period
ending on the last day of each fiscal quarter thereafter.  As amended, the
Loan Agreement also requires the Borrowers to maintain EBITDA of not less
than $150,000 for the calendar month of May 2007, not less than $160,000 for
the calendar month of June 2007, not less than $175,000 for the calendar
month of July 2007, and not less than $180,000 for the calendar month of
August and for each calendar month thereafter.  The Amendment waives the
EBITDA covenants for calendar months February, March, and April 2007.

The Amendment makes LIBOR rate borrowing unavailable under the Loan Agreement
and changes the interest rate for Prime Rate borrowings under the Loan
Agreement to the Prime Rate plus one percent.  If the Borrowers meet the
financial covenants contained in the original Loan Agreement (including the
fixed charge coverage ratio test, the senior debt ratio test, and the monthly
EBITDA requirements), and no Event of Default (as defined in the Loan
Agreement) has occurred, LaSalle shall notify the Borrowers that future
borrowings will bear interest based on the LIBOR rate in accordance with the
Loan Agreement or at the Prime Rate plus zero percent.

The Amendment also contains certain representations, warranties, and
covenants by the Borrowers and Bruno Guazzoni regarding the outstanding line
of credit and loan extended by Mr. Guazzoni to the Borrowers.

As consideration for LaSalle entering into the Amendment, the Borrowers
agreed to pay LaSalle an Amendment Fee of $10,000.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
10.1        First Amendment and Modification to Loan and Security Agreement
Other Loan Documents dated as of May 18, 2007, among LaSalle Bank National
Association , Zanett, Inc., Zanett Commercial Solutions, Inc., and Paragon
Dynamics, Inc.

                               SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                              ZANETT, INC.



Date:  May 24, 2007          By: /s/ Dennis Harkins
                                 --------------------
                                 Dennis Harkins
                                 Chief Financial Officer

                                 EXHIBIT INDEX

Exhibit No. Description
10.1        First Amendment and Modification to Loan and Security Agreement
            Other Loan Documents dated as of May 18, 2007, among LaSalle Bank
            National Association , Zanett, Inc., Zanett Commercial Solutions,
            Inc., and Paragon Dynamics, Inc.

	- 1 -
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{"company-data": {"conformed-name": "ZANETT INC", "cik": "0001133872", "assigned-sic": "7389", "irs-number": "564389547", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-32589", "film-number": "07876495"}, "business-address": {"street1": "135 E 57TH STREET", "street2": "15TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10022", "phone": "2127595700"}, "mail-address": {"street1": "135 E 57TH ST 15TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10022"}, "former-company": {"former-conformed-name": "PLANET ZANETT INC", "date-changed": "20010206"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ---------------------

                                   FORM 8-K

                                 CURRENT REPORT
    Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) May 18, 2007
                                                --------------

                                   Zanett, Inc.
-----------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)

Delaware                             001-32589                56-438954
-----------------------------------------------------------------------------
(State or other jurisdiction        (Commission             (IRS Employer
of incorporation)                   File Number)          Identification No.)

635 Madison Avenue, 15th Floor, New York, NY            10022
-----------------------------------------------------------------------------
(Address of Principal Executive Offices)             (Zip Code)

Registrant's telephone number, including area code:  (212) 583-0300
                                                    -----------------

-------------------------------------------------------------------------------
         (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.      Entry into a Material Definitive Agreement.

On May 18, 2007, Zanett, Inc. (the "Company"), together with its wholly-owned
subsidiaries, Zanett Commercial Solutions, Inc. ("ZCS") and Paragon Dynamics,
Inc. ("PDI" and together with the Company and ZCS, the "Borrowers"), entered
into a First Amendment and Modification to Loan and Security Agreement and
Other Loan Documents (the "Amendment") with LaSalle Bank National Association
("LaSalle").  The Amendment amends certain terms of the Loan and Securities
Agreement dated December 21, 2006 between LaSalle and the Borrowers (the
"Loan Agreement") and the Subordination Agreement dated December 21, 2006
between Bruno Guazzoni and LaSalle.

The Amendment limits the maximum revolving credit borrowings under the Loan
Agreement to a principal amount of $8 million.  The Amendment also modifies
the fixed charge coverage ratio test and the senior debt ratio test required
by the Loan Agreement.  As amended, the Loan Agreement requires the Borrowers
to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 for the
three month period ending on December 31, 2006, not less than 0.77 to 1.0 for
the six month period ending on March 31, 2007, not less than 0.76 to 1.0 for
the nine month period ending on June 30, 2007, and not less than 1.1 to 1.0
for the twelve month period ending on September 30, 2007 and each twelve
month period ending on the last day of each fiscal quarter thereafter.  As
amended, the Loan Agreement also requires the Borrowers to maintain a senior
debt ratio of not greater than 3.0 to 1.0 for the three month period ending
on December 31, 2006, not greater than 4.30 to 1.0 for the six month period
ending March 31, 2007, not greater than 4.25 to 1.0 for the nine month period
ending on June 30, 2007, not greater than 2.75 to 1.0 for the twelve month
period ending on September 30, 2007, and not greater than 2.5 to 1.0 for the
twelve month period ending on December 31, 2007 and each twelve month period
ending on the last day of each fiscal quarter thereafter.  As amended, the
Loan Agreement also requires the Borrowers to maintain EBITDA of not less
than $150,000 for the calendar month of May 2007, not less than $160,000 for
the calendar month of June 2007, not less than $175,000 for the calendar
month of July 2007, and not less than $180,000 for the calendar month of
August and for each calendar month thereafter.  The Amendment waives the
EBITDA covenants for calendar months February, March, and April 2007.

The Amendment makes LIBOR rate borrowing unavailable under the Loan Agreement
and changes the interest rate for Prime Rate borrowings under the Loan
Agreement to the Prime Rate plus one percent.  If the Borrowers meet the
financial covenants contained in the original Loan Agreement (including the
fixed charge coverage ratio test, the senior debt ratio test, and the monthly
EBITDA requirements), and no Event of Default (as defined in the Loan
Agreement) has occurred, LaSalle shall notify the Borrowers that future
borrowings will bear interest based on the LIBOR rate in accordance with the
Loan Agreement or at the Prime Rate plus zero percent.

The Amendment also contains certain representations, warranties, and
covenants by the Borrowers and Bruno Guazzoni regarding the outstanding line
of credit and loan extended by Mr. Guazzoni to the Borrowers.

As consideration for LaSalle entering into the Amendment, the Borrowers
agreed to pay LaSalle an Amendment Fee of $10,000.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
10.1        First Amendment and Modification to Loan and Security Agreement
Other Loan Documents dated as of May 18, 2007, among LaSalle Bank National
Association , Zanett, Inc., Zanett Commercial Solutions, Inc., and Paragon
Dynamics, Inc.

                               SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                              ZANETT, INC.

Date:  May 24, 2007          By: /s/ Dennis Harkins
                                 --------------------
                                 Dennis Harkins
                                 Chief Financial Officer

                                 EXHIBIT INDEX

Exhibit No. Description
10.1        First Amendment and Modification to Loan and Security Agreement
            Other Loan Documents dated as of May 18, 2007, among LaSalle Bank
            National Association , Zanett, Inc., Zanett Commercial Solutions,
            Inc., and Paragon Dynamics, Inc.

	- 1 -